Primary Care Provider Sued Amid Allegations of SEC Violations

On Monday a class action complaint was filed by Reginald Allison against Oak Street Health Inc., and several individual defendants. The case, filed in the Northern District of Illinois, alleges that the company violated Securities and Exchange Commission (SEC) regulations through its marketing practices.

Oak Street, the complaint says, operates primary care centers in the United States. The company engages with Medicare-eligible patients “through the use of an innovative community outreach approach.”

However, the plaintiff claims that this approach exposed the company to liability in the form of a civil investigative demand (CID) from the Department of Justice. Specifically, “According to the CID, the DOJ is investigating whether the Company violated the False Claims Act. The CID also requests 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.’”

SEC filings made for Oak Street’s third quarter report discloses the investigation; however, the plaintiff alleges that the filings from the first and second quarter did not disclose the possible liabilities regarding Oak Street’s marketing and service provisions. The disclosure of the liability resulted in a steep drop in the price of stock in anticipation of possible sanctions.

The plaintiff is suing for violation of Section 10(B) and 20(A) of the SEC Act. The plaintiff is represented by Miller Law LLC and Glancy Prongay & Murray LLP.