Hsu v. Puma Biotechnology
Case Summary
Verdict Found Puma Biotechnology, Inc. and Its CEO Committed Securities Fraud
On February 4, 2019, Robbins Geller attorneys won a plaintiffs’ verdict against both defendants on both claims, with the jury finding that Puma Biotechnology, Inc. and its CEO, Alan H. Auerbach, committed securities fraud. Robbins Geller represented a class of investors at trial, including lead plaintiff and class representative Norfolk County Council, as Administering Authority of the Norfolk Pension Fund. The case alleged that Puma’s CEO committed securities fraud by falsely representing that Puma’s lone product, a drug known scientifically as “neratinib” and later released commercially as Nerlynx, was twice as effective as it really was, which inflated Puma’s stock price. The jury agreed, finding that Puma and Auerbach committed securities fraud by misrepresenting neratinib’s effectiveness, and that defendants’ fraud caused investors to pay an inflated price for Puma stock. As a result of defendants’ false statements regarding the effectiveness of neratinib, the jury found that Puma’s common stock price was artificially inflated by $4.50 per share. Following a claims process and significant litigation regarding individual claimants, the defendants ultimately settled the case for 100% of the damages plus pre-judgment interest. The settlement was fully approved by the Court in August 2022.
The Puma case is only the fifteenth securities class action case tried to a verdict since the Private Securities Litigation Reform Act was enacted in 1995. “It’s hard to overstate the significance of this verdict because it confirms that jurors and investors alike demand integrity from corporations and their executives,” said Jason A. Forge, a member of the trial team.
“We are very proud of our trial team. It is gratifying to know that the jury has held Puma and its CEO accountable for their fraudulent misconduct,” noted Darren J. Robbins. While trials in shareholder class actions are rare, Robbins Geller has tried nine shareholder class action cases including the success in Puma. Robbins Geller’s Puma trial team included Jason A. Forge, Tor Gronborg, Trig Smith, J. Marco Janoski Gray, Ting H. Liu, and Grace Cho.
Hsu v. Puma Biotechnology, No. SACV15-0865 (C.D. Cal.).
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