NEW YORK--(BUSINESS WIRE)--Faruqi & Faruqi, LLP, a leading national securities law firm, reminds investors in Obalon Therapeutics, Inc. (“Obalon” or the “Company”) (NASDAQ:OBLN) of the April 16, 2018 deadline to seek the role of lead plaintiff in a federal securities class action that has been filed against the Company.
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The lawsuit has been filed in the U.S. District Court for the Southern District of California on behalf of all those who purchased Obalon securities: (1) pursuant and/or traceable to Obalon’s Registration Statement and Prospectus, issued in connection with the Company’s initial public offering on or about October 5, 2016 (the “IPO”); and/or (2) between October 5, 2016 and January 23, 2018 (the “Class Period”). The case, Cook v. Obalon Therapeutics, Inc. et al, No. 3:18-cv-00407 was filed on February 22, 2018, and has been assigned to Judge Anthony Joseph Battaglia.
The lawsuit focuses on whether the Company and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose that: (i) the Company recognized revenue in violation of Generally Accepted Accounting Principles (“GAAP”); (ii) the Company lacked adequate internal controls over accounting and financial reporting; and (iii) as a result, Obalon’s public statements were materially false and misleading at all relevant times.
Specifically, on January 23, 2018, Obalon issued a press release revealing, in part, that “a purported whistleblower contacted KPMG LLP, the Company’s independent auditors, to make certain allegations relating to allegedly improper revenue recognition during the Company’s fourth fiscal quarter of 2017.”
On this news, Obalon’s share price fell from $5.19 per share on January 22, 2018 to a closing price of $3.46 on January 23, 2018—a $1.73 or a 33.33% drop. In addition, Obalon’s closing price of $3.46 per share on January 23, 2018 represented a decline of $11.54 or 76.93% from the Company’s IPO price of $15.00 per share.
The court-appointed lead plaintiff is the investor with the largest financial interest in the relief sought by the class who is adequate and typical of class members who directs and oversees the litigation on behalf of the putative class. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. Your ability to share in any recovery is not affected by the decision to serve as a lead plaintiff or not.
Faruqi & Faruqi, LLP also encourages anyone with information regarding Obalon’s conduct to contact the firm, including whistleblowers, former employees, shareholders and others.
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