Robbins Arroyo LLP: Psychemedics Corporation (PMD) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Psychemedics Corporation (NASDAQCM: PMD) in the U.S. District Court for the District of Massachusetts. The complaint is brought on behalf of all purchasers of Psychemedics securities between February 28, 2014 and January 30, 2017, for alleged violations of the Securities Exchange Act of 1934 by Psychemedics’ officers and directors. Psychemedics provides testing services for the detection of drugs of abuse through the analysis of hair samples in the United States and internationally.
Psychemedics Accused of Engaging in Anticompetitive Conduct
According to the complaint, Psychemedics submitted a series of filings with the U.S. Securities and Exchange Commission in which it differentiated itself from its competitors, emphasizing the superior results the company obtains through its use of its unique patented extraction method in combination with its immunoassay screen cleared by the U.S. Food and Drug Administration. On April 26, 2016, Psychemedics issued a news release announcing that the company was excited about a significant business opportunity in Brazil and that it was “aggressively competing for a share of this potential business.” However, the complaint alleges that Psychemedics officials failed to disclose that the company engaged in anticompetitive conduct through its affiliate Psychemedics Brasil Exames Toxicologicos Ltda. (“Psychemedics Brasil”) to maintain a monopoly over the Brazilian market in violation of the law and that, in turn, Psychemedics lacked effective internal controls over financial reporting.
On January 31, 2017, Bloomberg reported that a Brazilian judge ordered Psychemedics Brasil to compensate Omega Laboratories, Inc. USA for losses caused by anticompetitive practices. Bloomberg also revealed that the practices were allegedly used for the purpose of “preventing other companies from accessing (the) market,” and that Psychemedics Brasil may be further investigated by Brazil’s Administrative Council for Economic Defense for engaging in “cartel practices.” On this news, Psychemedics’ stock fell $6.75 per share, or 26.35%, to close at $18.87 per share on January 31, 2017.
Psychemedics Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.