Dynacq (NASDAQ:DYIIE)
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Cauley Geller Announces Class Action Lawsuit Against Dynacq Healthcare, Inc. On
Behalf of Investors
NEW YORK, Jan. 5 /PRNewswire/ -- The Law Firm of Cauley Geller Bowman & Rudman,
LLP announced today that a class action lawsuit has been filed in the United
States District Court for the Southern District of Texas, Houston Division on
behalf of purchasers of Dynacq Healthcare, Inc. (formerly DYII) ("Dynacq" or
the "Company") publicly traded securities during the period between January 14,
2003 and December 18, 2003, inclusive (the "Class Period"). A copy of the
complaint filed in this action is available from the Court, or can be viewed on
the firm's website at
http://www.cauleygeller.com/show_case.asp?ccode=214&pcode=10&pp=4 .
The complaint charges that defendants Dynacq, Philip S. Chan, and Chiu M. Chan
violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and
Rule 10b-5 promulgated thereunder, by issuing a series of material
misrepresentations to the market between January 14, 2003 and December 18, 2003.
More specifically, the complaint alleges that the defendants' statements were
materially false and misleading because they failed to disclose and/or
misrepresented the following adverse facts: (1) that the Company had materially
overstated its earnings, revenues, net income, and earnings per share; (2) that
the Company was improperly accounting for its costs and revenue in violation of
Generally Accepted Accounting Principals ("GAAP"); (3) that the Company lacked
adequate internal controls and was therefore unable to ascertain the true
financial condition of the Company; and (4) that as a result, the value of the
Company's net income and financial results were materially overstated at all
relevant times.
On December 1, 2003, the Company announced that it was requesting an automatic
extension of up to 15 days for filing its 2003 Form 10-K. The Company stated
that recently the Division of Corporation Finance of the United States
Securities and Exchange Commission ("SEC") commented upon Dynacq's periodic
filings. On December 16, 2003, the Company announced that it would further
postpone the filing of its 2003 Form 10-K until the SEC completed its review of
Dynacq's periodic filings and its independent auditors have completed their
audit of the Company's Aug. 31, 2003 financial statements.
On December 18, 2003, the Company announced that Ernst & Young, LLP ("E&Y")
resigned late on December 17, 2003 as the Company's independent auditor
effective immediately. E&Y verbally advised the Company that E&Y resigned due
to the Company's lack of internal controls necessary to develop reliable
financial statements. News of this shocked the market with shares of Dynacq
falling 18.56 percent or $2.04 per share to close at $8.95 per share on December
18, 2003.
The Company further shocked the market when it announced, after the markets had
closed on December 18, 2003, that it had received a NASDAQ Staff Determination
stating that because Dynacq failed to comply with the requirement of NASD
Marketplace Rule 4310 (c) (14), that it file a copy of its Form 10-K Annual
Report to the Securities and Exchange Commission ("SEC") in a timely fashion,
that its common stock would be delisted from the NASDAQ on December 30, 2003,
unless Dynacq requested a hearing. Additionally, the Company disclosed that it
had received a notice from the Ft. Worth, Texas office of the SEC that it was
conducting an informal investigation pertaining to Dynacq's reporting of its
financial statements, its recognition of costs and revenue, its allowances for
doubtful accounts, and its internal controls.
News of this shocked the market. Shares of Dynacq plummeted 54% or $4.86 per
share to close at $4.09 per share on December 19, 2003.
If you bought Dynacq publicly traded securities between January 14, 2003 and
December 18, 2003, inclusive, and you wish to serve as lead plaintiff, you must
move the Court no later than February 24, 2004. If you are a member of this
class, you can join this class action online at
http://www.cauleygeller.com/template8.asp?pcode=6&pp=1 . Any member of the
purported class may move the Court to serve as lead plaintiff through Cauley
Geller or other counsel of their choice, or may choose to do nothing and remain
an absent class member.
Cauley Geller is a national law firm that represents investors and consumers in
class action and corporate governance litigation. It is one of the country's
premiere firms in the area of securities fraud, with in-house finance and
forensic accounting specialists and extensive trial experience. Since its
founding, Cauley Geller has recovered in excess of two billion dollars on behalf
of aggrieved shareholders. The firm maintains offices in Boca Raton, Little
Rock and New York.
If you have any questions about how you may be able to recover for your losses,
or if you would like to consider serving as one of the lead plaintiffs in this
lawsuit, you are encouraged to call or e-mail the Firm or visit the Firm's
website at http://www.cauleygeller.com/ .
Contact:
CAULEY GELLER BOWMAN & RUDMAN, LLP
Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq.
Client Relations Department:
Jackie Addison, Heather Gann or Chandra West
P.O. Box 25438
Little Rock, AR 72221-5438
Toll Free: 1-888-551-9944
Fax: 1-501-312-8505
E-mail:
DATASOURCE: Cauley Geller Bowman & Rudman, LLP
CONTACT: Samuel H. Rudman, Esq. or David A. Rosenfeld, Esq., both of
Cauley Geller Bowman & Rudman, LLP, +1-631-367-7100
Web site: http://www.cauleygeller.com/
http://www.cauleygeller.com/template8.asp?pcode=6&pp=1
http://www.cauleygeller.com/show_case.asp?ccode=214&pcode=10&pp=4