[January 17, 2014]

Rigrodsky & Long, P.A. Announces A Securities Fraud Class Action Lawsuit Has Been Filed Against Merge Healthcare Incorporated

Rigrodsky & Long, P.A.:

• Do you, or did you, own shares of Merge Healthcare (News - Alert) Incorporated (NASDAQ GS: MRGE)?
• Did you purchase your shares before August 1, 2012, or between August 1, 2012 and January 7, 2014, inclusive?
• Did you lose money in your investment in Merge Healthcare Incorporated?
• Do you want to discuss your rights?

Rigrodsky & Long, P.A., including former Special Assistant United States Attorney, Timothy J. MacFall, announces that a complaint has been filed in the United States District Court for the Northern District of Illinois on behalf of all persons or entities that purchased the common stock of Merge Healthcare Incorporated ("Merge" or the "Company") (NASDAQ GS: MRGE) between August 1, 2012 and January 7, 2014, inclusive (the "Class Period"), alleging violations of the Securities Exchange Act of 1934 against the Company and certain of its officers (the "Complaint").

If you purchased shares of Merge during the Class Period, or purchased shares prior to the Class Period and still hold Merge, and wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Timothy J. MacFall, Esquire or Peter Allocco of Rigrodsky & Long, P.A., 825 East Gate Boulevard, Suite 300, Garden City, NY at (888) 969-4242, by e-mail to [email protected], or at: http://www.rigrodskylong.com/investigations/merge-healthcare-incorporated-mrge.

Merge develops software solutions that facilitate the sharing of images to create a more effective and efficient electronic healthcare experience for patients and physicians. The Complaint alleges that throughout the Class Period, defendants made materially false and misleading statements, and omitted materially adverse facts, about the Company's business, operations and prospects. Specifically, the Complaint alleges that the defendants concealed from the investing public that: (a) both the existence and value of millions of dollars of eClinical customer contracts had been falsified, and as a result, the Company's reported subscription backlog and its reported increase in backlog was false and overstated during the six quarters ended September 30, 2013; (b) the Company was experiencing a "continued reluctance amongst large health systems to move forward with enterprise purchases;" (c) Merge lacked effective controls and its disclosure controls were not effective and had not been designed to provide reasonable assurance regarding the "reliability of financial reporting;" (d) Merge had a deficiency in its internal controls which resulted in the failure to properly log and verify customer contracts, the failure to appropriately calculate commissions, and the compensation of salesmen based on purported, and even falsified, contract signings rather than actual cash collections; and (e) as a result, Defendants lacked a reasonable basis for their positive statements about the Company and its business. As a result of defendants' false and misleading statements, the Company's stock traded at artificially inflated prices during the Class Period.

According to the Complaint, on January 8, 2014, before the opening of trading, Merge announced that the existence and/or value of millions of dollars of customer contracts had been falsified for six quarters ending September 30, 2013, in what the Company characterized as a rogue employee's attempt to reach sales quotas and garner $250,000 in additional compensation. The Company also disclosed that its internal investigation had quantified the value of the falsified contracts at approximately $5.8 million and $9.4 million in 2012 and 2013, respectively, stating that those amounts had been previously included in Merge's previously reported subscription backlog total during those years. As a result, the Company stated that it was forced to reduce its previously-announced non-GAAP subscription backlog totals for the Merge DNA segment for the quarterly periods ended June 30, 2012 through September 30, 2013.

On this news, shares in Merge, which had traded as high as $4.71 per share during the Class Period, closed at $2.11 per share on January 9, 2014, on unusually heavy trading volume.

If you wish to serve as lead plaintiff, you must move the Court no later than March 17, 2014. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the proposed class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

While Rigrodsky & Long, P.A. did not file the Complaint in this matter, the firm, with offices in Wilmington, Delaware and Garden City, New York, regularly litigates securities class, derivative and direct actions, shareholder rights litigation and corporate governance litigation, including claims for breach of fiduciary duty and proxy violations in the Delaware Court of Chancery and in state and federal courts throughout the United States.

Attorney advertising. Prior results do not guarantee a similar outcome.

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