Securities Fraud Suit Against Amgen Can Proceed

The US Supreme Court handed Amgen a setback by ruling that shareholders can proceed with a lawsuit accusing the biotech of providing misinformation between 2004 and 2007 about its best-selling Aranesp and Epogen anemia treatments in order to boost its stock price. A federal appeals court last fall also sided with a Connecticut pension fund that is pressing a class-action complaint. As we wrote previously, the 9th US Circuit Court of Appeals last year upheld a lower court ruling that an ‘element of reliance’ was common to all investors and ‘fraud on the market’ had been committed. The court ruled that, to win class certification, the fund must plausibly allege, but does not have to prove, the misrepresentations were material (here is the ruling). In a 6-to-3 vote, the Supreme Court decided that investors can pursue a class-action lawsuit without first proving that they relied on misrepresentations. “Proof of materiality is not a prerequisite to certification of a securities fraud class action seeking money damages for alleged violations,” Justice Ruth Bader Ginsberg wrote for the majority. The dissenters – Anthony Kennedy, Clarence Thomas and Antonin Scalia – countered that the burden is on the plaintiff (here is the ruling). Here is the background: The lawsuit was filed in May 2007 after an FDA advisory committee recommended added warnings about the risk of death, blood clots and other side effects should be added to product labeling, and also ...
Source: Pharmalot - Category: Pharma Commentators Authors: Tags: Uncategorized Amgen Aranesp Class-Action Lawsuit Epogen Securities Fraud US Supreme Court Source Type: blogs