Retained by Robbins Geller Rudman & Dowd LLP
Vega Economics expert Michael J. Willis, PhD, served as an expert witness in St. Clair County Employees’ Retirement System v. Acadia Healthcare Company, Inc. Prof. Willis was engaged by Robbins Geller Rudman & Dowd LLP to analyze Acadia Healthcare’s fiscal year 2017 financial guidance and the budgeting practices that supported it following the company’s acquisition of the UK-based Priory Group.
Dr. Willis concluded that Acadia’s budgeting process was conducted in an accelerated, top-down manner that was inconsistent with best practices for a complex organization facing high information asymmetry. He found that the assumptions underlying the FY17 budget, particularly those related to labor costs and patient census, were overly aggressive and unrealistic, making the company’s financial guidance unattainable. His analysis showed that actual performance data early in 2017 already indicated that Acadia was unlikely to meet its guidance, yet the company continued to affirm it. He also identified evidence suggesting that income-increasing accounting accruals were used to improve reported results.
In addition to his initial report, Dr. Willis prepared a rebuttal addressing the opposing expert’s opinions, highlighting methodological flaws and overlooked evidence. His work in this case underscored the importance of rigorous financial planning and transparent disclosures, providing clarity on how flawed budgeting and guidance practices can mislead investors and impact corporate accountability.
The litigation, which began in 2018, recently reached a settlement in principle between Acadia Healthcare and the plaintiffs, avoiding a jury trial that had been scheduled for November 18, 2025. This follows a partial summary judgment in favor of the investors on the issue of reliance, and ongoing disputes over whether Acadia’s statements were protected under the safe harbor provision and whether loss causation was established.
Michael Willis is a Management Practice Associate Professor of Accounting at the University of Cambridge Judge Business School and Director of the Executive Master of Accounting Programme. He holds a PhD in Accounting from the Wharton School of the University of Pennsylvania, an MBA, and a BS in Computer Science from Brigham Young University. He has more than 17 years of experience analyzing financial statements and corporate transactions and has served as an expert witness in multiple matters involving complex accounting issues under U.S. GAAP and IFRS.
