The Brualdi Law Firm Announces Class Action Lawsuit Against ArthroCare Corp.

NEW YORK, Aug. 1, 2008 (LAWFUEL) — The Brualdi Law Firm, P.C.
announces that a lawsuit has been commenced in the United States
District Court for the Western District of Texas on behalf of
purchasers of ArthroCare, Corp. (“ArthroCare” or “the Company”)
(Nasdaq:ARTC) common stock during the period between January 24, 2008
through July 18, 2008 (the “Class Period”) and all persons or entities
who purchased call options or sold put options in ArthroCare common
stock from October 27, 2006 through July 18, 2008 (the “Options Holders
Class Period”) for violation of the federal securities laws.

No class has yet been certified in the above action. Until a class is
certified, you are not represented by counsel unless you retain one. If
you purchased ArthroCare common stock during the period described
above, you have certain rights, and have until no later than September
23, 2008 in which to move for Lead Plaintiff status. Any member of the
purported class may move the Court to serve as lead plaintiff through
counsel of their choice, or may choose to do nothing and remain an
absent class member.

To be a member of the class you need not take any action at this time,
and you may retain counsel of your choice. If you wish to discuss this
action or have any questions concerning this Notice or your rights or
interests with respect to these matters, please contact Sue Lee at The
Brualdi Law Firm, P.C. 29 Broadway, Suite 2400, New York, New York
10006, by telephone toll free at (877) 495-1187 or (212) 952-0602, by
email to [email protected] or visit our website at

The complaint alleges that before the market opened on Monday, July 21,
2008, ArthroCare announced that it would be restating its previously
reported financial results from the third quarter 2006 through the
first quarter 2008 because it improperly recognized revenue from
DiscoCare, Inc., State of the Art Medical Products, Boracchia &
Associates and Clinical Technology, Inc. As a result, ArthroCare
indicated that it expects ArthroCare’s reported revenue in 2006 will be
reduced by $4 million to $7 million, and that for 2007, reported
revenue will be reduced by $20 million to $25 million. Further,
ArthroCare revealed on July 21, 2008 that reported revenue for the
first quarter of 2008 will be reduced by $2 million to $5 million, and
that “the restatement will result in material reductions in operating
income and net income for the annual and quarterly periods being
restated.” Upon that announcement, shares of ArthroCare plummeted from
its close of $40.03 on Friday, July 18, 2008 to a close of $23.21 on
July 21, 2008, the next day of trading, on extraordinary volume — a
drop of over 42%.

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