March 3, 2014 / 2:45 PM / in 4 years

UPDATE 1-U.S. Supreme Court agrees to hear Omnicare securities case

By Lawrence Hurley

WASHINGTON, March 3 (Reuters) - The U.S. Supreme Court agreed on Monday to hear an appeal filed by Omnicare Inc., the leading U.S. provider of pharmacy services to the elderly, in a securities class action case filed by investors who say the company made untrue statements prior to a public offering.

Plaintiffs who subscribed to the December 2005 offering sued after whistleblower lawsuits claimed the company paid kickbacks to nursing homes and received kickbacks from drug companies.

Omnicare paid just under $150 million to settle the whistleblower claims. The subsequent securities lawsuit filed by several pension funds focused on statements the company had made saying it was in compliance with the law.

A federal judge in the Eastern District of Kentucky dismissed the plaintiffs’ lawsuit in February 2012, saying they had failed to allege that Omnicare had knowingly made an untrue statement.

The Cincinnati-based 6th U.S. Circuit Court of Appeals revived the lawsuit in a May 2013 ruling, in which it said the plaintiffs only had to claim that the statement was objectively untrue and not that the company knew it was false at the time it was made. Omnicare said in court papers that lower courts are now split on that question.

The court will hear oral arguments and issue a ruling in the case during its next term, which starts in October and ends in June 2015.

The case is Omnicare v. Laborers District Council, U.S. Supreme Court, 13-435.

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