MINNEAPOLIS, March 10, 2009 (GLOBE NEWSWIRE) -- Zimmerman Reed today announced that shareholder claims against Boston Scientific Company (NYSE:BSX) will be allowed to proceed as a class action. On March 10, 2009 Judge Douglas Woodlock, United States District Court for the District of Massachusetts, issued a memorandum certifying a shareholder class of all persons who purchased or otherwise acquired Boston Scientific equity securities between November 20, 2003 and July 15, 2004 (the "Class Period"). At the core of the lawsuit are allegations concerning known manufacturing defects with Boston Scientific's flagship stent product, TAXUS drug-eluting stent. In their lawsuit, the investors allege that Boston Scientific violated the Securities Exchange Act of 1934 by knowingly withholding material information and making misleading statements concerning TAXUS, which artificially inflated the Company's stock and ultimately caused investor losses. In addition, the investors allege that the Company's top executives engaged in improper insider trading and wrongfully enriched themselves in excess of $332 million by selling their personal holdings.
The case involves allegations that in 2003 and 2004, medical device-manufacturer Boston Scientific misled investors about its TAXUS device. First, Defendants attributed problems-including patient deaths-with its drug-eluting TAXUS stent and Express2 bare metal coronary stent systems to physician error, despite the fact that the Company had previously determined that the problems were attributable to its internal manufacturing processes. Additionally, Plaintiffs allege that, despite knowing the serious risks associated with the manufacturing problems, the Company chose to delay implementing manufacturing changes until after it launched the flawed device onto the U.S. market, to avoid further FDA scrutiny of the Company's application to put TAXUS on the United States market. The problems caught up with the Company when it was forced to recall TAXUS from the U.S. and international markets three times in the summer of 2004. In reaction, the share price dropped 14.3% in the following three trading days.
The Court's Memorandum and Order certifying the Class, and the Consolidated Amended Complaint, are available at www.zimmreed.com/boston-scientific.
The Zimmerman Reed, PLLP website (www.zimmreed.com) has additional information about our firm and cases.