On Friday an order granting preliminary approval of class action settlement was issued in the Southern District of California in an action against RA Medical Systems, Inc. and the company’s board of directors.
The case was regarding securities violations concerning the filing of form 424B4. The form was alleged to be deceptive as it did not account for limitations in the hiring and training of sales staff as well as production difficulties known to the company prior to the public offering. These difficulties resulted in a 77% drop in the price of stock from the initial public offering. The case was initially filed in June of 2019 as a class action for all investors harmed by the incomplete form.
In the motion for preliminary approval, the court acknowledged for the sake of the settlement that those affected by the case could be certified as a class, including numerousity, commonality of questions of law and fact, and typicality of the lead plaintiff’s position. The order also dismissed a motion to dismiss the case for failure to state a claim, acknowledging that the settlement conceded this issue. Finally, the court set up a formal schedule for retention of a claims administrator, giving notice to potential class members for choice of inclusion in the settlement or opting out, and a date for approval of the formal settlement.
Plaintiffs are represented by Glancy Prongay & Murray. Defendants are represented by Wilson Sonsini Goodrich & Rosati and Latham & Watkins.
