Robbins Arroyo LLP: Cardiovascular Systems, Inc. (CSII) Misled Shareholders According to a Recently Filed Class Action
February 18 2016 - 3:53PM
Business Wire
Shareholder rights law firm Robbins Arroyo LLP announces that a
class action complaint was filed in the U.S. District Court for the
Central District of California. The complaint alleges that officers
and directors of Cardiovascular Systems, Inc. (NASDAQGS: CSII)
violated the Securities Exchange Act of 1934 between September 12,
2011 and January 21, 2016, by making materially false and
misleading statements about Cardiovascular Systems' business
prospects. Cardiovascular Systems, Inc. is a medical technology
company that develops, manufactures, and markets devices to treat
vascular diseases in the United States.
View this information on the law firm's Shareholder Rights Blog:
www.robbinsarroyo.com/shareholders-rights-blog/cardiovascular-systems-inc-feb-2016
Cardiovascular Systems Accused of Engaging in Medicare and
Medicaid Fraud
According to the complaint, from 2011 through 2015,
Cardiovascular Systems ("CSI") filed several Form 10-K's with the
U.S. Securities and Exchange Commission stating, "We make every
effort to ensure that the billing and coding information furnished
is accurate and that treating physicians understand that they are
responsible for all treatment decisions." However, the complaint
alleges that CSI officials failed to disclose that the company
distributed illegal kickbacks to health care providers, engaged in
off-label promotion of its medical devices, and violated the Food
and Drug Administration's laws and regulations in connection with
its medical devices.
On July 15, 2013, a former CSI sales manager brought a
whistleblower lawsuit pursuant to the qui tam provisions of the
Federal Civil False Claims Act ("the Qui Tam action"). The Qui Tam
action alleged that CSI engaged in a fraudulent marketing scheme to
increase the sales of its various products and to obtain a more
favorable valuation of its stock to attract new investors. CSI's
kickback scheme, allegedly designed to influence medical personnel
to use CSI's medical devices, included all-expense-paid training
programs, giving free product to induce the purchase of another
product, and showing physicians how to maximize their financial
return by using CSI devices, including for unnecessary procedures.
Additionally, CSI's off-label marketing ("OLM") scheme purportedly
influenced medical personnel to use CSI's medical devices for
procedures that were not medically necessary or medically
reasonable. The OLM strategy also was said to induce physicians to
sue and obtain reimbursement for use of CSI medical devices on
patients covered by Medicare, Medicaid, and other government
payors.
On May 9, 2014, CSI received a letter from the U.S. Attorney's
Office for the Western District of North Carolina stating that it
is investigating the company to determine whether it has violated
the False Claims Act, resulting in the submission of false claims
to federal and state health care programs, including Medicare and
Medicaid. Then, on October 7, 2015, CSI disclosed that it expects
revenue from its 2016 fiscal first quarter to be approximately
$43.9 million, well below its previously issued guidance of $48.5
million to $50 million, and expects a net loss between $13.1
million to $13.9 million, citing the reformation of its sales
force, which was a materialization of the letter from the U.S.
Attorney's Office. On January 21, 2016, CSI disclosed that it
expects revenue from its 2016 fiscal second quarter to be $41.4
million, a 4% decrease from the second quarter of fiscal 2015, and
3% below the guidance range due to the continued effects of the
sales force transition. On this news, CSI stock fell $3.72 per
share, or approximately 30%, to close at $8.74 per share on January
22, 2016.
Cardiovascular Systems 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, DDonahue@robbinsarroyo.com, or via the
shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in
shareholder rights law. The firm represents individual and
institutional investors in shareholder derivative and securities
class action lawsuits, and has helped its clients realize more than
$1 billion of value for themselves and the companies in which they
have invested.
Attorney Advertising. Past results do not guarantee a similar
outcome.
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Robbins Arroyo LLPDarnell R. Donahue(619) 525-3990 or Toll Free
(800) 350-6003DDonahue@robbinsarroyo.comwww.robbinsarroyo.com
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