Title: MAZ Partners LP v. First Choice Healthcare Solutions, Inc., No. 6:19-cv-00619
Court: United States District Court for the Middle District of Florida
Securities: FCHS (OTC)
Class Period: April 1, 2014 to November 14, 2018
Proposed Settlement Class: All Persons or entities who purchased or otherwise acquired First Choice Healthcare Solutions, Inc. common stock during the Class Period and who did not sell all such securities prior to November 14, 2018, including Plaintiff, and excluding: (i) Defendants; the officers, directors, and employees of First Choice during the Class Period (the “Excluded D&Os”); members of Defendants’ and Excluded D&Os immediate families, legal representatives, heirs, agents, affiliates, successors or assigns; and any entity in which Defendants, the Excluded D&Os, or their immediate families have or had a controlling interest; and (ii) Steward Health Care System LLC and its affiliates, successors, and assigns
Wolf Popper LLP is lead counsel to MAZ Partners LP in a federal securities fraud class action against defendants First Choice Healthcare Solutions, Inc. (“First Choice”) and its former Chairman, CEO, and President Christian Romandetti, Sr.
MAZ Partners, on behalf of a proposed class of all investors who purchased First Choice common stock during the Class Period, alleges in the action that the defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 promulgated thereunder by failing to disclose that defendants were involved in an undisclosed “pump-and-dump” stock manipulation scheme, orchestrated by Romandetti, to artificially inflate the price and trading volume of First Choice common stock. Romandetti and his co-conspirators have been indicted by the U.S. Department of Justice, and sued by the U.S. Securities and Exchange Commission, for this conduct.
For further information about this case, contact:
Chet B. Waldman
Joshua W. Ruthizer
COURT PRELIMINARILY APPROVES SETTLEMENT OF CLASS ACTION
There has been a proposed “Settlement” of claims against First Choice Healthcare Solutions, Inc. (“FCHS”) and Christian Romandetti, Sr., who was FCHS’s Chairman, Chief Executive Officer, and President (collectively, the “Defendants”). The Settlement would resolve a lawsuit in which the the Lead Plaintiff alleges that Defendants disseminated materially misleading information to the investing public between April 1, 2014, and November 14, 2018, inclusive (the “Class Period”). Lead Plaintiff and Defendants disagree on whether Lead Plaintiff could have won at trial, and if so, how much money it, and the class it seeks to represent (the “Settlement Class”), could receive. Defendants have denied and continue to deny all charges of wrongdoing or liability against them.
Defendants have agreed to pay or caused to be paid a Settlement Amount of $1,000,000 (the “Settlement Fund”). The Settlement provides that the Settlement Fund, after deduction of any Court-approved attorneys’ fees and expenses, notice and administration costs, an award to Lead Plaintiff pursuant to 15 U.S.C. § 78u–4(a)(4) of costs and expenses (including lost wages) directly relating to its representation of the Settlement Class, and taxes, is to be divided among all Settlement Class Members who have a Recognized Loss and submit a valid Claim Form, in exchange for the Settlement of this case and the Releases by Settlement Class Members of claims related to the case. For all details of the Settlement (including the definitions of all terms herein with initial caps), read the full Notice, available at the settlement website: www.FirstChoiceSecuritiesLitigation.com.
The Court will hold a hearing on July 26, 2021 at 10:00 a.m. to consider whether to approve the Settlement, whether to approve a request by the lawyers representing all Settlement Class Members of up to 25% of the Settlement Fund for attorneys’ fees, plus actual expenses up to $30,000 for litigating the case and negotiating the Settlement, and whether to award Lead Plaintiff its costs and expenses (including lost wages) of up to $5,000. The Court may change the date and time of the Final Approval Hearing without notice or hold the Final Approval Hearing by telephone of video conference. Any change to the Final Approval Hearing will be posted on the settlement website.
On June 15, 2020, FCHS filed a Chapter 11 voluntary bankruptcy petition in the United States Bankruptcy Court for the Middle District of Florida. The bankruptcy could adversely affect whether individual claims can proceed against FCHS and what damages, if any, Settlement Class Members could receive from FCHS. The detailed Notice, available at www.FirstChoiceSecuritiesLitigation.com, explains more information about the bankruptcy.
Middle District of Florida Denies Defendants’ Motions to Dismiss Securities Fraud Class Action Against First Choice Healthcare Solutions and its Former CEO Christian Romandetti.
On February 14, 2020, United States District Judge Paul Byron of the Middle District of Florida issued an Order adopting and confirming Magistrate Judge Leslie Hoffman’s Report and Recommendation, and denying the motions to dismiss by Defendants First Choice and its former CEO Romandetti. Judge Byron agreed with Magistrate Judge Hoffman’s “well-reasoned analysis” that Lead Plaintiff MAZ Partners LP had alleged a claim for violations of Sections 10(b) and 20(a) of the Exchange and SEC Rule 10b-5 arising out of Romandetti’s role in the undisclosed pump-and-dump stock manipulation scheme that occurred during the Class Period.
First, during the Class Period, Romandetti repeatedly certified, in writing pursuant to the Sarbanes-Oxley Act of 2002 (“SOX”), that he disclosed “[a]ny fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal control over financial reporting,” when he did not disclose the pump-and-dump scheme or his role in it. Judge Byron found that neither Romandetti nor FCHS “disputes that these statements were materially misleading,” and that their arguments that the SOX certification could not form the basis of liability were a “mischaracterization” of a relevant Eleventh Circuit precedent.
Second, the Defendants, in FCHS’s Form 10-Ks filed during the Class Period, stated that FCHS common stock could “be subject to wide fluctuations in response to many risk factors,” and attributed those fluctuations to several, possible, hypothetical factors, but omitted the then-existing stock manipulation scheme. Judge Byron found that “Defendants put the cause of FCHS stock volatility at issue by publishing a list of risk factors, thereby creating an obligation to make the list complete and accurate. Their failure to include a known cause of the stocks’ price fluctuations made the partial list of risk factors materially misleading.”
Judge Byron also rejected the Defendants’ other arguments seeking dismissal. He found the Defendants’ argument that Magistrate Judge Hoffman should have dismissed MAZ’s Complaint outright and required repleader, or stricken certain allegations, “puzzling” in light of the Report’s “fine parsing” of MAZ’s allegations, and that contrary to Defendants’ arguments otherwise, “the conclusion that certain allegations cannot form the basis of a securities fraud claim does not necessarily mean those allegations are no longer at issue. Although these allegations do not amount to actionable misrepresentations, they remain relevant to other disputed facts, such as the existence of the alleged pump and dump scheme, Romandetti’s scienter, and whether Romandetti’s actions are imputable to FCHS.” Judge Byron also found that it was “unclear” whether “the bespeaks caution doctrine,” through which the Defendants could escape liability for forward looking statements with sufficient risk disclosures, “is even relevant in this case;” in light of Romandetti’s ongoing involvement in the pump-and-dump scheme, “Defendants’ argument that forward-looking cautionary statements should immunize their failure to disclose ongoing fraud is, quite frankly, absurd;” and, in any event, the risk disclosures were inadequate as “it defies reason to believe that such innocuous statements provide meaningful notice that FCHS was actively manipulating its stock prices.” Finally, Judge Byron rejected the Defendants’ arguments and concluded that MAZ’s complaint adequately alleges reliance and the Defendants’ scienter – the intent to defraud.
Wolf Popper LLP Announces That It Has Filed A Securities Class Action Lawsuit Against First Choice Healthcare Solutions and its Former CEO Christian Romandetti
NEW YORK, March 29, 2019 /PRNewswire/ -- Wolf Popper LLP today announced that it has filed a securities class action lawsuit in the United States District Court for the Middle District of Florida against First Choice Healthcare Solutions, Inc. ("First Choice") (OTC: FCHS) and its former Chairman, CEO, and President Christian Romandetti, Sr. The case, MAZ Partners LP v. First Choice Healthcare Solutions, Inc., No. 6:19-cv-00619 (M.D. Fla.), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5 on behalf of MAZ Partners and a proposed Class of purchasers of First Choice common stock between April 1, 2014 and November 14, 2018 ("Class Period").
The action alleges that during the Class Period, defendants were engaged in an undisclosed pump and dump scheme that manipulated and artificially inflated the price of First Choice common stock, and failed to disclose their involvement, rendering certain of their public statements materially misleading. On November 15, 2018, after a federal criminal indictment and an SEC enforcement action were announced against Romandetti and his co-conspirators, First Choice common stock declined $0.66 per share or nearly 65%, to close at $0.35 per share.
If you are a member of the proposed Class and wish to serve as Lead Plaintiff, you must file a motion with the Court no later than May 28, 2019. A lead plaintiff is a representative party acting on behalf of other Class members in directing the litigation. Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice. Members may also choose to do nothing and remain part of the proposed Class.
If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Chet B. Waldman at (877) 370-7703 or firstname.lastname@example.org.
MAZ Partners is represented by Wolf Popper, a firm with offices in New York, NY; San Juan, Puerto Rico; Houston, TX; Chicago, IL; and Springfield, IL. Wolf Popper has successfully recovered billions of dollars for defrauded investors. More information about Wolf Popper can be found at www.wolfpopper.com.