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Sientra, others sued over alleged false representations to investors

By Robbie Hargett | Dec 16, 2015

SAN FRANCISCO (Legal Newsline) – An Oklahoma public pension system is suing a medical aesthetics company, several of its chief officers, and other involved organizations over alleged false and deceptive representations to investors.

Oklahoma Police Pension & Retirement System (OPPRS), individually and for all others similarly situated, filed a class-action lawsuit Oct. 28 in San Mateo County Superior Court against Sientra, Stifel Nicolaus & Co., Leerink Partners, William Blair & Co., et al., alleging violations of the Securities Act of 1933.

According to the compaint, OPPRS acquired common stock of Sientra, whose primary products are silicone gel breast implants. Sientra's registration statement and prospectus emphasize its role as one of few companies in the U.S. with approval to manufacture and distribute breast implants, according to the suit. Sientra's exclusive manufacturer is Brazil-headquartered Silimed, the largest manufacturer of silicone implants in South America. Sientra purchased Silimed's North American subsidiary in 2007, the suit states.

According to the suit, an audit of Silimed's manufacturing processes revealed contamination in its Rio de Janeiro manufacturing plant.

On Oct. 5, Sientra issued a press released stating that on Oct. 2, the company had learned that Brazilian regulatory agencies were continuing to review Silimed's compliance of good manufacturing practices and temporarily suspended Silimed's manufacturing of all medical devices. The use of all implantable products manufactured by Silimed in Brazil also was suspended by the Brazilian Health Surveillance Agency.

On this news, the suit states, Sientra shares dropped $2.19 per share to close at $8.18, a decline of almost 22 percent, which also represented a decline of almost 63 percent from the company's secondary offering price of $22 per share.

The suit states the defendants knew, but did not disclose to the investing public, that the Silimed plant was not complying with good manufacturing practices, that its manufacturing site was not demonstrating safety, and that Sientra lacked a reasonable basis for statements about the success of its clinical trial outcomes and its manufacturing processes.

OPPRS and others in the class seek compensatory damages, equitable/injunctive relief, attorney fees, and costs of the suit. They are represented by attorneys Shawn A. Williams and David C. Walton of Robbins Geller Rudman & Dowd in San Francisco and San Diego.

The defendant filed Dec. 4 to remove this case from the San Mateo County Superior Court to the San Francisco Division of the Northern District of California because the claims asserted are violations of federal laws.

San Mateo County Superior Court Case number 5:15-CV-05549-EJD

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