For-profit behavioral healthcare company Psychiatric Solutions, Franklin, Tenn., said it is cooperating with the U.S. Justice Department after receiving a subpoena earlier this year.
Psychiatric Solutions says it's cooperating with Justice Department
“During the first quarter of 2010, we received a subpoena from the United States Department of Justice (the “DOJ”) seeking various documents relating to compensation, stock sales, option awards and option exercises for certain senior level executives and a subpoena from the DOJ seeking various other stock related documents including, but not limited to, communications with investment firms and investors,” the company said in a filing with the Securities and Exchange Commission this week. The company also said the outcome of the department's inquiries is “uncertain, and adverse developments or outcomes can result in adverse publicity, significant expenses, monetary damages, penalties or injunctive relief.”
The filing also mentioned a 2009 stockholder lawsuit and stockholder derivative lawsuit against Psychiatric Solutions and its executives that allege federal securities violations. “We believe that the lawsuits are without merit and are defending them vigorously,” the SEC filing said.
In 2008, Psychiatric Solutions received a subpoena after the Illinois Department of Children and Family Services placed an Illinois facility on “intake hold.”
Earlier this year, Psychiatric Solutions said it had been approached by third parties about a possible sale of the company and that it was weighing its options. For the first quarter, the company reported increased revenue and operating income compared with the same period a year ago.
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