Update: This case has settled for $24 million.
Pomerantz LLP was co-lead counsel in a class action lawsuit against Akorn, Inc. and certain of its officers. The class action, filed in United States District Court, Northern District of Illinois, Eastern Division, and docketed under 15-cv-01944, was on behalf of a class consisting of all persons or entities who purchased Akorn securities between April 17, 2014 and March 2, 2015, inclusive (the "Class Period"). This class action sought to recover damages against defendants for alleged violations of the federal securities laws under the Securities Exchange Act of 1934 (the "Exchange Act").
Akorn, Inc. engages in the manufacture and marketing of diagnostic and therapeutic ophthalmic pharmaceuticals products, hospital drugs, and injectable pharmaceuticals in the United States and internationally. The Company offers products in various specialty areas, including ophthalmology, antidotes, anti-infectives, pain management, anesthesia, and vaccines.
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: (1) as of December 31, 2014, more than eight months after it acquired Hi-Tech and four months after it acquired VersaPharm, Akorn did not yet integrate those subsidiaries into the Company's centralized accounting department and accounting systems; (2) certain financial and other related data related to Hi-Tech and VersaPharm, which require inclusion in Akorn's annual report to be filed with the SEC on Form 10-K, could not be timely collected and compiled; (3) due to the aforementioned issues, the Company would be unable to timely complete its assessment of the effectiveness of its internal control over financial reporting as of December 31, 2014; (4) Akorn's internal control over financial reporting was ineffective and material weaknesses existed relating to the completeness and accuracy of underlying data used in the determination of significant estimates and accounting transactions and accurate and timely reporting of its financial results and disclosures in its Form 10-K; (5) and as a result of the foregoing, Akorn's public statements were materially false and misleading at all relevant times.
On March 2, 2015, after the close of trading, the Company issued a press release and filed a Form 12b‑25, Notification Of Late Filing, with the SEC, announcing that it would need an extension to file its annual report on Form 10-K for the year ending December 31, 2014.
As a result of this news, shares of Akorn fell $4.38, or over 8%, on unusually heavy volume, to close at $49.33 on March 3, 2015.