Law Firm Files Class Action Suit against St. Jude Medical

Lerach Coughlin Stoia Geller Rudman & Robbins LLP Files Class Action Suit against St. Jude Medical, Inc.

 

SAN DIEGO--(BUSINESS WIRE)--May 2, 2006--Lerach Coughlin Stoia Geller Rudman & Robbins LLP ("Lerach Coughlin") (http://www.lerachlaw.com/cases/stjude/) today announced that a class action has been commenced in the United States District Court for the District of Minnesota on behalf of purchasers of St. Jude Medical, Inc. ("St. Jude") (NYSE:STJ) common stock during the period between January 25, 2006 and April 4, 2006 (the "Class Period").

 

If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from April 10, 2006. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiff's counsel, William Lerach or Darren Robbins of Lerach Coughlin at 800/449-4900 or 619/231-1058, or via e-mail at wsl@lerachlaw.com. If you are a member of this class, you can view a copy of the complaint as filed or join this class action online at http://www.lerachlaw.com/cases/stjude/. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.

 

The complaint charges St. Jude and certain of its officers and directors with violations of the Securities Exchange Act of 1934. St. Jude, together with its subsidiaries, engages in the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiac surgery, cardiology and atrial fibrillation therapy areas and implantable neuromodulation devices.

 

The complaint alleges that during the Class Period, defendants issued materially false and misleading statements regarding the Company's prospects for growth in market share for its core product, implantable cardioverter defibrillators ("ICDs"). St. Jude temporarily gained market share due to a disruption in its rival Guidant's business. Thereafter, defendants issued materially false and misleading statements regarding the Company's ability to maintain its temporary gain in market share and even increase it going forward. As a result of defendants' false statements, St. Jude's stock traded at artificially inflated prices during the Class Period, allowing its top officers to reap $14.5 million in insider trading proceeds and to receive substantial bonuses.

 

On April 4, 2006, after the market closed, the Company announced preliminary results for the first quarter ended March 31, 2006, stating that first quarter results were impacted by lower than expected revenues from ICDs, which were expected to be below the Company's guidance.

 

On this news, the Company's stock fell $5.05 per share to close at $36.25 per share on April 5, 2006, a drop of 12%, the largest stock decline suffered by St. Jude in more than 6 years.

 

According to the complaint, the true facts, which were known by the defendants but concealed from the investing public during the Class Period, were as follows: (a) while St. Jude had gained market share due to problems experienced by ICD market leader Guidant, this growth was not sustainable; (b) given the increased volatility in the ICD market, the Company had no reasonable basis to make projections about its share in the ICD market; and (c) the Company was not gaining market share from Guidant and in fact would not be able to maintain the share it temporarily gained from Guidant due to the disruption in Guidant's business.

 

Plaintiff seeks to recover damages on behalf of all purchasers of St. Jude common stock during the Class Period (the "Class"). The plaintiff is represented by Lerach Coughlin, which has expertise in prosecuting investor class actions and extensive experience in actions involving financial fraud.

 

Lerach Coughlin, a 180-lawyer firm with offices in San Diego, San Francisco, Los Angeles, New York, Boca Raton, Washington, D.C., Houston, Philadelphia and Seattle, is active in major litigations pending in federal and state courts throughout the United States and has taken a leading role in many important actions on behalf of defrauded investors, consumers, and companies, as well as victims of human rights violations. Lerach Coughlin lawyers have been responsible for more than $20 billion in aggregate recoveries. The Lerach Coughlin Web site (http://www.lerachlaw.com) has more information about the firm.

 

Contacts
Lerach Coughlin Stoia Geller Rudman & Robbins LLP
William Lerach, 800-449-4900
wsl@lerachlaw.com