Medtronic Agrees $85M Bone Graft Securities Class Action Settlement

New York, NY: Medtronic has agreed to pay $85 million to settle claims brought by investors in a securities class action lawsuit. The lawsuit claims that the investors were misled by company leaders on the off-label uses of the company's bone graft. The settlement still awaits final documentation and court approval.

The lawsuit, filed in 2008 by the Minneapolis Firefighters Relief Association, claims that Medtronic' officers and directors made false and misleading statements about Infuse, a bone graft product, and as a result, company stock traded at artificially inflated prices.

The lawsuit claims that shareholders were misled by a nearly decade-long campaign to illegally promote Infuse for uses not approved by the Food & Drug Administration. Sales and future growth of the graft were "driven by misconduct that invited, and ultimately brought about, the scrutiny of federal regulators and an abrupt decline in sales,"according to a case brief by attorneys for the investors. As a result, revenues declined, so did the value of shares, which fell to $31.60 from $57.86.

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Published on Apr-2-12