Spectranetics Corp Agrees to Settlement In Shareholder Class Action
September 2010 - To all persons or entities who purchased or otherwise acquired the common stock of Spectranetics from March 16, 2007 to September 4, 2008, inclusive you may be able to participate in the proposed settlement. The Settlement will provide an $8,500,000 Settlement Consideration for the benefit of investors who purchased or otherwise acquired shares of Spectranetics common stock between March 16, 2007 and September 4, 2008, inclusive. The Court will hold a Settlement Fairness Hearing on January 21st 2011 in Denver, Colorado. At this hearing, the Court will consider whether the Settlement and the Plan of Allocation are fair, reasonable and adequate. If there are written objections, the Court will consider them. The Court will also listen to people who have asked in writing by November 23, 2010 to speak at the hearing.
June 2010 - The Spectranetics Corporation announced in a press release on June 21, 2010, that it has agreed in principle to settle both the securities class action litigation pending against the company and certain of its current and former officers and directors and the stockholder derivative case naming the company as a nominal defendant and certain of its current and former officers and directors as defendants. The class action was brought on behalf of persons and entities who bought or acquired shares of Spectranetics' common stock between March 16, 2007 and September 4, 2008.
Under the proposed class action settlement, the claims against Spectranetics and its officers and directors will be dismissed with prejudice and released in exchange for a cash payment of $8.5 million to be funded by Spectranetics' Insurers. The proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement, and approval by the U.S. District Court for the District of Colorado following notice to members of the class. Terms for distribution of the settlement fund to class members, less fees awarded by the court to class counsel, and other terms of the settlement will be disclosed in a notice to be sent to class members after preliminary court approval.
Under the terms of the proposed derivative settlement, plaintiffs (on their own behalf and derivatively on behalf of Spectranetics) will dismiss the stockholder derivative case with prejudice and release their claims in exchange for formalizing certain corporate governance procedures and payment of attorneys fees of $350,000. As with the class action settlement, the proposed settlement will be funded by Spectranetics' Insurers and remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement and approval by the U.S. District Court for the District of Colorado.
The Company and the individual defendants have steadfastly maintained that the claims raised in the class action litigation and stockholder derivative case were without merit, and have vigorously contested those claims. As part of the settlements, the Company and the individual defendants continue to deny any liability or wrongdoing under the securities laws.
"I'm pleased that, upon approval by the Court, we can put the securities class action lawsuit and stockholder derivative case behind us and avoid the distraction and cost associated with protracted litigation," said Emile J. Geisenheimer, Spectranetics' Chairman of the Board of Directors, President and Chief Executive Officer.
The Company also recently became aware that three Spectranetics stockholders filed an individual lawsuit on May 28, 2010 in the United States District Court for the District of Colorado asserting various federal and state claims arising out of the same facts alleged in the securities class action. Two of the three stockholders who brought this case had previously moved unsuccessfully to be appointed as lead plaintiff in the securities class action where they claimed a loss of $1.27 million. Spectranetics intends to defend this lawsuit vigorously.
September 2008 - On Tuesday, September 23th, 2008, a shareholder has filed a proposed class action lawsuit on behalf of all persons or entities who purchased the common stock of Spectranetics Corp. (NASDAW: SPNC) between April 19th, 2007 and September 4th, 2008 in the United States District Court for the District of Colorado in Denver against Spectranetics Corp. and its two top executives over alleged violations of federal securities laws by issuing a series of material misrepresentations to the market, thereby artificially inflating the price of Spectranetics.
According to the complaint the plaintiff alleges that Spectranetics Corp. and certain of the Company’s executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants’ material omissions and dissemination of materially false and misleading statements concerning the Spectranetics Corp.’s business and operations caused Spectranetics Corp.’ stock price to become artificially inflated, inflicting damages on investors. The stockholder alleges that between April 19, 2007 and September 4th, 2008 defendants knew or recklessly disregarded that their public statements concerning its business and operations were materially false and misleading. Specifically, the Complaint alleges that defendants’ public statements failed to disclose or indicate the following: (1) that the Company lacked effective regulatory compliance controls; (2) that the Company was illegally and extensively marketing its laser and catheters for uses that had not been approved by the United States Food and Drug Administration (“FDA”); (3) that the Company failed to report to the FDA that tests found its laser caused significant damage to stents it was using in the clinical trial; (4) that the Company illegally tested several products on patients without FDA approval; (5) that the Company lacked effective internal controls; and (6) as a result of the above, the Company’s financial results were materially inflated.
The plaintiff alleges that on September 4th, 2008, Spectranetics Corp. shocked investors when reports surfaced that Federal Officials had served search warrants on the Company and NASDAQ halted trading of Spectranetics Corp. ‘ common stock. That evening, Spectranetics Corp. issued a press release disclosing that the Company was jointly served by the FDA and U.S. Immigration and Customs Enforcement with a search warrant relating to the promotion, use, testing, marketing, and sales of certain Spectranetics Corp. products, and payments made to medical personnel and an identified institution for this application. According to the complaint the search warrant also requested information about two post-market studies completed during the period from 2002 to 2005 and payments to medical personnel in connection with those studies, as well as information regarding compensation packages for certain Spectranetics Corp.’s personnel. As a result on this news, NASDAQ subsequently halted trading of shares in Spectranetics Corp., but only after it shares had already fallen $4.27 per share, or 47 percent, to $4.73 per share. Then, so the lawsuit, on following day, September 5th, 2008, shares of Spectranetics Corp. were allowed to resume trading and closed at $5.63 per share, a decline of $3.37 per share, or 37 percent, from the September 3rd, 2008 closing price of $9.00 per share. Plaintiff seeks to recover damages on behalf of Class members.