MedQuist disclosed that it has agreed to pay $7.75 million to settle a shareholder class-action lawsuit filed against the company and several former officers.
The provider of medical transcription and health information management services, which trades on the Pink Sheets, added that neither the company nor any individual defendants admitted wrongdoing in connection with the proposed settlement.
Also named in the lawsuit are Brian J. Kearns, David A. Cohen, John A. Donohue, Ethan Cohen, John W. Quaintance, and Ronald F. Scarpone.
The lead plaintiff is the Greater Pennsylvania Carpenters Pension Fund.
The lawsuit, filed in U.S. District Court for the District of New Jersey in November 2004, alleged that MedQuist and the individual defendants violated federal securities laws by issuing a series of false and misleading statements to the market, thus artificially inflating the market price of the company’s securities.
The settlement is subject to court approval.
MedQuist has not filed quarterly or annual results with the Securities and Exchange Commission for several years; it faces investigations by both the SEC and the Department of Justice.