Lannett Company, Inc. receives class action lawsuit

A law firm recently announced that an investor has filed a class action lawsuit against a pharmaceutical marketing company for possible violations of federal securities laws.

Pomerantz, LLP, explained that the complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania. The lawsuit will be on behalf of all shareholders who purchased securities in Lannett Company, Inc. between September 10, 2013, and July 16, 2014.

The litigation alleges that the pharmaceutical company made materially false or misleading statements about its business, operational and compliance policies. Allegations include that Lannett violated Connecticut antitrust laws by fixing, maintaining and controlling the prices of digoxin and that the company was dividing digoxin customers and territories with competitors. The anti competitive business practices of Lannett led to increased scrutiny. Because of these actions, the company's public statements are considered materially false and misleading. 

In July, Lannett issued a press release detailing the State of Connecticut Office of the Attorney General's investigations of the company for alleged price fixing and customer division in regard to digoxin. Following Lannett's acknowledgment of the investigation, shares for the company fell a notably heavy $8.05 to close at $39.04. 

Shareholders have until October 27, 2014, to request appointment as lead plaintiff. Those looking for a copy of the complaint should visit Pomerantz' website. The best person to contact for those seeking further information is Robert S. Willoughby, who can be reached by phone or email. Anyone who contacts Pomerantz to learn more, or request to be appointed lead plaintiff for the class action lawsuit, should include their telephone number, mailing address and number of shares purchased. 

Separate investigations ongoing
Harwood Feffer, LLP, noted that it is also investigating the claims made against Lannett. The investigation into the company's directors and officers will focus on the statements made about the heart failure treatment medication, digoxin. 

In addition, Donovan Axler, LLC, has also filed a class action lawsuit against the company. During the period being investigated, the suit claims that Lannett submitted public documents detailing increases in net income, with digoxin sales accounting for 23 percent of the company's revenue, according to The Pennsylvania Record. Plaintiffs represented by Donovan Axler claim that Lannett's sudden drop in stock following the acknowledgement of its investigation caused investors significant losses and damages. 

Investors were mislead by Lannett's optimistic quarterly financial records that allegedly concealed its risky behavior, which led them to purchase stocks in the company.