Guidant investors lose suit over heart devices against its execs

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Guidant investors have lost a class-action lawsuit that claimed Guidant executives hid knowledge of defects in the corporation's heart defibrillators and pacemakers, so the company’s value would not fall at a time it was about to be acquired.

Judge Sarah Evans Barker of the U.S. District of Southern Indiana dismissed the case, saying the investors did not produce enough evidence to show the executives deceived them.

The investors, who consolidated five suits in March 2006, claimed they bought stock at inflated prices as a result of Guidant's not disclosing the problems.

The investors bringing the case in Indianapolis bought Guidant stock between Dec. 1, 2004, and Oct. 18, 2005.

Boston Scientific paid $27 billion to win a bidding war against Johnson & Johnson in late 2007, the latter of which began acquisition talks with Guidant in spring 2004.

The plaintiffs claimed Guidant continued issuing positive news about the company's growth prospects even as problems with the defibrillators and pacemakers began to emerge, despite the fact that the first of several deaths caused by faulty defibrillators occurred in March 2005.

Guidant eventually recalled tens of thousands of certain models of defibrillators, which deliver electronic shocks to correct heartbeats.