St. Jude Medical, Inc. Securities Fraud Litigation

On March 18, 2010, investors filed a class action lawsuit against St. Jude Medical, Inc. and certain of its officers and executives (“Defendants”), alleging violations of the Securities Exchange Act of 1934. The lawsuit was commenced in the United States District Court for the District of Minnesota on behalf of all persons who purchased or otherwise acquired the securities of St. Jude Medical, Inc. between April 22, 2009 and October 6, 2009 (“Class Period”). St. Jude develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide.

Specifically, the complaint alleges that throughout the Class Period, Defendants: (i) failed to disclose the extent to which St. Jude’s business was reliant upon heavily discounted, end-of-quarter bulk sales to meet forecast expectations for its performance; (ii) issued materially false and misleading financial statements that failed to properly account for revenues from bulk sales and associated rebates and other inducements; (iii) issued financial guidance to investors that was contradicted by St. Jude’s internal forecasts; and (iv) concealed the extent to which an ongoing economic recession was affecting or could potentially affect sales of and demand for the Company’s products.

The Class Period begins when St. Jude issued its financial results for the first quarter in 2009, reporting that the Company experienced stable growth and market share gains throughout the period despite the global economic recession. Defendants further assured investors that the Company was well poised for continued growth, and that there were no signs of any slowdown, striking a defiant tone they would maintain throughout the Class Period. On October 6, 2009 (last day of the Class Period), just weeks after Defendants had reaffirmed that St. Jude was purportedly on track to meet its forecast guidance, the Company shocked investors by revealing a stunning miss in its third quarter 2009 forecast results. Revenue in every product line was down, St. Jude admitted in a press release issued that day, and overall revenues for the quarter would be 20% below the forecast Defendants had just reaffirmed. As a result of this disclosure, St. Jude’s common stock fell immediately, declining by $4.84, or 12.7%, on exceptionally high trading volume on October 6, 2009, causing millions of dollars in damages to Plaintiff and other members of the putative Class.

On June 16, 2010, Magistrate Judge Jeffrey J. Keyes appointed Building Trades United Pension Trust as Lead Plaintiff and approved its selection of Robbins Geller Rudman & Dowd as Lead Counsel and Zimmerman Reed as Liaison Counsel for the pending class action.

Case Progress in Court

On December 23, 2011, the Court denied defendants' motion to dismiss in part and granted it in part. All of the shareholders’ claims survived, with the exception of the claim that two of the defendants made false statements of material fact that deceived investors. The next phase of litigation, includes document production, depositions and the filing of a formal request that the action be certified by the Court as a class action.

What Can You Do?

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