NEW YORK--(BUSINESS WIRE)--Pomerantz LLP announces that a class action lawsuit has been filed against Obalon Therapeutics, Inc. (“Obalon” or the “Company”) (NASDAQ:OBLN) and certain of its officers. The class action, filed in United States District Court, for the District Southern District of California, and Docketed under 18-cv-00407, is on behalf of a class consisting of investors who purchased or otherwise acquired Obalon securities: (i) pursuant and/or traceable to Obalon’s false and misleading Registration Statement and Prospectus, issued in connection with the Company’s initial public offering on or about October 5, 2016 (the “IPO” or the “Offering”); and/or (ii) on the open market between October 5, 2016 and January 23, 2018, both dates inclusive (the “Class Period”), seeking to recover damages caused by Defendants’ violations of the Securities Act of 1933 (the “Securities Act”) and the Securities Exchange Act of 1934 (the “Exchange Act”).
If you are a shareholder who purchased Obalon securities between October 5, 2016, and January 23, 2018, both dates inclusive, you have until April 16, 2018, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained at www.pomerantzlaw.com. To discuss this action, contact Robert S. Willoughby at firstname.lastname@example.org or 888.476.6529 (or 888.4-POMLAW), toll-free, Ext. 9980. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.
Obalon Therapeutics, Inc. is a medical device company that focuses on developing and commercializing medical gastric balloons for weight loss therapy. The Company claims that its initial product offering is the Obalon balloon system, a U.S. Food and Drug Administration (“FDA”) approved swallowable, gas-filled intra-gastric balloon designed to provide progressive and sustained weight loss in obese patients.
The Complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operational and compliance policies. Specifically, Defendants made false and/or misleading statements and/or failed 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.
On January 23, 2018, Obalon issued a press release entitled “Obalon Announces Termination of Public Offering of Common Stock,” revealing 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.” The press release further stated that “Obalon’s Audit Committee will oversee an internal investigation of these allegations.”
On this news, Obalon’s share price fell $1.73, or 33.33%, to close at $3.46 on January 23, 2018, on unusually heavy volume. The $3.46 closing price represented a total decline of $11.54, or nearly 77%, from the IPO price of $15.00 per share.
The Pomerantz Firm, with offices in New York, Chicago, Los Angeles, and Paris, is acknowledged as one of the premier firms in the areas of corporate, securities, and antitrust class litigation. Founded by the late Abraham L. Pomerantz, known as the dean of the class action bar, the Pomerantz Firm pioneered the field of securities class actions. Today, more than 80 years later, the Pomerantz Firm continues in the tradition he established, fighting for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct. The Firm has recovered numerous multimillion-dollar damages awards on behalf of class members. See www.pomerantzlaw.com