The filed complaint alleges that defendants made false statements and/or concealed that: (i) MPW's recapitalization transaction (the “Recap Transaction”) with Prospect Medical Holdings, Inc. was subject to regulatory approval and had in fact been placed on hold by the Department of Managed Health Care of the Health and Human Services Agency of the State of California (“DMHC”); (ii) accordingly, MPW had misrepresented the regulatory process for the Recap Transaction’s approval; (iii) as a result of the foregoing, MPW overstated the approval prospects and benefits of the Recap Transaction; and (iv) as a result, the Company’s public statements regarding the Recap Transaction were materially false and misleading at all relevant times.