Speakes v. Taro Pharmaceutical Industries, Inc.
Case No.: 16-cv-08318-ALC-OTW (S.D.N.Y. 2024)
On December 27, 2016, Bernstein Liebhard LLP was appointed Lead Counsel for Lead Plaintiff the City of Atlanta Firefighters’ Pension Fund.
Lead Plaintiff filed an amended complaint on June 19, 2017 (the “Complaint”) alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (“Exchange Act”), and Rule 10b-5 promulgated thereunder, against Taro Pharmaceutical Industries, Ltd. (“Taro”), Kalyanasundaram Subramanian, and Michael Kalb. The Complaint alleged that Taro was a co-conspirator in a generic drug, price-fixing scheme and that Defendants misled investors by misrepresenting Taro’s purported competition, the cause of Taro’s price increases, and sales growth. These actions caused investors to purchase Taro stock at artificially inflated prices and investors were damaged when Taro finally revealed that it was being investigated by the Department of Justice concerning antitrust violations.
Bernstein Liebhard successfully opposed two motions to dismiss the Complaint filed by the Defendants and then effectively litigated an antitrust action and a securities fraud class action against Defendants. The alleged securities fraud was predicated on proving that Taro committed illegal price-fixing on enough of its drugs that material amounts of Taro’s revenue were illicit. If substantiated, a jury could find that certain representations about Taro’s revenue to investors were false or misleading and fraud if there was enough evidence of scienter. Lead Counsel reviewed thousands of pages of document productions, worked with expert consultants, and built a strong case on behalf of Lead Plaintiff and the putative Class.
After years of discovery, the parties agreed to mediate the case and ultimately agreed to a $36 million settlement for investors. On April 10, 2024, the parties executed the Stipulation and Agreement of Settlement. The $36 million settlement is an excellent result for investors, representing approximately 29% of Lead Plaintiff’s expert’s calculation of Settlement Class’s maximum damages (or 47% of discounted damages after accounting for risks that later materialized). The Court granted final approval of the Settlement on August 23, 2024.
