Philadelphia, Pennsylvania--(Newsfile Corp. - May 28, 2022) - On November 1, 2021 the Oak Street Health, Inc. OSH received a civil investigative demand ("CID") from the United States Department of Justice ("DOJ"). According to the CID, the DOJ was investigating whether the Company violated the False Claims Act. The CID also requested documents and information related to the Oak Street's relationships with "third-party marketing agents" and Oak Street's "provision of free transportation to federal health care beneficiaries."
Oak Street revealed the DOJ's investigation on November 8, 2021 and the share price fell $9.75, or more than 20%.
In the wake of the disclosure, a federal class action complaint was filed which alleged that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors: (1) that Oak Street maintained relationships with third-party marketing agents likely to provoke law enforcement scrutiny; (2) that Oak Street was providing free transportation to federal health care beneficiaries in a manner that would provoke law enforcement scrutiny; (3) that these activities may be violations of the False Claims Act; (4) that, as such, Oak Street was at heightened risk of investigation by the DOJ and/or other federal law enforcement agencies; (5) that, as a result, Oak Street was subject to adverse...
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