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In re SFBC International, Inc.
Securities & Derivative Litigation, Case No. 2:06-cv-00165 (SRC)
(United States District Court for the District of New Jersey)
Securities fraud class action filed on behalf of all investors who purchased
the securities of SFBC International, Inc. (k/n/a Pharmanet Development Group, Inc.) (“SFBC” or
the "Company")
between August 4, 2003 and December 15, 2005 (the "Class Period"). Defendants include the Company and
certain of its former senior officers and directors, including Lisa Krinsky, the Company’s former Chairman
and President, and Arnold Hantman, the Company’s former CEO. SFBC is a drug development services company
that conducts clinical tests of development-stage drugs in human subjects who are paid to participate in the experiments.
On September 11, 2006, the Honorable Stanley R. Chesler of the United States
District Court for the District of New Jersey consolidated all pending securities actions against SFBC,
and appointed BLB&G client Arkansas Teacher Retirement Systems as the Lead Plaintiff for the securities
actions, and appointed BLB&G as Lead Counsel.
On November 1, 2006, Lead Plaintiff filed a
Consolidated Class Action Complaint
(“Complaint”) against SFBC and certain other defendants. The Complaint alleges that during the Class
Period, SFBC and its senior officers and directors violated the federal securities laws by issuing false
and misleading periodic filings with the Securities and Exchange Commission and making other false and
misleading statements to investors. Specifically, the Complaint alleges that Defendants (1)
misrepresented the condition of the Company’s primary Miami facility and failed to disclose that
this facility – which was responsible for approximately 30% of the Company’s operating profit –
was in violation of numerous occupancy, zoning and other regulations such that Miami Dade County
authorities have since ordered the facility to be demolished; (2) misrepresented and failed to
disclose numerous unethical and dangerous clinical testing practices and conflicts of interest that
threatened the Company’s reputation; (3) misrepresented and failed to disclose related-party transactions
during the Class Period; and (4) misrepresented the qualifications of SFBC’s senior management team.
Based on these allegations, the Complaint asserts a number of claims under
the Securities Exchange Act of 1934 and the Securities Act of 1933 (the “Securities Act”) against SFBC,
Krinsky, Hantman and certain other defendants.
On December 3, 2007, the Court preliminarily approved an agreement to settle
Lead Plaintiff's claims against the defendants in this action for $28.5 million, $24.5 million of
which will be paid in cash, with the remaining $4 million paid in either cash or PDGI common stock, at the
Company's sole discretion.
A settlement fairness hearing will be held on on March 10, 2008 at 10:00 a.m. before the Honorable Stanley R.
Chesler at the United States District Court for the District of New Jersey, 50 Walnut Street, Courtroom PO
08 (located in the Post Office and Courthouse Building), Newark, New Jersey 07101.
IN ORDER TO BE ELIGIBLE TO SHARE IN THE BENEFITS OF THE SETTLEMENT, CLASS MEMBERS MUST
SUBMIT A COMPLETED AND SIGNED PROOF OF CLAIM FORM POSTMARKED NO LATER THAN APRIL 24, 2008.
Senior Partner
Max Berger, Partner John Browne, and
associate
Matthew Moehlman are
responsible for prosecuting this action.
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