09.04.13
The Shareholders Foundation Inc., a professional organization that helps shareholders keep track of their investment portfolios, has announced that a lawsuit was filed by certain NuVasive shareholders against the spine device company. The suit is in connection with alleged “false and misleading” statements made between Oct. 22, 2008 and July 30, 2013 (the class period).
According to the complaint, certain NuVasive officers made false and misleading statements and failed to disclose information regarding the company’s operation, and business prospects. Specifically, the complaint alleges that throughout the class period the company and certain of its officers disseminated false and misleading statements and/or failed to disclose that NuVasive did not maintain an effective compliance program as set forth by the U.S. Department of Health and Human Services (HHS). Because the company lacked an effective compliance program, NuVasive allegedly failed to detect that the company had been violating the False Claims Act by submitting false claims to Medicare and Medicaid. Shareholders involved in the lawsuit believe that it is due to these reasons that NuVasive shares traded at artificially inflated prices during the class period.
On July 30, NuVasive disclosed in a regulatory filing that the company was being investigated by the HHS and had received a subpoena requesting documents for the period January 2007 through April 2013. The subpoenaed documents relate to the agency’s investigation into possible false claims submitted by NuVasive to Medicare and Medicaid. The day after this disclosure, NuVasive shares dropped 12 percent, or $3.28 per share, to close at $22.84 on July 31.
This suit follows hot on the heels of a civil lawsuit filed against NuVasive in January by an orthopedic surgeon, Andrew Cappuccino, M.D., who claimed the company failed to pay a $60,000 “milestone payment” connected with a U.S. Food and Drug Administration approval of a medical device used in spinal procedures. The product was developed by Cervitech, Inc., a company in which Cappuccino was a prime investor and which was acquired by NuVasive in 2009. The relationship between Cappuccino and Nuvasive has been bitter for months, with suits flying back and forth between the company, the doctor, and several other physicians and former NuVasive representatives who now work for competitor Lanx Inc. The suits mainly concern breaches of agreements and IP disputes.
According to the complaint, certain NuVasive officers made false and misleading statements and failed to disclose information regarding the company’s operation, and business prospects. Specifically, the complaint alleges that throughout the class period the company and certain of its officers disseminated false and misleading statements and/or failed to disclose that NuVasive did not maintain an effective compliance program as set forth by the U.S. Department of Health and Human Services (HHS). Because the company lacked an effective compliance program, NuVasive allegedly failed to detect that the company had been violating the False Claims Act by submitting false claims to Medicare and Medicaid. Shareholders involved in the lawsuit believe that it is due to these reasons that NuVasive shares traded at artificially inflated prices during the class period.
On July 30, NuVasive disclosed in a regulatory filing that the company was being investigated by the HHS and had received a subpoena requesting documents for the period January 2007 through April 2013. The subpoenaed documents relate to the agency’s investigation into possible false claims submitted by NuVasive to Medicare and Medicaid. The day after this disclosure, NuVasive shares dropped 12 percent, or $3.28 per share, to close at $22.84 on July 31.
This suit follows hot on the heels of a civil lawsuit filed against NuVasive in January by an orthopedic surgeon, Andrew Cappuccino, M.D., who claimed the company failed to pay a $60,000 “milestone payment” connected with a U.S. Food and Drug Administration approval of a medical device used in spinal procedures. The product was developed by Cervitech, Inc., a company in which Cappuccino was a prime investor and which was acquired by NuVasive in 2009. The relationship between Cappuccino and Nuvasive has been bitter for months, with suits flying back and forth between the company, the doctor, and several other physicians and former NuVasive representatives who now work for competitor Lanx Inc. The suits mainly concern breaches of agreements and IP disputes.