Amid Alleged Pacemaker Defects, St. Jude Medical’s Executives Under Investigation
Shareholder and consumer rights law firm Schubert Jonckheer & Kolbe LLP has launched an investigation into whether certain officers and directors of St. Jude Medical, Inc. (NYSE: STJ) breached their fiduciary duties to St. Jude and its shareholders.
A class action brought on behalf of purchasers or St. Jude shares during the period February 5, 2010 to November 20, 2012, pending in the United States District Court for the District of Minnesota, seeks to obtain damages from St. Jude. The District Court denied St. Jude's motion to dismiss the case, and the case is now proceeding toward trial.
The class action concerns public statements and material omissions made by key St. Jude executives, including St. Jude’s President and Chairman of the Board, Daniel J. Starks, regarding the safety and reliability of two generations of its leads, which were used to connect pacemakers or implantable cardioverter defibrillators to patients’ hearts. The defibrillation leads at issue included St. Jude’s Riata, Riata ST, and Riata St Optim (later renamed “Durata”). The pacing leads at issue included the Quick Site, Quick Flex, QuickFlex µ and Quartet models.
Defibrillation and pacing leads provide “life-supporting or life-sustaining therapy, and thus are classified as Class III medical devices by the Food and Drug Administration per 21 C.F.R. § 860.93. As such, these leads are subject to the most stringent regulatory controls, including premarket approval and post-market surveillance. See 21 C.F.R. § 360.3(c)(2).
The class action alleges that defendants failed to inform the public that St. Jude’s quality controls of over the design, production and post-market monitoring of its leads were chronically deficient and were the subject of scrutiny and repeated criticism from the FDA. The class action alleges that the defendants made actionably misleading statements and omissions of material facts regarding these issues in its Form 10-K annual reports for 2009, 2010 and 2011, and quarterly reports for the first and second quarters of 2012, as well as in an investor call and certain “Dear Doctor” advisory letters issued during the February 2010 through November 20, 2012 period.
The Schubert Law Firm's investigation concerns whether current St. Jude shareholders may be able to bring derivative claims on behalf of St. Jude itself against certain of its officers and directors for their actions in causing St. Jude to incur liability in the class action.
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