PHILADELPHIA (Legal Newsline) - Purchasers of Lannett Company stock are suing after they claim the company violated federal securities laws by disseminating false and misleading statements to the investing public.
David Schaefer claims he and others who purchased or otherwise acquired Lannett securities between Sept. 10, 2013, and July 16 are seeking to recover damages caused by Lannett Company, Arthur P. Bedrosian, Martin P. Galvan and G. Michael Landis, according to a complaint filed Aug. 27 in the U.S. District Court for the Eastern District of Pennsylvania.
Specifically, the complaint alleges that the defendants made false and/or misleading statements and/or failed to disclose that the company was fixing, maintaining and controlling prices of Digoxin in violation of Connecticut antitrust laws.
Lannett was allegedly allocating and dividing customers and territories with competitors relating to the sale of Digoxin in violation of Connecticut antitrust laws.
Schaefer claims the company's anticompetitive practices subjected Lannett to heightened regulatory scrutiny, including possible investigation by the Connecticut Office of the Attorney General and, as a result, Lannett's public statements were materially false and misleading at all relevant times.
"On July 16...the company issued a press released and filed a Form 8-K with the SEC, announcing that the company received interrogatories and a subpoena from the State of Connecticut Office of the Attorney General concerning its investigation into pricing and customer/territorial division of Digoxin," the complaint states.
As a result of this news, Lannett stock fell $8.05, more than 17 percent, according to the suit.
Schaefer claims as a result of the defendants' wrongful acts and omissions, and the "precipitous decline in the market value of the company's securities," he and other class members have suffered significant losses and damages.
"The members of the class are so numerous that joinder of all members is impracticable," the complaint states. "Throughout the class period, Lanett securities were actively traded on the NYSE. While the exact number of class members in unknown to plaintiff at this time and can be ascertained only through discovery, plaintiff believes that there are hundreds or thousands of members in the proposed class."
Schaefer is seeking class certification and compensatory damages with pre- and post-judgment interest. He is being represented by Michael D. Donovan and Noah Axler of Donovan Axler LLC; and Jeremy A. Lieberman, Francis P. McConville and Patrick V. Dahlstrom of Pomerantz LLP.
U.S. District Court for the Eastern District of Pennsylvania case number: 2:14-cv-05008
From Legal Newsline: Kyla Asbury can be reached at email@example.com.