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In re Bausch & Lomb Incorporated
Securities Litigation
(United States District Court for the
Western District of New York)
Securities fraud class action filed on behalf of all purchasers of Bausch & Lomb publicly
traded securities during the period from January 29, 2004 to May 3, 2006 (the “Class Period”).
On October 26, 2007, the Honorable Marian W. Payson, Magistrate Judge of the United
States District Court for the Western District of New York, entered an Order appointing the Police and Fire Retirement
System of the City of Detroit, as Co-Lead Plaintiff and BLB&G as Co-Lead Counsel for the Class in this action.
Bausch & Lomb develops, manufactures and markets eye health products, including contact
lenses and contact lens care solutions. Bausch & Lomb’s headquarters is in Rochester, NY. The company is listed on
the New York Stock Exchange (BOL).
The case concerns allegations of a pervasive accounting fraud, a failure to maintain
adequate internal controls, and material misrepresentations and omissions concerning one of Bausch & Lomb’s leading
products.
According to Plaintiffs’
Amended Complaint, throughout the Class Period, Bausch & Lomb
reported artificially inflated financial results due to a variety of improper accounting practices which violated
Generally Accepted Accounting Principles (“GAAP”). At the same time the company began publicly addressing its accounting
scandal, Bausch & Lomb was experiencing and concealing serious problems with one of its flagship products, ReNu® with
MoistureLoc™ contact lens solution. Bausch & Lomb has now admitted that its Class Period financial statements violated
GAAP and has restated them. The company has also withdrawn ReNu with MoistureLoc from the market and has been sued in
over 340 personal injury lawsuits by users of ReNu with MoistureLoc who suffered serious corneal infections, some of
which required corneal transplants.
The Amended Complaint alleges that the accounting fraud at Bausch & Lomb was
widespread. Bausch & Lomb has admitted that over the course of four years it issued materially false and misleading
financial statements that violated GAAP. The Company has further admitted that its false and misleading financial
statements emanated from a multitude of material internal control weaknesses and from the deliberate override of
company policies and procedures by corporate managers. A series of disclosures about the company’s improper accounting
caused significant investor losses. For example, after Bausch & Lomb announced on December 22, 2005 that it would have
to restate its previously issued financial statements for 2000 to 2004 and the first two quarters of 2005, the stock
price fell 15% over the next four trading sessions on very heavy volume.
In addition to the accounting scandal, during the summer of 2005, foreign health officials
notified Bausch & Lomb of unusual outbreaks of very serious eye infections, known as Fusarium keratitis, in users of ReNu
with MoistureLoc. Rather than disclosing these facts concerning the company’s flagship product to investors, users of
the product, and the U.S. Food and Drug Administration, Bausch & Lomb remained silent. ReNu with MoistureLoc was an
extremely important growth product for the company that generated high profit margins.
Frustrated by the lack of action by Bausch & Lomb’s management, foreign health officials
began to warn their residents about ReNu with MoistureLoc. In response, Bausch & Lomb issued statements asserting
that no direct causal nexus between ReNu with MoistureLoc and Fusarium keratitis had been established. Eventually,
under pressure from U.S. and foreign health officials, retailers, and consumers, Bausch & Lomb capitulated and
announced a permanent, global recall of ReNu with MoistureLoc.
In response to a series of negative disclosures about Renu with MoistureLoc from
March to May 2006, Bausch & Lomb stock price dropped precipitously. For example, the stock fell 32% during the
15 days to April 12, 2006, losing $1.18 billion of market value, in response to partial revelations of the truth
about Renu with MoistureLoc.
Lead Plaintiffs filed their Amended Complaint on January 7, 2008. Under a scheduling
order entered by the Court, Defendants’ motion to dismiss the case was filed on March 7, 2008, and Lead Plaintiffs’
opposition to the motions to dismiss is due on May 6, 2008; and Defendants'
reply in support of the motion is due on June 3, 2008.
Firm partner
Salvatore Graziano and associate
Jai Chandrasekhar are responsible for
prosecuting this action.
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