KaloBios Pharmaceuticals Inc (NASDAQ: KBIO) Investor Securities Class Action Lawsuit 12/18/2015

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Company Name(s): 
KaloBios Pharmaceuticals
Case Name: 
KaloBios Pharmaceuticals Shareholder Class Action Lawsuit 12/18/2015
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: KBIO
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
12/18/2015
Class Period Begin: 
11/18/2015
Class Period End: 
12/16/2015
Court of Filing: 
U.S. District Court for the Northern District of California
Deadline To File for Lead: 
02/16/2016
Case Dismissed: 
06/23/2017
Date Settled: 
02/09/2017
Settlement Amount: 
$1,500,000
Deadline to Participate in Settlement: 
04/06/2017
Summary: 

June 23, 2017 - The court granted the partial settlement and granted the motion to dismiss of the remaining non-settling defendant with leave to amend.

February 9, 2017 - The court preliminarily approved the partial settlement.

July 1, 2016 - Parties filed a stipulation of partial settlement.

April 28, 2016 - Lead plaintiff and lead counsel were appointed and all cases were consolidated.

February 16, 2016 - Lead plaintiff motions were filed.

December 18, 2015 - An investor in shares of KaloBios Pharmaceuticals Inc (NASDAQ: KBIO) filed a lawsuit in the U.S. District Court for the Northern District of California over alleged violations of Federal Securities Laws by KaloBios Pharmaceuticals Inc in connection with certain allegedly false and misleading statements made between November 19, 2015 and December 17, 2015.

According to the complaint the plaintiff alleges on behalf of purchasers of KaloBios Pharmaceuticals Inc (NASDAQ: KBIO) common shares between November 19, 2015 and December 17, 2015, that the defendants violated Federal Securities Laws.

More specifically, the plaintiff claims that between November 19, 2015 and December 17, 2015 defendants allegedly failed to disclose that the CEO of the Company was engaged in a scheme involving the illegal use of stock from Retrophin, Inc. to pay off debts associated with other unrelated business ventures, that discovery and revelation of the scheme would likely undermine the Company’s operations and prospects, and that, as a result of the foregoing, Defendants’ statements about KaloBios Pharmaceuticals Inc’s business, operations, and prospects, were false and misleading and/or lacked a reasonable basis.

On November 13, 2015, KaloBios Pharmaceuticals Inc announced that it will wind down its operations and that it has engaged the Brenner Group to lead those efforts. Shares of KaloBios Pharmaceuticals Inc (NASDAQ: KBIO) declined to as low as $0.44 per share on November 16, 2015.

Then on November 18, 2015 Martin Shkreli, the chief executive of privately held biopharmaceutical company Turing Pharmaceuticals AG, had been acquiring KaloBios Pharmaceuticals Inc shares on Nov. 16 and 17, according to filings with the Securities and Exchange Commission.

Turing Pharmaceuticals gained notoriety in September for raising the price of an anti-parasite tablet more than 50-fold.

On November 18, 2015, KaloBios Pharmaceuticals Inc announced that it has been informed that an investor group comprised of Martin Shkreli and associates together have acquired more than 50% of the outstanding shares of KaloBios Pharmaceuticals Inc, and that the company is in discussions with Mr. Shkreli regarding possible direction for the company to continue in operation.

On November 19, 2015, KaloBios Pharmaceuticals Inc announced that an investor group led by Martin Shkreli, the Founder and Chief Executive Officer of Turing Pharmaceuticals AG, has acquired 70% of its outstanding shares, and also announced the appointment of Martin Shkreli to the position of Chief Executive Officer and his election as Chairman of the Board.

Shares of KaloBios Pharmaceuticals Inc (NASDAQ: KBIO) grew to as high as $45.82 per share on November 23, 2015.

Then on December 17, 2015, news outlets reported that Martin Shkreli, the CEO of KaloBios Pharmaceuticals Inc, was arrested on fraud charges relating to his illegal use of stock from Retrophin, Inc. to pay off debts associated with other unrelated business ventures.

Shares of KaloBios Pharmaceuticals Inc (NASDAQ: KBIO) were halted on December 17, 2015.

On December 21, 2015, KaloBios Pharmaceuticals Inc announced that on December 17, 2015, Martin Shkreli was terminated as Chief Executive Officer of the Company and resigned from his position as a member of the board of director, and that in addition, on December 17, 2015, Tony Chase resigned from his position as a member of the board of directors.