Robbins Arroyo LLP: Lannett Company, Inc. (LCI) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a class action complaint was filed against Lannett Company, Inc. (NYSE: LCI) in the U.S. District Court for the Eastern District of Pennsylvania. The complaint is brought on behalf of all purchasers of Lannett securities between September 12, 2013 and November 3, 2016, for alleged violations of the Securities Exchange Act of 1934 by Lannett’s officers and directors. Lannett develops, manufactures, packages, markets, and distributes generic versions of brand pharmaceutical products in the United States.
Lannett Accused of Unjustifiably Touting Its Competitive Advantage
According to the complaint, in a series of filings with the U.S. Securities and Exchange Commission, Lannett touted its business prospects, stating that certain company driven implementations “have improved [Lannett's] competitive cost position over the past five years.” Lannett officials also attested to the accuracy of the financial reporting, the disclosure of any material changes to the company’s internal controls over financial reporting, and the disclosure of all fraud. However, the complaint alleges that Lannett officials failed to disclose that the company’s drug pricing relied on unsustainable methodologies and that Lannett lacked effective internal controls concerning its drug pricing methodologies.
On July 16, 2014, Lannett revealed in a press release that it had received interrogatories and a subpoena from the State of Connecticut Office of the Attorney General concerning its investigation into pricing of digoxin. Then, on November 6, 2014, the company revealed in its Form 10-Q that its Senior Vice President of Sales and Marketing was served with a grand jury subpoena relating to a federal investigation involving possible violations of the Sherman Act. On November 3, 2016, Bloomberg published an article revealing that in connection with the U.S. Department of Justice’s investigations into Lannett and other companies, U.S. prosecutors may file criminal charges by the end of 2016 for suspected price collusion. The article detailed that the grand jury probe is focusing on whether executives agreed with one another to raise prices. On this news, Lannett’s stock fell $6.25 per share, or approximately 27%, to close at $17.25 per share on November 3, 2016.
Lannett 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.
Send This Post