Stockholders v Cross Country Healthcare, Inc.
Cross Country Healthcare Fails to Mention Problems
Several class actions have been filed against temporary nurse staffing company Cross Country Healthcare, Inc., (Nasdaq:CCRN) and certain of its officers and directors by stockholders who purchased the company's common stock between October 25, 2001, and August 6, 2002. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.
The lawsuit alleges that, during the applicable period, the defendants knew but concealed from the investing public that demand for Cross Country's core service-- short-term, temporary nursing contracts-- was not as great as represented. The defendants also failed to disclose that the company was experiencing problems with orders being received and then abruptly cancelled by hospitals, cutting into its profit margins. Finally, the company experienced a drop in the number of its full-time nurses it employed, and did not warn investors.
On August 7, 2002, with the news of the decline in demand and drop in the number of its full-time nurses, Cross Country shares fell to a low of $13.06 in intra-day trading, a decline of more than 50% from the previous day's closing price of $26.19. Cross Country's share price closed below the IPO price for the first time in its history, and it did so definitively at $14.34, or 15% below the IPO price and 45% below the previous day's close.
If you purchased securities issued by Cross Country during the applicable period, you may request appointment by the court as a lead plaintiff if you do so by October 4, 2004. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the court must determine that your claim is typical of the claims of other class members, and that you will adequately represent the class. Under certain circumstances, one or more class members may together serve as lead plaintiffs. Your ability to share in any recovery is not affected by the decision whether or not to serve as a lead plaintiff. You may retain any counsel of your choice to serve you in this action, or you may choose to do nothing, and remain in the class as a silent member.
