St. Jude Medical, Inc. Summary: According to the law firm press release, St. Jude develops, manufactures and distributes cardiovascular medical devices. More specifically, the Complaint alleges that the defendants failed to disclose and misrepresented that the Company’s Riata and Riata ST defibrillator leads were associated with short circuits and protruding wires, and that the Company’s QuickSite and QuickFlex Left-Ventricular leads also suffered from protruding wires. A “lead” is a wire that connects a defibrillator to the heart.
During the Class Period, the defendants told investors that two of the Company’s defibrillator leads, the Riata and Riata ST electrical wire, had been observed to wear through the silicone casing meant to contain them and protrude into the body. St. Jude thereafter discontinued sales of the Riata and Riata ST. However, the defendants failed to disclose the full extent of the problems with its products. First, the defendants failed to disclose that the Riata and Riata ST defibrillator leads were also associated with short circuits unrelated to the protruding wires. Although less frequent than the protrusions, the short circuits were much more dangerous. Second, the defendants failed to disclose that two other leads sold by the company, the QuickSite and QuickFlex Left-Ventricular leads, also suffered from the same protruding wires that plagued the Riata and Riata ST.
On March 27, 2012, The New York Times disclosed the results of an analysis performed by an independent researcher, Dr. Robert Hauser, which indicated that the Riata and Riata ST caused short circuits. However, the defendants vehemently challenged these findings, thus maintaining the artificial inflation in St. Jude’s stock.
On April 4, 2012, the defendants finally disclosed that the QuickSite and QuickFlex Left-Ventricular leads also suffered from the same protruding wire defect as the Riata and Riata ST. As a result, sales of the QuickSite and QuickFlex Left-Ventricular leads were also discontinued. Following these disclosures, the closing price of St. Jude’s stock dropped from $43.80 to $38.91 over three trading days, a decline of over 11 percent.
On August 20, 2012, the Plaintiff filed a Notice voluntarily dismissing this action without prejudice.
SIC Code: 3845
Industry: Medical Equipment & Supplies
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