Robbins LLP: Globus Medical, Inc. (GMED) Misled Shareholders According to a Recently Filed Class Action
October 7, 2015 (San Diego, CA & Audubon, PA) – Robbins LLP announces that a securities fraud class action complaint was filed in the U.S. District Court for the Eastern District of Pennsylvania. The complaint alleges that officers and directors of Globus Medical, Inc. (NYSE: GMED) violated the Securities Exchange Act of 1934 between February 26, 2014 and August 5, 2014, by making materially false and misleading statements about Globus Medical’s business prospects. Globus Medical is a medical device company that focuses on the design, development, and commercialization of musculoskeletal implants to promote healing in patients with spine disorders.
Globus Medical Fails to Disclose Declining Financial Performance
According to the complaint, Globus Medical officials failed to disclose that the company’s relationship with a significant distributor was deteriorating, which in turn was negatively impacting the company’s financial performance. The complaint further alleges that company officials misled investors by creating an unrealistically positive assessment of the company and its financial condition, thus causing the price of Globus Medical’s securities to be artificially inflated.
On February 26, 2014, Globus Medical issued a press release in which its CEO, David Paul, expressed confidence in the company’s ability to produce “industry leading growth and outstanding profitability.” However, on August 5, 2014, Globus Medical issued a press release announcing its financial results for the 2014 second quarter and substantially lowered its revenue guidance for the 2014 year. The company disclosed that certain operating challenges had resulted in sales growth below its historical trends. On this news, the company’s shares fell $4.05 per share, or 17.9%, to close at $18.51 per share on August 6, 2014.
Globus Medical Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.