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Regulus Therapeutics, Inc. seemed to have developed a promising new drug that cut treatment time for hepatitis C in half. During the class period, Regulus claimed that RG-101 was safe and well-tolerated, even though two patients had come down with serious cases of jaundice. But the complaint for this class action claims that the company denied that the drug was responsible, even though it knew better, in violation of the Securities Exchange Act of 1934.

DaVita Dialysis Facility

Perhaps the most startling detail of this securities class action is that 75% of DaVita, Inc.’s net income was dependent on an illicit “kickback” relationship. The complaint says DaVita made large donations to the nonprofit American Kidney Fund (AKF); the AKF used the funds to pay for commercial insurance policies for DaVita’s patients; then DaVita billed the commercial insurers a total amount that was much more than it had donated to AKF. However, the complaint’s main point is that the company’s failure to disclose this relationship and its “steering” practices were violations of the Securities Exchange Act of 1934.

Living Room with RH Modern Furniture

Launching a new furniture line takes time, but the complaint for this securities class action claims that RH, Inc. was nowhere near prepared for the launch of its RH Modern initiative. The complaint alleges that the launch was a “debacle” because of “a near complete lack of inventory.” Concealing its lack of preparedness, the complaint claims, was a violation of the Securities Exchange Act of 1934. 

Psychemedics Hair Testing

Facing a mature market in the US, Psychemedics Corporation looked to the Brazilian market for growth. But according to the complaint for this securities class action, it ruined that possibility by engaging in illegal, anti-competitive behavior in collusion with another company. The complaint says that the two companies entered into an agreement ensuring that Psychomedics Brazil would receive exclusive contracts with hair sample collection points and Omega Brazil would not increase its share of the Brazilian market, despite the fact that Omega’s services were cheaper. Concealing this illegal activity from investors, the complaint says, was a violation of the Securities Exchange Act of 1934.

Streamline Therapeutics Logo

Stemline’s Therapeutics, Inc. had previously misleadingly edited some patient anecdotes about its new drug in its pitch to investors, says the complaint for this securities class action, but it much more seriously misled the public in early 2017, in not reporting a death from known side effects, in violation of both the Securities Act of 1933 and the Securities Exchange Act of 1934.

Meeting Stage with Aratana Logo on Back Wall

Pet medicines too require Food and Drug Administration (FDA) approval. The complaint for this securities class action claims that Aratana Therapeutics was unready to launch a new drug vital to the financial health of the company. The complaint says it did not have manufacturing facilities or FDA approval of them and so could not be ready as projected, but the company hid this in violation of the Securities Exchange Act of 1934.

Kitov Logo

According to the complaint for this class action, Kitov Pharmaceuticals Holdings, Inc. falsified data from its Phase 3 trials, with the resulting inflated stock prices allowing a successful initial public offering (IPO) and secondary public offering (SPO) and providing financial benefits to some company officers. The plan was exposed when the Israeli Securities Authority arrested the company’s CEO. The complaint says that the false statements were violations of Securities Exchange Act of 1934 and caused losses to investors.

Different Currencies Listed on Trading Board

With its new “No Dealing Desk” (NDD) model, FXCM, Inc. (now Global Brokerage, Inc.) claimed to trade for customers with no conflicts of interest and no stake in the trades. The reality, the complaint for this class action says, was very different, with FXCM favoring a secretly related company, Effex, that kicked back to it 70% of its profits. According to the complaint, with its claim to 70% of the Effex’s profits, the company should have consolidated Effex’s interests with its own or at least disclosed the nature of its relationship and the profits it was earning from Effex. Not doing so, the complaint says, makes the company’s financial statements during the class period false and misleading, in violation of the Securities Exchange Act of 1934.

Under Armour Shirt

Under Armour can be proud of its spectacular growth—twenty-six consecutive quarters between 2010 and 2016 with an annual growth rate of at least 20%. Yet when its “brand heat” began to wane, the complaint for this class action says, the company tried to hide the fact and even issued bonds with misleading information in the Registration Statement. The complaint lays out these actions as violation of the Securities Exchange Act of 1934 and the Securities Act of 1933.

USANA Supplements

China prohibits multi-level marketing (MLM), so when MLM company USANA Health Sciences, Inc. wanted to enter the Chinese market, it needed to modify its business model. According to the complaint for this securities class action, it didn’t actually do so; instead, it engaged in a number of illicit practices, including violations of the Foreign Corrupt Practices Act and Chinese laws, until Chinese officials opened an investigation of the company. None of this, the complaint says, was disclosed to investors, in violation of the Securities Exchange Act of 1934.

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