Cyberonics Inc. Class Action Dismissed

Shareholders tried to file three lawsuits against the medical device maker for securities fraud related to the timing of its stock options. The lawsuits were consolidated and claimed Cyberonics' insiders sold $2 million in stock in 2004 while failing to disclose manufacturing and quality assurance problems. The U.S. District Court for the Southern District of Texas dismissed the consolidated shareholder complaint which was filed against the company along with certain officers and directors. The federal judge noted plaintiffs failed to prove a causal connection between plaintiffs' losses and the defendants' actions and failed to establish misstatements, prove intent or recklessness. (Jul-21-06) [REUTERS]