Spectranetics Settles Class Action Suit for $8.5M
COLORADO SPRINGS, Colo., June 22, 2010 — Medical laser maker Spectranetics Corp. announced Tuesday that it has settled a pending class action suit for $8.5 million in cash and has also settled a stockholder derivatives case for payment of attorneys' fees.
The class action suit was filed in August 2009 on behalf of shareholders who acquired Spectranetics stock between March 16, 2007, and Sept. 4, 2008. The suit alleged that the company and top executives inflated the company's financial results by improperly marketing, promoting and testing its products and the products of third parties for unapproved uses and making payments to medical personnel in connection with those uses; withholding data from the Food and Drug Administration (FDA), and failing to effectively implement regulatory compliance controls and adequate internal and financial controls.
Under the proposed settlement, the claims against Spectranetics and its officers and directors will be dismissed with prejudice and released in exchange for a cash payment of $8.5 million to be funded by Spectranetics' insurers. The proposed settlement is subject to various conditions, including approval by the US District Court for the District of Colorado following notice to members of the class.
Under terms of the proposed derivative settlement, plaintiffs will dismiss the stockholder derivative case with prejudice and release their claims in exchange for formalizing certain corporate governance procedures and paying attorneys' fees of $350,000. As with the class action settlement, the proposed settlement will be funded by Spectranetics' insurers and remains subject to court approval.
"I'm pleased that, upon approval by the court, we can put the securities class action lawsuit and stockholder derivative case behind us and avoid the distraction and cost associated with protracted litigation," said Emile J. Geisenheimer, Spectranetics president, CEO and board chairman.
As part of the settlements, the company and the individual defendants continue to deny any liability or wrongdoing under the securities laws, Spectranetics said.
The company said it also recently became aware that three Spectranetics stockholders filed an individual lawsuit on May 28, 2010, in the US District Court for the District of Colorado asserting various federal and state claims arising out of the same facts alleged in the securities class action. Two of the three stockholders who brought this case had previously moved unsuccessfully to be appointed as lead plaintiff in the securities class action where they claimed a loss of $1.27 million. Spectranetics said it intends to defend this lawsuit "vigorously."
For more information, visit: www.spectranetics.com
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