SAN DIEGO & BILLERICA, Mass.--(BUSINESS WIRE)--Shareholder rights law firm Robbins Arroyo LLP announces that a class action complaint filed against Insulet Corporation (NasdaqGS: PODD) in the U.S. District Court for the District of Massachusetts (the "Court") survived the motion to dismiss. The complaint is brought on behalf of all purchasers of Insulet securities between May 7, 2013 and April 30, 2015, for alleged violations of the Securities Exchange Act of 1934 by Insulet's officers and directors. Insulet, a medical device company, develops, manufactures, and sells insulin delivery systems for people with insulin-dependent diabetes in the United States and internationally. In 2013, Insulet began selling a new version of its infusion system known as the OmniPod Eros ("Eros").
View this information on the law firm's Shareholder Rights Blog: www.robbinsarroyo.com/shareholders-rights-blog/insulet-corporation-may-17
Insulet Accused of Concealing Problems with its Infusion System
According to the complaint, on May 7, 2013, Insulet's former Chief Executive Officer, Duane DeSisto, touted the company's launch of its Eros system, noting that customers' initial feedback was excellent, that Insulet had transitioned all of its new customers to the new Eros, and that as a result, Insulet's growth was surging in the U.S. and overseas. The complaint alleges that in reality, Insulet was experiencing significant manufacturing and quality issues with Eros including defective needle and alarm mechanisms. Despite these ongoing setbacks, Insulet officials repeatedly assured investors that any problems were unexceptional and had been fully addressed and corrected.
On January 7, 2015, Insulet disclosed that it was appointing six new executives from outside the company into key leadership positions and that its fourth quarter 2014 revenue would be $5 to $8 million less than the company's recent guidance due to reduced demand for Eros product from Insulet's distributors. Insulet's Chief Executive Officer, Patrick Sullivan, subsequently admitted that Eros had experienced serious problems and that the company's new patient growth in the U.S. had actually been declining rather than increasing over the past year. Insulet had been masking the deterioration in its core business by manipulating the use of the "new patient stats" metric, which were inflated and misleading. As news of Insulet's troubles reached the market, its stock price declined by approximately 30% to close at $26.97 per share on May 1, 2015. On March 17, 2017, the Court denied Insulet's motion to dismiss the securities class action complaint.
Insulet Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Leonid Kandinov at (800) 350-6003, LKandinov@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.
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