Medtronic, Inc. Securities Fraud Litigation
On August 15, 2018, the United States District Court for the District of Minnesota preliminary approved the proposed $43 million dollar settlement in the investors’ case against Medtronic, Inc. The lead plaintiffs and class representatives are West Virginia Pipe Trades Health & Welfare Fund, Employees’ Retirement System of the State of Hawaii, and Union Asset Management Holding AG.
The case was vigorously litigated over the course of five years, including overcoming a dismissal of the case by the district court and a successful appeal and reversal at the Eighth Circuit Court of Appeals.
The settlement resolves allegations that the Medtronic Defendants violated the federal securities laws by making false and misleading statements regarding Medtronic during the Class Period. The definition of the Settlement Class, as preliminarily approved by the Court, is:
All persons who purchased or otherwise acquired Medtronic publicly traded common stock during the period from September 8, 2010, through and including June 28, 2011, except those persons and entities that are excluded.
To view the Long Form Notice, please click here.
More Settlement Information
The Court appointed Gilardi & Co. LLC as the claims administrator to supervise and administer the notice and to process the Proof of Claim forms. We encourage you to visit the website dedicated to the settlement for more information and important deadlines: www.MedtronicSecuritiesSettlement.com
Summary of Allegations
On June 27, 2013, investors filed a lawsuit in Minnesota federal court against Medtronic, Inc. and certain of its officers and executives (“Defendants”), alleging violations of the Securities Exchange Act of 1934. The lawsuit was brought on behalf of investors as well as a class of all persons who purchased or otherwise acquired the securities of Medtronic, Inc. between September 28, 2010 and August 3, 2011 (“Class Period”).
Specifically, the complaint alleges that Defendants disseminated false and misleading statements regarding the safety and efficacy of Medtronic’s INFUSE and INFUSE-based second generation products and the clinical studies used to support introduction into the market. Medtronic introduced INFUSE to the market in 2002 and identified it as critical to the growth of the company’s spinal unit division. The Infuse was used for spinal, trauma and oral maxillofacial applications.
In 2011, however, The Spine Journal, a leading industry publication, exposed several health and safety risks of INFUSE, including dedicating its June 28, 2011 issue to new critical studies of INFUSE. The Spine Journal also reported financial conflicts of interest by researchers who had published initial studies finding that the product was safe. The Journal reported that articles may have been slanted in favor of INFUSE, and noted various side effects that may have been downplayed in research. On June 29, 2011, one day after the release of the article, Medtronic’s stock dropped $0.92 per share to close at $38.09 per share, a one-day decline of nearly 3% on volume of 10 million shares. Shortly after, securities analysts with Wells Fargo Securities and J.P. Morgan expressed potential reduction in the price of Medtronic (MDT). Finally, on August 3, 2011, Medtronic revealed it would publicly release INFUSE data so that Yale researchers could conduct a review. On this news, Medtronic’s stock price dropped again at $1.47 per share to close at $32.48 per share on August 4, 2011, a one-day decline of 4% on volume of 11.5 million shares.
- November 4, 2013: Consolidated Class Action Complaint
- December 28, 2016: Eight Circuit Order, Reversing Dismissal
- January 30, 2018: Court Order, Granting Renewed Motion for Class Certification
- March 2, 2018: Court Order, Denying in Part Medtronic’s Renewed Motion for Summary Judgement
- August 16, 2018: Court Order, Granting Motion for Preliminary Approval of Settlement
- January 30, 2018: Medtronic Investors Win Cert. in Revived Stock Drop Suit, law360.com
- July 23, 2018: Medtronic Agrees to Pay $43M to Settle Investor Lawsuit, startribune.com