RADNOR, Pa., March 27 /PRNewswire/ -- The following statement was issued today by the law firm of Schiffrin Barroway Topaz & Kessler, LLP:
Notice is hereby given that a class action lawsuit was filed in the United States District Court for the District of Massachusetts, on behalf of all purchasers of securities of NeuroMetrix Inc. (Nasdaq: NURO) ("NeuroMetrix" or the "Company") between October 27, 2005 and March 6, 2007, inclusive (the "Class Period").
If you wish to discuss this action or have any questions concerning this notice or your rights or interests with respect to these matters, please contact Schiffrin Barroway Topaz & Kessler, LLP (Darren J. Check, Esq. or Richard A. Maniskas, Esq.) toll free at 1-888-299-7706 or 1-610-667-7706, or via e-mail at [email protected]
The Complaint charges NeuroMetrix and certain of its officers and directors with violations of the Securities Exchange Act of 1934. NeuroMetrix designs, develops and markets medical device products that aid physicians in the diagnosis and treatment of diseases of the nervous system and neurovascular disorders, as well as provide regional anesthesia and pain control. In particular, The NC-stat System, the Company's neuropathy diagnostic system, is comprised of disposable single-use biosensors which are placed on the patient's body to perform nerve conduction studies.
The Complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company's financial well-being, business relationships, and prospects. Specifically, defendants failed to disclose or indicate the following: (1) that health insurers were routinely and increasingly denying reimbursement, and raising payment issues, for procedures using the NC-stat System; (2) that field practitioners had raised serious concerns about the NC-stat System's efficacy; (3) that the Company had not applied for its own insurance billing code, but instead had instructed doctors to use billing codes for competing needle procedures; (4) that the Company was giving kickbacks to doctors by providing free sensors in exchange for referring other doctors to the NC-stat System; (5) that the Company lacked adequate internal and financial controls; and (6) that the Company's financial statements were materially false and misleading at all relevant times.
On March 6, 2007, investors were shocked when The Boston Globe reported that federal prosecutors were investigating NeuroMetrix regarding possible fraud and for kickbacks the Company gave to doctors who recommended NeuroMetrix's product. Additionally, the article disclosed that the Company had not sought new billing codes for its NC-stat System, but rather had instructed doctors to use codes reserved for a different, more invasive procedure. On this news, the Company's shares fell $0.84 per share, or 7.62 percent, to close on March 6, 2007 at $10.18 per share, on unusually heavy trading volume. The Company's shares continued to decline the following day, falling an additional $0.73, or 7.17 percent, to close on March 7, 2007 at $9.45.
The Boston Globe article was the first in a series of shocking news articles which had disastrous effects on the Company's shares. Also, revelations by the Company had a detrimental impact on its shares. For example, on March 28, 2007, the Company announced that its financial statements for fiscal years 2002 through 2005, as well as the first three quarters of 2006 could no longer be relied upon, as it had failed to collect and remit sales taxes from customers in a number of states. As a result, the Company was forced to record sales tax liability. Additionally, the Company disclosed that a material weakness existed in its internal controls over financial reporting.
Then, on February 11, 2008, TheStreet.com reported that a meeting of the American Medical Association would likely result in minimal reimbursement to healthcare providers who used the Company's NC-stat System, and that the system would not be eligible for reimbursement under Medicare or Medicaid. The next day, the Company reported on these events, and reported that its revenues for the fourth quarter of 2007 were down from the previous year and previous quarter. The Company stated that it expected to continue to face "significant challenges" with regards to reimbursement of tests performed with the NC-stat System, and that this would continue to adversely impact their financial results.
On this news, the Company's shares fell $5.22 per share, or 49.15 percent, to close on February 11, 2008 at $5.40 per share, on unusually heavy trading volume. The next day, the Company's shares fell an additional $1.20 per share, or 22.22 percent, to close on February 12, 2008 at $4.20 per share, on unusually heavy trading volume.
Plaintiff seeks to recover damages on behalf of class members and is represented by the law firm of Schiffrin Barroway Topaz & Kessler which prosecutes class actions in both state and federal courts throughout the country. Schiffrin Barroway Topaz & Kessler is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.
For more information about Schiffrin Barroway Topaz & Kessler or to sign up to participate in this action online, please visit www.sbtklaw.com
If you are a member of the class described above, you may, not later than May 16, 2008, move the Court to serve as lead plaintiff of the class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class. Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff. Any member of the purported class may move the court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
SOURCE Schiffrin Barroway Topaz & Kessler, LLP