Hsu v. Puma Biotechnology
Plaintiffs’ Verdict Found that Defendants Committed Securities Fraud and Awarded Shareholders Up to $100 million in Damages
On February 4, 2019, a federal jury trial concluded with a verdict finding that defendants Puma Biotechnology, Inc. and its CEO, Alan H. Auerbach, committed securities fraud and awarded shareholders up to $100 million in damages. 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’s 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. The case, titled Hsu v. Puma Biotechnology, No. SACV15-0865, is pending in the U.S. District Court for the Central District of California before the Honorable Andrew J. Guilford.
“Any day we can hold bad actors responsible for investor losses is a good day,” noted Patrick Coughlin, one of Robbins Geller’s trial team members. 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 Forge, another 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 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 includes Patrick Coughlin, Jason Forge, Tor Gronborg, Trig Smith, Susannah Conn, Marco Janoski, Debashish Bakshi, Ting Liu, and Grace Cho.
Hsu v. Puma Biotechnology, No. SACV15-0865 (C.D. Cal.).