SAN FRANCISCO--(BUSINESS WIRE)--Hagens Berman Sobol Shapiro, LLP, a national investor-rights law firm, today announced it is investigating St. Jude Medical, Inc. (NYSE: STJ) (“St. Jude”) for potential violations of the securities laws and advised investors of the Feb. 5, 2013, lead plaintiff deadline in a securities lawsuit filed on their behalf.
“Leaving out vital information in an earnings announcement is dishonest enough, but profiting from insider selling while doing it is shameful.”
If you purchased shares of St. Jude common stock between Oct. 17, 2012 and Nov. 20, 2012, inclusive (the “class period”), suffered significant losses and wish to move to be a lead plaintiff, you may contact Hagens Berman Partner Reed Kathrein, who is leading the firm’s investigation, by calling (510) 725-3000 or emailing STJ@hbsslaw.com.
The deadline to move for lead plaintiff in the filed lawsuit is Feb. 5, 2013. The lawsuit, filed on Dec. 7, 2012, in the U.S. District Court for the District of Minnesota, alleges that St. Jude and its chief executives distributed misleading information to shareholders regarding the Food and Drug Administration’s (FDA) ongoing investigation of the company’s facility in Sylmar, Calif.
In 2011, St. Jude told its physicians about abrasion failures with the company’s Riata product, a medical lead used to connect implantable cardiac defibrillators (ICDs) to the heart. This resulted in a recall of the Riata product, according to the complaint.
As St. Jude developed its new ICD lead, the Durata, the FDA continued its investigation of the conditions and practices at the company’s facility in Sylmar, and as a result, the FDA issued a Form 483, a form used by FDA investigators to note objectionable conditions or practices that could ultimately result in more serious public FDA warnings.
According to the lawsuit, on Oct. 17, 2012, during St. Jude's third quarter earnings announcement, the company stated that the ongoing FDA inspection of the company was likely to result in the issuance of a Form 483, but company executives failed to give specific details regarding the noted problems and the products in question. After this announcement, St. Jude publicly released a version of the Form 483, which omitted much of the FDA’s findings, the lawsuit alleges.
On Nov. 20, 2012, the FDA released its own version of the Form 483 it had issued to the St. Jude facility in question. The FDA’s version revealed that a majority of the observed problems directly affected the Durata lead. After this information was released, St. Jude stock, which has 301 million shares outstanding, fell by $4.34, a 12 percent drop.
During the class period, St. Jude CEO Daniel Starks, privy to non-public information concerning the company and the FDA report on its Durata product, sold 200,000 shares of company stock.
“When you compare the information St. Jude provided to its investors with the information the FDA issued, it’s clear that St. Jude misled its shareholders in order to preserve its stock value,” said Mr. Kathrein, who is leading the firm’s investigation. “Leaving out vital information in an earnings announcement is dishonest enough, but profiting from insider selling while doing it is shameful.”
The firm also reminds whistleblowers with inside information that rewards may be available to individuals who report information leading to a successful enforcement action by the Securities and Exchange Commission. Under the new SEC whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC.
More information about this investigation is available at www.hb-securities.com/STJ.
Hagens Berman Sobol Shapiro, LLP is an investor-rights class-action law firm with offices in 10 cities. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the law firm and its successes can be found at www.hbsslaw.com. The firm’s securities law blog is at http://www.meaningfuldisclosure.com.