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AthroCare Corporation ARTC Securities Stock Fraud

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Company: AthroCare Corporation
Ticker Symbol: ARTC
Class Period: Jan-24-08 to Jul-18-08
Date Filed: Jul-28-08
Lead Plaintiff Deadline: Sep-26-08
Court: U.S. District Court for the Western District of Texas
Allegations:
The Complaint charges ArthroCare and certain of its officers with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that the defendants: (1) falsely reported ArthroCare's financial results for the quarter ended September 30, 2006 through the first quarter ended March 31, 2008; (2) falsely stated that the Company's financial statements were prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); and (3) falsely stated that the Company had adequate internal and financial controls. As a result of the foregoing, the financial statements being restated by the Company were materially false and misleading when issued.

ArthroCare is a medical device company that develops, manufactures and markets minimally invasive surgical products. Before the market opened on Monday, July 21, 2008, ArthroCare announced that it would be restating its previously reported financial results from the third quarter 2006 through the first quarter 2008 because it improperly recognized revenue from DiscoCare, Inc., State of the Art Medical Products, Boracchia & Associates and Clinical Technology, Inc. As a result, ArthroCare indicated that it expects ArthroCare's reported revenue in 2006 will be reduced by $4 million to $7 million, and that for 2007, reported revenue will be reduced by $20 million to $25 million. Further, ArthroCare revealed on July 21, 2008 that reported revenue for the first quarter of 2008 will be reduced by $2 million to $5 million, and that "the restatement will result in material reductions in operating income and net income for the annual and quarterly periods being restated." The Company also disclosed that while the restatement is being completed, a review of the Company's internal controls will be conducted and that further material misstatements or misconduct might still be uncovered.

Upon that announcement, shares of ArthroCare plummeted from its close of $40.03 on Friday, July 18, 2008 to a close of $23.21 on July 21, 2008, the next day of trading, on extraordinary volume -- a drop of over 42%. On July 24, 2008, the Company disclosed that the SEC had commenced an inquiry into the circumstances surrounding the restatement. During the period covered by the restatement, ArthroCare's officers and directors sold nearly $12 million worth of their personal holdings in ArthroCare.

If you acquired the securities of the defendants during the Class Period you may, no later than the Lead Plaintiff Deadline shown above, request that the Court appoint you as lead plaintiff through counsel of your choice. You may also choose to remain an absent class member. A lead plaintiff must meet certain requirements.

AthroCare Corporation ARTC Securities Fraud Legal Help

If you have suffered from financial losses, you may qualify for damages or remedies that may be awarded in a possible AthroCare Corporation securities class action lawsuit. Please fill in our form on the right to submit your complaint for a free evaluation.

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