BOSTON – A biopharmaceutical company is facing allegations that it carried out a scheme designed to deceive investors and persuade investors to purchase overpriced securities.
John J. Gerneth filed a complaint on behalf of all others similarly situated on June 9 in the U.S. District Court for the District of Massachusetts against Chiasma Inc. and its executives, Mark W. Leuchtenberger and Mark J. Fitzpatrick alleging violation of federal securities laws.
According to the complaint, the plaintiff alleges that he, along with other investors that owned stock in Chiasma, suffered significant financial losses and damages when Chiasma's share price fell 63.13 percent on April 18. This happened when the Food and Drug Administration issued a complete response letter denying approval for Mycapssa, Chiasma's lead product, the suit states.
The plaintiff holds Chiasma Inc., Leuchtenberger and Fitzpatrick responsible because the defendants allegedly misled investors into thinking that that the drug would be approved for use, allegedly making false claims that were formulated so that rational investors would believe that the FDA would approve the drug.
The plaintiff requests a trial by jury and seeks a determination that the action is a proper class action, compensatory damages in favor of the plaintiff and all class members as well as reasonable costs and expenses incurred, and any other relief the court deems just and proper. He is represented by Jason M. Leviton and Steven Harte of Block & Leviton LLP in Boston; Jeremy A. Lieberman, J. Alexander Hood II and Marc C. Gorrie of Pomerantz LLP in New York; Patrick V. Dahlstrom of Pomerantz LLP in Chicago; and Peretz Bronstein of Bronstein, Gewirtz & Grossman in New York.
U.S. District Court for the District of Massachusetts Case number 1:16-cv-11082-DJC