The remaining consolidated case was voluntarily dismissed on July 11, 2008 and the case has been closed.
Two similar class actions were filed in the same district. However, the plaintiff in one case voluntarily dismissed charges without prejudice. On November 24, 2007 the judge approved motions for lead plaintiff and lead counsel. The plaintiffs filed a Consolidated Complaint on January 18, 2008 and defendants followed with a motion to dismiss the complaint on February 28, 2008. After hearing oral arguments on the motion, the judge dismissed the case with prejudice on June 6, 2008.
According to a press release dated August 24, 2007, the complaint charges Advanced Medical and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Advanced Medical is engaged in the development, manufacture and marketing of medical devices for the eye.
Specifically, the complaint alleges that defendants violated the federal securities laws by disseminating false and misleading statements to the investing public and concealing negative information, making it impossible for shareholders to gain a meaningful or realistic understanding of the risks and long-term market success of the Company’s profitable contact lens solution, Complete MoisturePlus™ Multipurpose Solution. As a result of defendants’ false statements, Advanced Medical stock traded at inflated levels during the Class Period, during which time the Company’s top officers and directors were able to reap more than $6.8 million in insider trading proceeds.
According to the complaint, in November 2006, prior to the Class Period, the Company had announced a voluntary recall of certain eye care product lots and the related manufacturing capacity constraints caused by a production-line issue at its manufacturing plant in China. By the beginning of the Class Period, the defendants had successfully convinced the market that problems with Complete were in the past. Then on May 25, 2007, after the market closed, the Company issued a press release announcing the voluntary recall of Complete due to the risk of corneal infection that was linked to the use of Complete. On this news, Advanced Medical stock collapsed, dropping $5.51 per share on volume of 16.2 million shares.