Insider Selling/Undisclosed Related Party Transactions
Increased Risk Of Injury
Product or Service
Ongoing investigation and pending securities fraud class action lawsuit against St. Jude Medical Inc., a top manufacturer of implantable cardioverter defibrillator systems (ICD's).
St. Jude Medical violated federal securities laws by issuing a series of materially false statements.
1. St. Jude Medical omitted information regarding the sales success and prospects of a key St. Jude product, its implantable cardioverter defibrillator systems (ICD's).
2. St. Jude Medical pushed sales of ICD's into the fourth quarter of 2005 so as to inflate the stock price and achieve extraordinary personal benefits for top insiders (sometimes referred to as "channel stuffing"), including the CEO, who sold an unusual number of shares in the open market in the early months of 2006, and received a substantial boost in his compensation for 2005's performance, including a grant of 216,000 restricted shares worth (at the time) approximately $10 million.
On April 4, 2006, St. Jude revealed that it would materially miss sales projections made just weeks earlier. St. Jude Medical also announced that it was undertaking an intensive customer review to determine the cause of its sales shortfall. On this news, St. Jude stock fell to $36.25 on April 4, 2006, down $5.05 from the previous day's closing price of $41.30.
Name (Stock Symbol)
St. Jude Medical, Inc. (STJ)
St. Jude Medical, Inc. develops, manufactures, and distributes cardiovascular and implantable neurostimulation medical devices worldwide.
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