SAN FRANCISCO (CN) - A county retirement fund will get a $23 million settlement from genetic testing company Celera, which it accused of inflating its stock price through false and misleading statements.
In a 2010 class action, Washtenaw County, Mich. Employees' Retirement System claimed Celera Corp., its CEO and two CFOs made false and misleading statements about the company's finances from April 2008 through July 2009.
Celera stock reached a high $16.23 during that time, in July 2009, then sank to $5.83, a 64 percent loss, according to the complaint.
Celera assured investors it had adequate reserves for bad debts, but as an out-of-network provider of lab services, it allowed patients to skip out on paying for their lab work. By July 2009, 48 percent of Celera's revenue had been eaten up by bad debts, the class claimed.
U.S. District Judge Edward Davila granted preliminary approval for the proposed settlement on Tuesday. The class also was awarded $1.75 million from PriceWaterhouse Coopers.
Class members will get about $18 million of the settlement.
Alameda-based Celera was purchased by Quest Diagnostics in 2011. Celera's research had focused on identifying genetic markers to identify cancer and cardiovascular disease.
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