SAN FRANCISCO (CN) - Two top executives touted the growth of Micrus Endovascular while its sales plummeted and insiders were selling off $6 million in shares, shareholders claim in a federal lawsuit.
Defendants CEO John Kilcoyne and CFO Robert Stern published financial statements that failed to mention significant factors hindering the company's performance, claims the suit filed on behalf of anyone who bought Micrus securities between February and September this year.
Micrus makes implantable, disposable medical devices. Increased competition coupled with a summer slowdown reduced North American revenue by millions of dollars in North America while unexpected delays in China and Japan whacked another $10 million from the company's Asian revenue, the executives acknowledged on Sept. 17. The news caused share price to drop by 26 percent the next day, to $17.37.
Company insiders, including Kilcoyne and Stern, used their inside information to dump almost 300,000 shares for more than $6 million, shareholders claim. They demand damages, attorneys' fees and costs. They are represented by Schiffrin, Barroway, Topaz & Kessler of Walnut Creek.