$14M Settlement Reached In Dura Securities Suit

$14M Settlement Reached In Dura Securities Suit - 3/24/2009

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2009 News and Press Releases

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News	News 2009
HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

$14M Settlement Reached In Dura Securities Suit
Jocelyn Allison

Securities Law 360. March 24, 2009
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EXCERPT: A $14 million settlement has been reached in a decade-long class action against Dura Pharmaceuticals Inc. that led the U.S. Supreme Court in 2005 to establish standards for loss causation in securities fraud suits. The plaintiffs on Monday asked the U.S. District Court for the Southern District of California to approve an agreement settling claims against Dura, which is now part of Elan Corp. PLC, and three Dura officers targeted in the suit. If approved, the settlement would bring to a close a case that prompted the nation's highest court to require securities fraud plaintiffs to prove a defendant's misrepresentations caused their losses, making it easier for some defendants to argue major stock drops are due instead to market forces. The U.S. Supreme Court's unanimous decision in Dura Pharmaceuticals v. Broudo in January 2005 held that claims against companies following catastrophic stock losses cannot survive a motion to dismiss if there is a reasonable explanation other than outright fraud to account for the losses. First filed in 1999, the cases accused Dura and certain officers of making misrepresentations related to the company's Spiros drug delivery system, which was designed to make it easier for patients to take asthma medicines such as Albuterol. The shareholder plaintiffs claimed Dura rushed the product through development as part of an effort to transition the company from one that marketed the pharmaceutical products of others into one that developed its own drugs. The suit alleged that Dura officials drove the stock price for the company higher in 1997 in order to accomplish a major debt offering to raise much-needed capital and restore the value of their stock options before selling their shares and pocketing the proceeds.

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