A Medical Device Daily
Hansen Medical (Mountain View, California) is facing another class action lawsuit for allegedly making false and/or misleading statements regarding its business, operations and prospects.
The law offices of Howard G. Smith (Bensalem, Pennsylvania) said it filed a class action lawsuit consisting of all investors who purchased the securities of Hansen between May 1, 2008 and Oct. 18, 2009. The suit was filed in the U.S. District Court for the Northern District of California.
Earlier this week, Glancy Binkow & Goldberg (Los Angeles) reported filing a similar class action suit, also on behalf of investors who bought securities of Hansen during the same period (Medical Device Daily, Oct. 27, 2009).
Like the previously reported suit, this latest complaint alleges that defendants knew or recklessly disregarded that their public statements concerning Hansen's business, operations and prospects were materially false and misleading. Specifically, throughout the class period defendants made false and/or misleading statements and/or failed to disclose that: the company improperly recognized revenue; as a result, Hansen's revenue and financial results were overstated during the class period; the company's financial results were not prepared in accordance with generally accepted accounting principles; Hansen lacked adequate internal and financial controls; and, as a result, the company's financial statements were materially false and misleading at all relevant times.
On Oct. 19, Hansen revealed that the audit committee of its board of directors, upon the recommendation of management, concluded that the company's previously issued financial statements contained in its annual report on Form 10-K for the year ended Dec. 31, 2008, and the company's quarterly reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008, Sept. 30, 2008, March 31, 2009 and June 30, 2009, should no longer be relied upon because of errors arising from "potential irregularities outside of the accounting department." According to the company, Hansen identified systems for which revenue should have been recognized in a later period than the period in which it was recognized, and revenue on systems that should have been reflected as deferred revenue on its balance sheet as of June 30, 2009.
Hansen shares declined 31 cents a share, more than 9%, to close on Oct. 19, at $3.12 a share, on unusually heavy trading volume.