MIAMI (Legal Newsline) – ERBA and several of its chief officers are being sued over issuing allegedly false or misleading reports to investors.
Abel M. Brown Jr., individually and for all others similarly situated, filed a class action lawsuit Dec. 1 in the U.S. District Court for the Southern District of Florida against ERBA Diagnostics, Mohan Gopalkrishnan, Ernesina Scala, Sanjiv Suri, and Prakash Patel, alleging violations of the Securities Exchange Act.
ERBA develops, manufactures, and markets diagnostic test kits, or assays, and automated systems used to aid in detecting disease markers, primarily in the areas of autoimmune and infectious diseases, clinical chemistry, hematology, and diabetes testing. ERBA also develops autoimmune reagents and research products for use by research labs and commercial diagnostic manufacturers.
Brown and others in the class purchased ERBA securities between April 14, 2014, and Nov. 23.
The suit states that during this class period, the defendants made false and/or misleading statements and failed to disclose facts about ERBA's business. Specifically, the defendants failed to disclose that ERBA lacked adequate controls over financial reporting, and that its financial statements during the class period were materially false and misleading, according to the suit.
On Nov. 20, after the market was closed to trading, ERBA disclosed that its previously issued financial reports should no longer be relied upon.
Based on this news, ERBA shares fell 30 cents, more than 17 percent, on Nov. 23, damaging Brown and other investors.
Brown and others in the class seek damages, interests, attorney fees, expert fees, and other costs. They are represented by attorneys Jayne A. Goldstein, Jeremy A. Lieberman, J. Alexander Hood, II, Marc C. Gorrie, and Patrick V. Dahlstrom of Pomerantz LLP in Weston, Florida, New York City, and Chicago.
U.S. District Court for the Southern District of Florida Case number 1:15-CV-24425-CMA