An investor in Medifast filed a lawsuit against Medifast over alleged securities laws violation only on behalf of those who purchased shares of Medifast, Inc. between March 4, 2010 and March 10, 2011. Meanwhile an investigation on behalf of current long term investors in shares of Medifast, Inc. (NYSE:MED) including those who purchased (also) prior to March 4, 2010 and presently continue to hold those shares was announced.

The investigation by a law firm on behalf of current long term investors in stocks of Medifast, Inc. (NYSE:MED) concerns whether certain current and/or former members of Medifasts board of directors and certain executive officers can be held liable in connection with the alleged Securities Laws violations in the lawsuit filed by investors who purchased NYSE MED shares only between March 4, 2010 and March 10, 2011.

According to the complaint filed in the United States District Court for the District of Maryland the plaintiff alleges on behalf of those who purchased or otherwise acquired Medifast securities during the period from March 4, 2010 through and including March 10, 2011 that Medifast, Inc. (NYSE:MED) violated the Securities Exchange Act of 1934 by issuing between March 4, 2010 and March 10, 2011 false and/or misleading statements, as well as failing to disclose material adverse facts about its business, operations, and prospects.
Medifasts 12months Total Revenue increased from $74.09million in 2006 to $165.62million in 2009. Its Net Income rose over the same time frame from $5.16million in 2006 to $11.96million in 2009. For the first three quarters in 2010 Medifast, Inc. reported a combined nine months Total Revenue that succeeded its 12months Total Revenue of 2009. For the first three quarters in 2010 Medifast, Inc. reported a combined nine months Total Revenue of $194.53million. Its combined nine months Net Income of $16.19million also topped its 12months Net Income of 2009.

Shares of Medifast, Inc. (Public, NYSE:MED) traded during 2006 as low as $5.88 but increased throughout 2006 to as high as $19.69. During 2007 and 2008 Medifast shares fell to as low as $3.52 in November 2008. During 2009 and 2010 NYSE MED shares increased to over $30 and peaked in May 2010 as $35.76 per share. In 2011 NYSE MED shares started at slightly below $30 and traded on March 10 still at $21.90 per share.

Then on March 11, 2011 Medifast announced an update regarding its fourth quarter and full year 2010 financial results. The Company, among other things, unexpectedly announced that it requires additional time to complete its year-end financial statements and further stated, in part, that[t]he delay in releasing results is due to additional time needed for the Company to review the recognition of certain expenses in prior periods.

Following this news NYSE:MED shares fell on March 11 from $22.06 to $16.57 and closed on Friday March 18 at $18.36 per share and traded during the following week around $19 per share.