Spectranetics Corporation (NASDAQ: SPNC) Investor Securities Class Action Lawsuit 09/23/2008

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Company Name(s): 
Spectranetics Corp
Case Name: 
Spectranetics Corp Shareholder Class Action Lawsuit 09/23/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: SPNC
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
09/23/2008
Class Period Begin: 
03/16/2007
Class Period End: 
09/04/2008
Court of Filing: 
U.S. District Court for the District of Colorado
Deadline To File for Lead: 
11/24/2008
Date Settled: 
09/13/2010
Settlement Amount: 
$8,500,000
Deadline to Participate in Settlement: 
02/21/2011
Summary: 

July 13, 2012 - The court ordered the authorization of the distribution of the net settlement fund.

April 4, 2011 - The court approved the settlement and the plan of allocation and entered the order awarding attorneys’ fees and expenses, and dismissing the action with prejudice.

September 14, 2010 - The court denied defendants' motions to dismiss.

September 13, 2010 - The court preliminarily approved the settlement.

September 7, 2010 - The parties filed a stipulation of settlement.

March 12, 2010 - Defendants filed a supplemental motion to dismiss.

February 10, 2010 - The lead plaintiff filed a supplemental consolidated complaint.

September 18, 2009 - Defendants filed a motion to dismiss.

August 4, 2009 - The lead plaintiff filed an amended consolidated complaint on behalf of investors who purchased Spectranetics Corporation (NASDAQ: SPNC) common shares between March 16, 2007 and September 4, 2008. The lead plaintiff alleges that the defendants violated the Securities Exchange Act of 1934 by issuing false and misleading statements between March 16, 2007 and September 4, 2008.

January 16, 2009 - Lead plaintiff and lead counsel were appointed and all cases were consolidated.

November 24, 2008 - Lead plaintiff motions were filed.

September 26, 2008 - Another investor filed a complaint.

September 24, 2008 - Another investor filed a complaint.

September 23, 2008 - An investor in shares of Spectranetics Corporation (NASDAQ: SPNC) filed a lawsuit in the U.S. District Court for the District of Colorado on behalf of all persons or entities who purchased the common stock of Spectranetics Corporation (NASDAQ: SPNC) between April 19, 2007 and September 4, 2008 against Spectranetics Corporation 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 Corporation.

According to the complaint the plaintiff alleges that Spectranetics Corporation and certain of Spectranetics Corporation’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 Corporation’s business and operations caused Spectranetics Corporation’s stock price to become artificially inflated, inflicting damages on investors. The stockholder alleges that between April 19, 2007 and September 4, 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 Spectranetics Corporation lacked effective regulatory compliance controls; (2) that Spectranetics Corporation 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 Spectranetics Corporation 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 Spectranetics Corporation illegally tested several products on patients without FDA approval; (5) that Spectranetics Corporation lacked effective internal controls; and (6) as a result of the above, Spectranetics Corporation’s financial results were materially inflated.

The plaintiff alleges that on September 4th, 2008, Spectranetics Corporation shocked investors when reports surfaced that Federal Officials had served search warrants on the Company and NASDAQ halted trading of Spectranetics Corporation‘s common stock. That evening, Spectranetics Corporation issued a press release disclosing that Spectranetics Corporation 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 Corporation 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 Corporation’s personnel. As a result on this news, NASDAQ subsequently halted trading of shares in Spectranetics Corporation, 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 Corporation 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.