CHICAGO (Legal Newsline) - Abbott faces a class action lawsuit by shareholders upset at the loss of stock value following a scandal with its infant formula.
The Pembroke Pines Firefighters & Police Officers Pension Fund sued Abbott and four executives on Aug. 31 in Chicago federal court, alleging the company misled shareholders about its promise to keep infants safe.
The proposed class is all who purchased Abbott stock from Feb. 19, 2021, to June 8, 2022.
"During that time, Abbott engaged in a scheme to maximize revenues and inflate the Company’s stock price while disregarding and then concealing lapses in safety protocols that ultimately were linked to serious infant illnesses and even deaths," the suit says.
In June, the U.S. Food and Drug Administration revealed it had received reports of nine deaths of infants who were fed powdered formula made by Abbott in Sturgis, Mich. Internal Abbott records indicated contamination with the bacteria Cronobacter sakazakii.
When the investigation was announced in February, the stock price fell nearly $4 to $116.79 per share. The facility was shut down, and a recall of products like Similac, Alimentum and EleCare was announced.
By the June news, the company's stock was down to $112.71. Berstein Litowitz and Klausner Kaufman are representing the plaintiff.