On Friday, a securities class action was filed in the Southern District of Florida against Cano Health and its board of directors, regarding the company’s Securities and Exchange Commission (SEC) filings and the company’s financial statements.
Cano Health is a primary health company and owns several primary care medical centers and pharmacies, the complaint said. As a publicly traded company, Cano is required to create timely filing periodic financial reports with the SEC and complying with Financial Accounting Standards Board (FASB) guidelines, including Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC 606”). Particularly, under ASC 606, Cano must analyze its revenue recognition with respect to, inter alia, certain Medicare risk adjustments.
The plaintiff accuses Cano of materially false and misleading statements regarding the its business, operations, and compliance policies. These accusations include claims that the defendants “overstated” due diligence in connection with acquisitions, resulting in misstated capitated revenue, direct patient expense, accounts receivable and payable, and other data.
The plaintiff also notes that these failures resulted in a delay in posting current financial information and that the delay in posting information as well as the corrected financial statements has resulted in a drop in stock price among the affected class.
Plaintiff is suing for violations of Section 10(b) of the Exchange Act and Rule 10b-5 and violations of Section 20(a) of the Exchange Act. Plaintiff is represented by Miller Shah LLP.