The Complaint brought forth claims for violations of the Securities Exchange Act of 1934 against AtriCure, Inc., and certain of its senior executives. The Complaint alleged that Defendants made false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects on behalf of all persons or entities that purchased or otherwise acquired Atricure common stock during the class period.
AtriCure, a Delaware Corporation with its principal executive offices in West Chester, Ohio, is a medical device company engaged in the development, manufacture, and sale of cardiac surgical ablation systems designed to create precise lesions, or scars, in cardiac tissue. The Company sells its products to hospitals and medical clinics primarily through its direct sales force in the United States, as well as through distributors in Asia, Europe, South America, and Canada.
Specifically, the Complaint alleged that Defendants made false and misleading statements relating to the marketing and promotion of its products and the training of doctors in the off-label use of its products and that certain Defendants engaged in insider trading when the stock was trading at artificially inflated prices. When AtriCure revealed on October 31, 2008, that it had received a letter from the U.S. Department of Justice, Civil Division (the “DOJ”) informing the Company that the DOJ was conducting an investigation relating to AtriCure’s surgical ablation system, its stock price declined $2.53 per share, or 39.41 percent, to close on November 3, 2008 at $3.89 per share.
On February 17, 2009, Saxena White P.A. was appointed Co-Lead Counsel, and Plaintiffs filed an amended complaint on May 8, 2009.
On March 29, 2010, the Court denied in part the Defendants’ motion to dismiss. The Court found that Plaintiffs’ allegations regarding false and misleading statements met the pleading requirements for a section 10(b) claim and were not dependent on the legality or illegality of Defendants’ promotion and sales activities. The Court also found that allegations regarding insider trading of the Individual Defendants were sufficient to satisfy the pleading of scienter.
After a long in-person mediation, the parties achieved an outstanding settlement result for the class that provided for the creation of a $2,750,000 fund. On October 1, 2010, the parties submitted a motion for the Court to approve the settlement. On July 30, 2010, the Court preliminarily approved the settlement, and then on October 13, 2010, entered final judgment finding the settlement to be fair, reasonable and adequate in all respects.
