This securities fraud class action alleges that Globus, a medical device company, failed to disclose (1) its relationship with a significant distributor was deteriorating; (2) the deterioration negatively impacted Globus’s financial performance; and (3) as a result, Globus’s prospects and statements were false and misleading.
Globus develops products to treat patients with musculoskeletal disorders and currently focuses on products to treat patient with spine disorders.
Who Is Affected?
This securities fraud class action is brought on behalf of a class consisting of purchasers of Globus Medical, Inc. securities between February 26, 2014 and August 5, 2014, inclusive, seeking to pursue remedies under the Exchange Act of 1934. Globus is a medical device company that develops products to treat patients with musculoskeletal disorders. Globus is incorporated in Delaware with its principal executive offices in Audubon, Pennsylvania. Its common stock trades on the NYSE under ticker symbol “GMED.”
This class action lawsuit was filed on September 29, 2015 and is captioned Mark Silverstein, et al. v. Globus Medical, Inc., et al. It was filed in the Pennsylvania Eastern District Court and its civil docket number is 2:15-cv-05386-WB. The class period runs from February 26, 2014 through August 5, 2014, inclusive.
At the beginning of the class period, on February 26, 2014, Globus issued its full year and forth quarter 2013 results, wherein Globus’s Chairman and CEO, David Paul, stated 2013 had been an outstanding year for Globus and that he was confident in Globus’s ability to produce industry leading growth and outstanding profitability. These statements had been subsequently reaffirmed in press issues released in March and April of 2014.
On August 5, 2014, Globus announced its financial results for the second quarter of 2014 substantially lowering its revenue guidance for 2014. Globus disclosed that certain operating challenges had resulted in sales growth below its historical trends. The news caused Globus’ stock to fall 18% the following day causing the plaintiff in this class action lawsuit to suffer economic damages.
This case is in the notice period. When a shareholder brings suit under certain federal securities law, generally that shareholder must give notice via a press release. This notice starts a sixty-day period of time when any shareholder can investigate the underlying claims of the lawsuit and then elect to bring suit as well. At the end of this sixty-day period, the court appoints one shareholder (or a group of shareholders) to prosecute the securities litigation. We will review the docket again in June and update this page as warranted.