St. Jude Medical Brings Legal Action Against Muddy Waters and MedSec
September 07 2016 - 7:43AM
Business Wire
St. Jude Medical Turns to the Court to Hold
Muddy Waters and MedSec Accountable for their Financially Motivated
False Statements and Scare Tactics Aimed at Patients with Heart
Conditions
St. Jude Medical, Inc. (NYSE:STJ), a global medical device
company, announced today that it has filed a lawsuit against Muddy
Waters Consulting LLC, Muddy Waters Capital LLC, MedSec Holdings,
Ltd., MedSec LLC, and three individual defendants who are
principals in these firms, for false statements, false advertising,
conspiracy and the related manipulation of the public markets in
connection with St. Jude Medical’s implantable cardiac management
devices. With this action, St. Jude Medical seeks to hold these
firms and individuals accountable for their false and misleading
tactics, to set the record straight about the security of its
devices, and to help cardiac patients and their doctors make
informed medical decisions about products that enhance and save
lives every day.
"We felt this lawsuit was the best course of action to make sure
those looking to profit by trying to frighten patients and
caregivers, and by circumventing appropriate and established
channels for raising cybersecurity concerns, do not use this avenue
to do so again,” said Michael T. Rousseau, president and chief
executive officer at St. Jude Medical. "We believe this lawsuit is
critical to the entire medical device ecosystem — from our patients
who have our life saving devices, to the physicians and caregivers
who care for them, to the responsible security researchers who help
improve security, to the long-term St. Jude Medical investors who
incurred losses due to false accusations as part of a wrongful
profit-making scheme."
The lawsuit filed today alleges that Muddy Waters, MedSec and
the other defendants intentionally disseminated false and
misleading information in order to lower the value of St. Jude
Medical’s stock and to wrongfully profit from a drop in share value
through a short-selling scheme. The company’s complaint refers to
the Muddy Waters and MedSec repeated false allegations that began
on August 25, 2016 about St. Jude Medical’s implantable cardiac
devices. As further explained in the company’s complaint, the
defendants’ financially self-interested attempts to mislead doctors
and patients demonstrate a total disregard for the patients whose
lives depend on their cardiac management devices. The complaint
also cites a third-party assessment of the Muddy Waters Report by
University of Michigan researchers who found that “the evidence
does not support their conclusions… [the University of Michigan
researchers] were able to generate the reported conditions without
there being a security issue.” In addition, an electrophysiologist
and cardiologist from the University of Michigan also stated that
“given the significant benefits from home monitoring, patients
should continue to use their prescribed cardiac devices” at this
time.
“We recognize that the cybersecurity landscape is dynamic, which
is why we partner with researchers, agencies, consultants and
others to continually strengthen our security measures currently in
place,” said Phil Ebeling, vice president and chief technology
officer at St. Jude Medical. “We also have processes in place to
encourage anyone with information about the security of our
technology to share it with us so that we can enhance our
technology for the benefit of patients.”
St. Jude Medical devices save and improve lives every day, and
our devices and systems have multiple features to reduce the risk
of cyber security attacks. St. Jude Medical has worked, and will
continue to work, with the Food and Drug Administration, the
Department of Homeland Security and independent researchers to
continually strengthen its security systems in the ever changing
cybersecurity environment.
"Our top priority is to reassure patients, caregivers and
physicians who use our life-saving devices that we are committed to
the security of our products and to ensure patients and their
doctors maintain ongoing access to the proven clinical benefits of
remote monitoring," said Mark Carlson, vice president and chief
medical officer at St. Jude Medical. "We decided to take this
action because of the irresponsible manner in which these groups
have acted."
The lawsuit was filed in the United States District Court for
the District of Minnesota. This case follows St. Jude Medical's
recent statements that refuted claims by Muddy Waters and MedSec
regarding the safety and security of our pacemakers and
defibrillators.
About St. Jude Medical
St. Jude Medical is a leading global medical device manufacturer
and is dedicated to transforming the treatment of some of the
world's most expensive epidemic diseases. The company does this by
developing cost-effective medical technologies that save and
improve lives of patients around the world.
Headquartered in St. Paul, Minn., St. Jude Medical employs
approximately 18,000 people worldwide and has five major areas of
focus that include heart failure, atrial fibrillation,
neuromodulation, traditional cardiac rhythm management and
cardiovascular. For more information, please visit sjm.com or
follow us on Twitter @SJM_Media.
Forward-Looking Statements
This news release contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
that involve risks and uncertainties. Such forward-looking
statements include the expectations, plans and prospects for the
company, including potential clinical successes, reimbursement
strategies, anticipated regulatory approvals and future product
launches, and projected revenues, margins, earnings and market
shares. The statements made by the company are based upon
management’s current expectations and are subject to certain risks
and uncertainties that could cause actual results to differ
materially from those described in the forward-looking statements.
These risks and uncertainties include market conditions and other
factors beyond the company’s control and the risk factors and other
cautionary statements described in the company’s filings with the
SEC, including those described in the Risk Factors and Cautionary
Statements sections of the company’s Annual Report on Form 10-K for
the fiscal year ended January 2, 2016 and Quarterly Report on Form
10-Q for the fiscal quarter ended July 2, 2016. The company does
not intend to update these statements and undertakes no duty to any
person to provide any such update under any circumstance.
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version on businesswire.com: http://www.businesswire.com/news/home/20160907005903/en/
St. Jude Medical, Inc.J.C. Weigelt, 651-756-4347Investor
Relationsjweigelt@sjm.comorCandace Steele Flippin,
651-756-3029Media Relationscsflippin@sjm.com
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