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Medifast Inc (NYSE: MED) Investor Securities Class Action Lawsuit 03/17/2011

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Lawsuit Overview

Company
Medifast, Inc.
Security
NYSE: MED

Case Name
Medifast Shareholder Class Action 03/17/2011
Type of Lawsuit
Shareholder Class Action
Court of Filing
U.S. District Court for the District of Maryland

Class Period Begin
Class Period End
Deadline To File for Lead
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Settlement Overview

Date Settled
Date Settled
Settlement Amount
$0.00

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Summary

March 28, 2013 - The court granted the defendants' motion to dismiss and ordered the case closed.
November 18, 2011 - The defendants filed a motion to dismiss.

September 19, 2011 - The lead plaintiffs filed an amended complaint.

July 19, 2011 - Lead plaintiffs and lead counsel were appointed.

May 17, 2011 - Lead plaintiff motions were filed.

March 17, 2011 - An investor in shares of MEDIFAST INC (NYSE: MED) filed a lawsuit in the U.S. District Court for the District of Maryland against MEDIFAST INC over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between March 4, 2010 and March 10, 2011.

According to the complaint the plaintiff alleges on behalf of those who purchased or otherwise acquired MEDIFAST INC securities during the period from March 4, 2010 through and including March 10, 2011 that against MEDIFAST INC (NYSE: MED) and certain of its officers 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.

MEDIFAST INC’s 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 (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 INC 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 INC 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.

Date Settled