A class action lawsuit was filed in the United States District Court for the District of Massachusetts on behalf of purchasers of Boston Scientific Corporation common stock during the period between April 20, 2009 and March 12, 2010, inclusive (the “Class Period”). The complaint charges BSX and certain of its officers and directors with violations of the Securities Exchange Act of 1934. BSX is a worldwide developer, manufacturer and marketer of medical devices, including products that focus on the treatment of cardiac arrhythmias and heart failure. Most of BSX’s Cardiac Rhythm Management (“CRM”) products are implantable cardiac defibrillator (“ICD”) systems used to detect and treat abnormally fast heart rhythms (tachycardia). These include implantable cardiac resynchronization therapy defibrillator (“CRT-D”) systems used to treat heart failure, and implantable pacemaker systems used to manage slow or irregular heart rhythms (bradycardia).
The complaint alleges that during the Class Period, defendants made materially false and misleading statements regarding BSX’s business and prospects. Specifically, defendants’ statements to investors during the Class Period misrepresented existing facts known to defendants or recklessly disregarded by them, or omitted to disclose facts defendants knew or disregarded that were necessary to make the statements made not misleading to investors, including the following: (a) sales and demand for the Company’s CRM products had been substantially and materially inflated by the payment of illegal and improper inducements to health care professionals; (b) a material portion of the Company’s CRM reported or anticipated revenues resulted from the sale of products which had been manufactured without required FDA approval, such that they were subject to recall and refund or replacement; (c) demand for the Company’s CRM products had weakened due to the curtailment and cessation of payments of illegal and improper inducements to health care professionals, which defendants attributed to other factors; and (d) defendants failed to timely or fully disclose the problems and defects in the headers of certain of the Company’s ICD products such that defendants’ statements about CRM sales in general and sales of ICDs in particular were materially misleading.
On March 15, 2010, before the market opened, BSX announced that it was suspending sales of and was recalling all of its ICD and CRT-D devices because it had changed the manufacturing process for the devices without obtaining FDA approval. On this news, BSX shares dropped 12.6%, to close at $6.80 per share, on volume of 243 million shares.
If you are a current shareholder and purchased during period between April 20, 2009 and March 12, 2010 and would like to discuss your options of exercising your rights as a shareholder, please contact us.
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