Securities Fraud Case First Filed By Scott + Scott Client Against Guidant Gets A Shock As FDA Refuses Freedom of Information Act Request And Gives Green Light To Put Them Back in Market
FDA Denies Request For Information Regarding Faulty Defibrillators: Electrical Flaws Would Cause Short Circuit In Device
COLCHESTER, Conn., — Scott + Scott, LLC, (http://www.scott-scott.com ) which filed the first securities case in the United States District Court for the Southern District of Indiana against Guidant Corporation (NYSE: GDT ) due to its “recent” catastrophic equipment failure and significantly belated notification to physicians, was surprised to learn that a New York Times Freedom of Information Act Request (“FOIA”) to the Food and Drug Administration (“FDA”) was denied as such information was deemed to be “corporate trade secrets.” In the article written by Barry Meier on August 6, 2005, the information sought by the Times concerned the Guidant Ventak Prizm 2 DR, which the Company produced thousands of from 2000-2002. Some of these devices had electrical flaws that caused them to short-circuit. While Guidant claims to have discovered the problem in 2002, Scott + Scott has information that it may have known this issue existed in 2001, thus making the hidden truth, known to defendants, more significant (more information can be provided by attorney Neil Rothstein at the contact info below).
Many people with implanted Guidant devices have contacted the firm. Any person affected by a faulty Guidant device or a decedent’s survivor may contact Scott + Scott directly.
As previously disclosed by Scott + Scott, a Senate inquiry led by Senator Charles E. Grassley (R-Iowa), Chairman of the Senate Finance Committee, has been ongoing and the Senator questioned why such information was not being disclosed. The Medicines and Healthcare products Regulatory Agency (MHRA) is making urgent inquiries into the product problems at Guidant and their significance upon United Kingdom patients.
If you would like additional information, please contact the firm at 800/404-7770 before noon EST and thereafter, 800/332-2259 during office hours. You may also contact attorney Neil Rothstein directly at [email protected] (or cell phone 619/251-0887) or attorney Amy K. Saba at [email protected] (800/332-2259). Scott + Scott has offices in Connecticut, Ohio and California. The firm specializes in complex litigation including securities fraud and represents foundations, individuals, corporations and pension funds worldwide.
Fred McCoy, president of Guidant’s Cardiac Rhythm Management division (according to the transcript of an interview conducted by the Star Tribune, a Minneapolis newspaper) called Guidant “A company of startlingly high reliability.” McCoy said the company has a “well-developed” quality system and a dedicated group of engineers and scientists who relentlessly pursue improvement. Defibrillators and pacemakers, he said, aspire to a 99% reliability level over the course of several years, and tens of thousands of people are alive today because of these therapies. Yet Scott + Scott’s investigation has yielded information that the Guidant failure rate of 1% is based only upon the number of devices returned to the Company for inspection. According to a source, results from internal, unpublished post-market clinical trials show a failure rate that suggests 8% is closer to the truth. This is due to the fact that most devices are not returned to Guidant when a patient dies and that the elderly who die rarely undergo an autopsy, facts ignored by the Company when information was provided to the public.
Insider trading is now calculated at over $60 million. Moreover, the Wall Street Journal has reported that the chief medical officer of Guidant sold more than $3 million of her shares in May, just prior to the Company’s announcement to doctors of malfunctions in their defibrillators. This comes near the eve of Johnson & Johnson’s buyout of Guidant for about $25 billion. On July 19, 2005, Johnson & Johnson gave little guidance on the status of its acquisition of Guidant during a conference call. Johnson & Johnson management later said that the scheduled merger with Guidant might be delayed because of issues relating to that company’s recent product recalls. The deal is slated to close during the third quarter, but Johnson & Johnson recently said that the recalls may slow that schedule, and no longer promises a third quarter close. Further, the insider trading at Guidant indicates that those who did trade are not waiting for the buyout.
On June 16, 2005, Guidant recalled 50,000 faulty defibrillators due to malfunctions in six different devices purportedly in response to the New England Journal of Medicine’s article that Guidant continued to sell a defective product even after serious malfunctions were reported. Various Guidant products continued being recalled on June 16 and on July 18, new warnings were issued and an additional 28,000 devices were to be recalled. Scott + Scott, LLC’s independent investigation of this matter is ongoing and the possibility of additional information is likely.
If you purchased Guidant securities between July 29, 2004, and January 23, 2005, or at any other time and have questions, please contact Scott + Scott to learn your legal rights, to discuss the matter with an attorney and to discover the many advantages of Scott + Scott’s representation. There is no charge or cost.