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Securities

Acadia Facility in California

Acadia Healthcare Company, Inc. touted its “competitive strength” in “quality” in the British mental healthcare market, but according to the complaint for this securities class action, those advantages were an illusion. The complaint claims that the company’s statements about its UK operations and its guidance for 2017 were false or misleading, violating both the Securities Act of 1933 and the Securities Exchange Act of 1934.

BRF Logo

This securities class action is the second recent case alleging that a Brazilian meatpacking company bribed officials to cover up unsanitary conditions at its facilities. Eventually, a two-year investigation and a raid by the Brazilian federal police uncovered the bribery of inspectors and politicians, the use of rotten meat, traces of salmonella, and, finally, evidence that the company’s officials knew about it all. Because it’s a securities class action, the complaint’s central assertion is that the company concealed these activities from investors, in violation of the Securities Exchange Act of 1934.

Innocoll Collagen Matrix

Is the Innocoll Public Holdings sponge containing a local anesthetic a drug or a medical device? The complaint for this class action claims that the company tried to test it as a drug only, claiming that it had discussed the pathway to approval with the Food and Drug Administration (FDA), when it was actually a drug/device combination. Unfortunately, the complaint says that this, and the failure to disclose that its testing was inadequate, were violations of the Securities Exchange Act of 1934. 

Wall Full of Vista Outdoor Gear

The complaint for this securities class action claims that Vista Outdoor, Inc. kept its stock at inflated prices by making false or misleading statements, overstating its financial results, and failing to disclose material facts about its business. For example, it says, the company did not disclose high channel inventories, lack of demand, lack of new product development, continual changes in key management positions, and deteriorating market conditions. Other factors included retailer bankruptcies, softening demand, industry consolidation, and a warm hunting season for the second year in a row. The complaint claims that the company’s optimistic public statements were therefore were violations of the Securities Exchange Act of 1934. 

PixarBio Logo

PixarBio Corporation’s CEO used the company as a vehicle for a feud with InVivo, charges the complaint for this class action, including offering to buy InVivo for roughly half its value. It claims that PixarBio made misleading statements about its activities, its aims, and the use of funds from its offerings, in violation of the Securities Exchange Act of 1934. In January 2017, the SEC temporarily halted trading in PixarBio’s stock and may file an enforcement action against it. 

"BT" and BT Group Logo on Side of Building

BT Group hinted in its public Securities and Exchange Commission (SEC) filings at problems at its Italian branch. However, the complaint for this class action alleges that the company did not disclose the problems with financial reporting at BT Italy, in violation of the Securities Exchange Act of 1934. On January 24, 2017, the company issued a press release stating that “the extent and complexity of inappropriate behavior …  were far greater than previously identified” and included “improper accounting practices and a complex set of improper sales, purchase, factoring and leasing transactions.” It took a write-down of roughly $700 million.

Western Union Sign

In January 2017, the Western Union Company agreed to pay $586 million to settle with customers defrauded in transactions with the company. According to the settlement with federal regulators, it had also failed to institute anti-money laundering measures. But the complaint for this securities class action claims that the company still did not take effective steps to remedy the situation. This securities class action alleges that the company did not disclose its criminal activity and lack of compliance to the public, in violation of the Securities Exchange Act of 1934, and that it is therefore responsible for stock losses as the truth came out. 

State Street Building

This securities class action is built on two other actions involving fraudulent charges or overcharges of customers, for commissions and SWIFT messages, by State Street Corporation which ultimately added up to hundreds of millions of dollars. The complaint alleges that the company violated the Securities Exchange Act of 1934 in its publication of revenues and liabilities during the class period, because the supposed “revenues” included these false charges, which would become a liability the company would have to pay back when the truth emerged.

Gigamon Equipment and Logo

This securities class action claims that Gigamon, Inc. overestimated its future earnings and did not disclose to investors that a major customer was deferring purchases, in violation of the Securities Exchange Act of 1934. However, the complaint quotes confidential witnesses who say that the company set unrealistic targets for its sales people and suggests that the officers were incapable of making reasonable projections.

Egalet Manufacturing Process

Egalet Corporation was developing a new drug, which was special not for its medical properties but for its abuse-deterrent characteristics. However, the complaint claims that the company knew all along that its was unlikely to get FDA approval of intranasal abuse-deterrent labeling, because a competitor drug had already been granted a three-year term of exclusivity for that characteristic. The complaint says that the company’s optimistic statements thus violated the Securities Exchange Act of 1934.

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