Zeldes Haeggquist & Eck, LLP, a shareholder and consumer rights litigation firm, has commenced an investigation into Merge Healthcare, Inc. (“Merge” or the “Company”) (NASDAQ: MRGE) to determine whether Merge and the Company’s Officers and Directors have violated the federal securities laws or breached their fiduciary duties owed to the Company and its shareholders.
Merge disclosed today that a former employee falsified millions of dollars worth of customer contracts in an apparent attempt to reach sales quotas and earn about $250,000 in additional commissions. The former employee, who resigned in September, acknowledged that the contracts were not valid and made an offer of restitution.
The month before, in August, 2013, the Company’s CEO Jeffrey A. Surges resigned on August 5, 2013, and Merge’s Chairman of the Board, Michael W. Ferro, Jr., resigned on August 26, 2013.
Merge offers health stations, clinical trial software and other health data and services designed to engage consumers in their personal health.
After identifying the false contracts, Merge authorized an investigation by its outside counsel and a forensic accounting firm, which found that the former employee, who worked in its eClinical business, falsified contracts valued at about $5.8 million and $9.4 million in 2012 and 2013, respectively.
The amounts of the false contracts were included in Merge’s previously reported subscription backlog total during those years, but according to Merge, none of the revenue from the false contracts was recognized. Therefore, Merge reduced its previously reported subscription backlog numbers, but the false contracts did not affect the company’s reported revenue results.
What You Can Do
If you are an investor in Merge, you may have legal claims against Merge and/or its Officers and Directors. If you wish to discuss this investigation, or have questions about this notice or your legal rights, please contact attorney Amber L. Eck at 619-342-8000, or by email at email@example.com. There is no cost to you.