Investors in The Ensign Group have until Dec. 7 to seek a lead role in a proposed securities class action over care and billing allegations, according to Rosen Law Firm, counsel for named plaintiff Nicholas Perusek.
Investor Perusek filed the complaint Oct. 8 in the U.S. District Court for the Central District of California. It names Ensign, CEO Barry R. Port and Chief Financial Officer Suzanne D. Snapper as defendants. The proposed class covers people and entities who purchased or otherwise acquired publicly traded Ensign securities from Feb. 10, 2022, through June 18, 2026.
The complaint says Ensign neglected elderly residents and manipulated self-reported quality measures. It alleges nursing-assistant hours were falsified and Medicare and Medicaid were improperly billed. It also says administrator licenses were rented from people who were not generally present at, or managing, the facilities. The filing asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act and SEC Rule 10b-5. The allegations have not been established in court.
The complaint cites June reports by Hunterbrook Media and Muddy Waters Research. Hunterbrook estimated that Ensign facilities provided 5 million fewer nursing-care hours than residents needed from July through November 2024, and put the cost of closing that gap at $161 million. Hunterbrook Capital disclosed a short position in Ensign when the report was published. Muddy Waters alleged license rentals at an estimated roughly 20% of Ensign's skilled-nursing facilities; its investigators said they identified concerns at 12 of 57 facilities they visited. The report also disclosed a short position. Hunterbrook published a June 18 follow-up with further allegations involving resident hunger, payroll records, staffing and licensing.
The complaint attributes a $13.88-per-share decline, or 8.15%, to $156.42 on June 8 to Hunterbrook's report. It also links declines of $4.52, or 2.98%, to $147.13 on June 11, and $2.19, or 1.4%, to $153.65 on June 18 to later reports.
Rosen's notice says the court had not certified a class when it was issued. Investors may remain potential members of a future class without seeking the lead role by the Dec. 7 deadline, the firm said.
