August 27, 2010 (San Diego, CA) –The settlement approved by the United States District Court for the Southern District of California between certain current and former officers and directors of Sequenom, Inc. (NASDAQ:SQNM), the company, and plaintiff shareholders in a shareholder derivative action filed in May 2009 became final today, according to Robbins Umeda LLP, co-lead counsel for the plaintiffs.
The settlement resolves claims of violations of common law and California Corporations Code by certain current and former Sequenom officers and directors beginning in June 2008 that allegedly caused substantial monetary losses and other damages to the company.
Sequenom, a healthcare company focused on diagnostic testing and genetics analysis, had made highly positive public claims about a new diagnostic technology for prenatal genetic disorders, SEQureDx, based on research and development testing results. The company indicated that the new technology was nearly 100% accurate in identifying Down syndrome. This was followed by a sharp rise in the company’s stock price. The company later announced that these tests had been mishandled by employees, and the plaintiffs have since alleged that test results were skewed and misrepresented by the company and certain former officers and directors. After Sequenom disclosed the allegedly mishandled test results, Sequenom’s stock price dropped from $14.91 per share to $3.62 per share.
The settlement that became final today acknowledged a $14 million benefit to the company and requires Sequenom to implement corporate governance reforms and changes to ensure accuracy of information released to the public, and the revision of clinical study protocols and procedures. In addition, the litigation helped prompt the termination or resignation of certain Sequenom executives who were directly involved in the alleged wrongdoing and helped to ensure that Sequenom’s limited corporate assets were not wasted on excessive severance packages for these individuals upon them leaving the company.
“We pursue these cases and fight for shareholders to help them enforce their rights, which is often not possible through typical corporate democracy,” said Brian Robbins, co-lead counsel for the plaintiffs. “We are confident the result we achieved will help the company recover from the mistakes of its management and return some value to shareholders.”
At the final hearing, Presiding Judge Larry Alan Burns recognized Robbins Umeda LLP attorneys as “competent, experienced, trustworthy lawyers,” and said of the result, “Sequenom has agreed to institute substantial corporate governance reforms which is one of the objectives of this lawsuit,” adding that Robbins Umeda “obtained what I find to be a just result.”
For more information about In re Sequenom, Inc. Derivative Litigation, Case No. 09-CV-1341-LAB(WMc) (S.D. Cal. Jul. 26, 2010), please visit www.robbinsarroyo.com and click on “Notices.”
* The firm name changed from Robbins Umeda LLP to Robbins LLP on January 1, 2013.