A securities class action suit was filed against a biopharmaceutical company and some of its officers after claims that it violated federal securities laws.
The lawsuit against GW Pharmaceuticals Plc was filed in the U.S. District Court for the Southern District of New York on behalf of investors who purchased shares in the company during the class period between Dec. 4, 2014 and Jan. 8, 2016, according to a press release. GW Pharmaceuticals specializes in identifying, developing and commercializing cannabinoid-based prescription medicines.
“GW Pharmaceuticals disclosed that its internal financial controls were inadequate.”
The class action complaint alleges that the company and certain officers made materially false and misleading statements about the GW Pharmaceuticals’ compliance, business and operational policies. The lawsuit specifically claims that the defendants failed to enforce effective internal finance controls and lacked proper controls over the “completeness and valuation of clinical trial accruals.” As a result of these allegations, the class action filing claims that the defendants’ statements made during the class period, regarding GW Pharmaceuticals’ business, operations and prospects, were false and misleading and/or lacked a reasonable basis.
On Jan. 10, a report from The Sunday Times claimed that GW Pharmaceuticals had disclosed that its internal financial controls were inadequate in its annual report filed with the Securities and Exchange Commission. Additionally, the publication reported that the annual filing determined the company’s management team lacked effective controls over the “completeness and valuation of clinical trial accruals.” The filing stated that management could not accurately review the clinical trials due to improper allocation of funds to the studies, according to the press release. In addition, it noted that management could not ensure the completion of trials in connection with “contractual progress payment liabilities.”
On this news GW Pharmaceuticals’ stock dropped $3.55, or nearly 6 percent, to close at $56.31 per share on Jan. 11, 2016.
For more information on this case or other class action litigations, please contact Adam Foulke at 203-987-4949 or firstname.lastname@example.org.