STAAR Surgical Company Class Action Lawsuit
- Company Name
- STAAR Surgical Company
- Stock Symbol
- Class Period
- February 26, 2020 to August 10, 2020
- Central District of California
The STAAR Surgical Company class action lawsuit charges STAAR Surgical and certain of its officers with violations of the Securities Exchange Act of 1934 and seeks to represent purchasers of STAAR Surgical common stock between February 26, 2020 and August 10, 2020, inclusive (the “Class Period”). The STAAR Surgical class action lawsuit was commenced on August 19, 2020 in the Central District of California and is captioned Alwazzan v. STAAR Surgical Company, No. 20-cv-01533.
STAAR Surgical designs, develops, manufactures, and sells implantable lenses for the eye and companion delivery systems used to deliver the lenses into the eye.
The STAAR Surgical class action lawsuit alleges that during the Class Period, defendants made false and/or misleading statements and/or failed to disclose that STAAR Surgical was overstating and/or mischaracterizing: (1) its sales and growth in China; (2) its marketing spend; and (3) its research and development expenses. As a result of the foregoing, defendants’ public statements were materially false and misleading at all relevant times.
On August 5, 2020, STAAR Surgical reported disappointing financial results. Specifically, STAAR Surgical reported that its net sales were down 11% from the prior year quarter and its implantable Collamer® lense sales were down 11% from the prior year quarter. STAAR Surgical also reported a net loss of $0.03 per share, versus net income of $0.08 per share in the prior year quarter. On this news, STAAR Surgical’s common stock price fell nearly 10%.
Then, on August 11, 2020, analyst J Capital Research published a report in which it wrote that “[w]e think that STAAR Surgical has overstated sales in China by at least one-third, or $21.6 mln. That would mean that all of [STAAR Surgical]’s $14 mln in 2019 profit is fake.” The report continued, stating that “[f]ake sales [in China] come at 100% margins and therefore translate directly into profit. That means that the roughly $21.6 mln in overstated Chinese sales in 2019 represent 152% of total company profit. In other words, without the fraud that we believe pervades the China business, STAAR is losing money.” On this news, STAAR Surgical’s common stock price fell an additional 6.2% – further damaging investors.
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