Coughlin Stoia Files LawSuit Against CardioNet

Coughlin Stoia Geller Rudman & Robbins (Coughlin Stoia) has filed a class action in the US District Court for the Eastern District of Pennsylvania on behalf of purchasers of CardioNet common stock during the period between April 30, 2009 and July 10, 2009 (class period).

The complaint charges CardioNet and certain of its officers and directors with violations of the Securities Exchange Act of 1934.

Reportedly, the complaint alleges that during the Class Period, defendants issued materially false and misleading statements concerning the company’s Mobile Cardiac Outpatient Telemetry (MCOT), including making aggressive projections for 2009 through 2011.

Defendants further downplayed the potential for Pennsylvania’s Medicare carrier, Highmark Medicare Services (Highmark), to reduce its reimbursement rate for the company’s MCOT. As a result of defendants’ false and misleading statements, CardioNet stock traded at artificially inflated prices during the Class Period, reaching a high of $19.60 per share on May 19, 2009.

On June 30, 2009, CardioNet announced that it was lowering its full year 2009 guidance and withdrawing its 2010 and 2011 guidance based on lower-than-anticipated commercial reimbursement rates for its MCOT. On this news, CardioNet’s shares fell $6.75 per share from $16.32 per share on June 30, 2009, to close at $9.57 per share on July 1, 2009, a one-day decline of 41%.

Moreover, on July 12, 2009, CardioNet announced that it was withdrawing its full year 2009 guidance based on a drastic reduction in its reimbursement rate by Highmark. As a result, CardioNet’s stock fell another $2.96 per share to close at $5.87 per share on July 13, 2009 – a one-day decline of 34%.

Plaintiffs seek to recover damages on behalf of all purchasers of CardioNet common stock during the Class Period. The plaintiffs are represented by Coughlin Stoia, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.