Maker of Medical Alert Devices Sued for Securities Violations After Sudden Recall

On Friday, a class action was filed against Boston Scientific Corporation (BSC) by named plaintiff Enrique Jevons. This case, filed in the Eastern District of New York, is a federal securities class action covering all persons who purchased or acquired Boston Scientific securities between April 24, 2019 and November 16, 2020 under an allegation of violation of federal securities law and making materially false statements to investors.

BSC develops medical devices and implants for medical intervention internationally. On April 24, 2019, BSC announced FDA approval of a device called the LOTUS Edge Aortic Valve System. From that period through November 16, 2020, only positive reports regarding the LOTUS product line were released by the company and no negative case studies or patient feedback was provided, the complaint explained. Then, on November 17, the company announced a nationwide recall of the product, stating that the delivery methods were too difficult to maintain and recording a pre-tax loss of $225 million, resulting in a stock price drop of $35.03 per share.

The plaintiffs allege multiple violations of Section 10(b) of the Exchange Act and Rule 10b-5 due to materially false statements and omissions of true facts and violations of the duty of candor in Section 20(a) of the Exchange Act. The named plaintiff is represented by the Pomerantz Law Firm.