According to the Company’s FORM 10-Q for the quarterly period ended September 30, 2001, in August 1999, lead plaintiffs and lead counsel filed a purported consolidated class action complaint adding allegations that the Company issued false and misleading statements with respect to the launch of its NIR ON(R) Ranger(TM) with Sox(TM) coronary stent delivery system and the system's subsequent recall. Following a hearing on a motion by the Company and its officers, the court dismissed the case without prejudice on August 16, 2001.
The original Complaint alleges that defendants issued false and misleading statements during the Class Period about its previously reported revenues and assets. Specifically, the complaint alleges that the Company improperly recorded $40-50 million in revenues in the first nine months of fiscal 1998 due to accounting irregularities at its Japanese subsidiary. In addition, the Complaint alleges that there is an additional $40 million of net unrealizable assets on Boston Scientific's balance sheet also due to similarly improper sales recorded in prior periods. Plaintiff alleges that defendants' misleading positive statements about the Company's financial results artificially inflated the price of Boston Scientific common stock. When news of Boston Scientific's improper accounting practices was reported on November 3, 1998, the Company's stock fell $5.875 per share or 11% before trading in the stock was halted. When trading resumed on November 4, 1998, the stock opened at
$40-1/4, down another $6-1/8. The total percentage drop was 23%.