BENSALEM, Pa.--(BUSINESS WIRE)--Law Offices of Howard G. Smith announces that a class action lawsuit has been filed on behalf of investors that purchased Obalon Therapeutics, Inc. (“Obalon” or the “Company”) (NASDAQ: OBLN) securities between October 5, 2016 and January 23, 2018, inclusive (the “Class Period”). Obalon investors have until April 16, 2017 to file a lead plaintiff motion.
Investors that suffered losses on their Obalon investments are encouraged to contact the Law Offices of Howard G. Smith to discuss their legal rights in this class action at 888-638-4847 or by email to email@example.com.
On January 23, 2018, Obalon issued a press release disclosing 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 Company further stated that “Obalon’s Audit Committee will oversee an internal investigation of these allegations.”
On this news, Obalon’s stock price fell $1.73 per share, or 33.3%, to close at $3.46 per share 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 filed complaint alleges that throughout the Class Period, Defendants made materially false and misleading statements regarding the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose: (1) that the Company recognized revenue in violation of Generally Accepted Accounting principles (“GAAP”); (2) that the Company lacked adequate internal controls over accounting and financial reporting; and (3) that, as a result of the foregoing, the Company’s financial statements and Defendants’ statements about Obalon’s business, operations, and prospects, were materially false and misleading at all relevant times.
If you purchased shares of Obalon during the Class Period, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Howard G. Smith, Esquire, of Law Offices of Howard G. Smith, 3070 Bristol Pike, Suite 112, Bensalem, Pennsylvania 19020 by telephone at (215) 638-4847, toll-free at (888) 638-4847, or by email to firstname.lastname@example.org, or visit our website at www.howardsmithlaw.com.
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