According to a press release dated December 10, 2008, the Complaint alleges that during the Class Period, Medtronic, its Chief Executive Officer and Chief Financial Officer violated the federal securities laws by issuing false and misleading press releases, financial statements, filings with the Securities and Exchange Commission and statements during investor conference calls. The Complaint alleges that, throughout the Class Period, Medtronic – a medical device manufacturer -- made repeated false statements to the investing public concerning one of its flagship products, the INFUSE Bone Graft ("INFUSE"), representing to investors that it was a valuable and reliable source of revenues for the Company.
Specifically, Defendants' statements and their portrayal of INFUSE, a surgically-implanted medical device containing a genetically engineered protein designed to stimulate bone growth, were materially false and misleading because Defendants concealed and failed to disclose material facts known to or recklessly ignored by them about INFUSE that were necessary to make their otherwise positive statements about the product and the Company's financial condition accurate, truthful, and not misleading to investors. In particular, Defendants did not disclose the extent to which revenues from sales of INFUSE were dependent on applications of the product not approved by the United States Food and Drug Administration ("FDA"), or so-called "off-label" uses; did not disclose that a significant and increasing number of patients subjected to such off-label uses of INFUSE were suffering severe medical complications; and hid the fact that the extensive off-label usage of INFUSE was the result of an unlawful campaign by Defendants to market and encourage off-label use of the product.
Defendants' false and misleading statements concerning INFUSE and the Company's financial condition artificially inflated the price of the Company's publicly traded securities during the Class Period. Revelations concerning Defendants' false and misleading statements during the Class Period caused significant losses to investors as the prices of the Company's securities experienced severe declines as a direct result of these revelations, with the Company's stock price closing the day after the end of the Class Period at $31.20 per share, down from a Class Period high of $55.65 per share.
According to an article dated May 27, 2009, Judge Paul A. Magnuson of the U.S. District Court for the District of Minnesota signed off Tuesday on a magistrate judge's report suggesting that the Medtronic Institutional Investor Group — which consists of the Teachers Retirement System of Oklahoma, the Oklahoma Firefighters Pension Fund, Frankfurt-based Union Asset Management Holding AG and Danish investment firm Danske Invest Management A/S — serve as lead plaintiff in the case. Judge Magnuson also named Barroway Topaz Kessler Meltzer & Check LLP, Bernstein Litowitz Berger & Grossmann LLP, Motley Rice LLC and Grant & Eisenhofer PA to serve as co-lead counsel, with Chestnut & Cambronne PA tapped as liaison counsel.
On August 21, 2009, the lead plaintiffs filed a Consolidated Complaint. On October 5, 2009, the defendants responded by filing a motion to dismiss the Consolidated Complaint. On February 3, 2010, Senior Judge Paul A. Magnuson signed the Memorandum and Order stating that Defendants' Motion to Dismiss is Granted in Part and Denied in Part.
On August 11, 2011, the plaintiffs filed a motion to certify the class. The plaintiffs are currently in the discovery phase of the proceedings.
On March 20, 2012, the Court issued an order staying all discovery until further order by the Court.
On July 20, 2012, a Stipulation of Settlement between the parties was entered into the Court's docket.
On July 23, 2012, the Court issued an Order preliminarily approving the proposed settlement.
On November 8, 2012, the Court issued the Judgment Approving Class Action Settlement. The Clerk of the Court was directed to enter final judgment and dismiss this Action with prejudice. In addition, the Court also entered Orders approving plan of allocation of net settlement, and award attorneys' fees.