The U.S. Food and Drug Administration on Friday said it has deemed Guidant’s latest action a Class I recall, which is reserved for cases when there is “a reasonable probability that the malfunctioning device will cause serious adverse health consequences or death.”
COLCHESTER, Conn., July 22 — Scott+Scott, LLC, (http://www.scott-scott.com ) which filed the initial securities case in the United States District Court for the Southern District of Indiana against Guidant Corporation (NYSE: GDT – News) due to its recent equipment failure disasters, has come under a Senate inquiry and reports of insider trading are surfacing. On Thursday, it was reported that Senator Charles Grassley asked the Food and Drug Administration to examine the safety of implantable heart defibrillators. It was stated that this was in response to the New England Journal of Medicine’s article that Guidant continued to sell defective product even after serious malfunctions were reported.
Moreover, the Wall Street Journal reported on Thursday 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. The article reported that Beverly Lorell, chief technical and medical officer, sold 23,300 shares on May 17 and 22,667 shares on May 23 for a total of $3.39 million. Her stock was sold in the range from $73.55 to $74.00. It was reported that other Guidant executives may have sold as well–over $63 million.
Guidant disclosed on July 18 that it was recalling nine defibrillator device models distributed between 1997 and 2000. The Company reports that as many as 28,000 devices must be recalled. The pending securities fraud actions are on behalf of investors who purchased Guidant securities between December 15, 2004 and January 23, 2005. Scott + Scott cautions, however, that the class period could be taken back to 2001 and therefore, all purchasers of Guidant securities are welcome to inquire. For a summary of the claims against the defendants, see Scott+Scott’s prior notices at http://biz.yahoo.com/prnews/050624/nyf078.html?.v=12
and http://biz.yahoo.com/prnews/050706/nyw155.html?.v=16.
Additionally, many people with implanted Guidant devices have contacted the firm. Any person or a decedent’s survivor subject to this situation may contact Scott+Scott directly.
On June 16, 2005, Guidant recalled 50,000 faulty defibrillators due to malfunctions in six different devices. Then, on June 24, Guidant recalled an additional five devices.
Johnson &J ohnson management stated that its impending merger with Guidant may be delayed due to these massive recalls and FDA involvement. On July 18, Guidant further warned as to the safety of nine pacemaker devices produced/implanted from 1997 to 2000.
If you purchased Guidant securities between December 15, 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.
If you would like information about Scott+Scott’s complaint against Guidant or would like to discuss this action with an attorney, please contact the firm at 800/332-2259 during office hours. You may also contact attorney Neil Rothstein at nrothstein@scott-scott.com (or cell phone 619/251-0887) or attorney Amy K. Saba at asaba@scott-scott.com (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.
Other cases recently filed and/or under investigation include: Possis Medical, Tempur-Pedic International, Dreamworks Animation, Reinsurance Corporation of America, Unisys and more.
