Class-action lawsuits mount against Spectranetics following fed probe
|Former employee and shareholders now suing Spectranetics. Image Source: Spectranetics|
In early September, the FDA and U.S. Immigration and Customs Enforcement served search warrants to the Colorado Springs, Colo.-based Spectranetics, while Nasdaq halted trading of its common stock. The warrants also looked into payments made to medical personnel.
One complaint filed by Dyer & Berens charges Spectranetics, and certain officers and directors, with violations of the Securities Exchange Act of 1934. The Denver-based firm alleges that, during April 19, 2007 and Sept. 4 of this year, defendants made false and misleading statements to the market about its business operations and financial performance.
Dyer specified that Spectranetics failed to disclose it was “improperly promoting its own products and the products of third parties; improperly compensating personnel, including personnel involved in two post-market studies of Spectranetics' products from 2002-2005; and was receiving parts from an international source in violation of customs laws.”
The Seattle-based law firm, Hagens Berman Sobol Shapiro, filed its class action after a former employee filed suit against Spectranetics, claiming he was fired for informing senior management of illegal marketing practices for some of its products.
Hagens’ suit alleges that Spectranetics’ executives issued false and misleading statements concerning operations and finances causing company stock to trade at artificially inflated prices. Throughout the class period, the complaint alleges that the defendants knew or recklessly disregarded the misinformation about company operations and failed to communicate accurate reports to investors.
Spectranetics manufactures and sells its excimer laser approved for use in multiple, minimally invasive cardiovascular procedures. The technology treats cardiovascular conditions by vaporizing lipid-based, calcified and fibrotic plaque, saphenous vein graft disease, and neointimal hyperplasia.