The Law Offices of Frank R. Cruz Reminds Investors of Looming Deadline in the Class Action Lawsuit Against Tactile Systems Technology, Inc. (TCMD)
Then, on February 21, 2020, the court denied Tactiles motion to dismiss the Qui Tam complaint in its entirety.
The Law Offices of Frank R. Cruz reminds investors of the upcoming November 30, 2020 deadline to file a lead plaintiff motion in the class action filed on behalf of investors who purchased Tactile Systems Technology, Inc. (“Tactile” or the “Company”) (NASDAQ: TCMD) securities between May 7, 2018 and June 8, 2020, inclusive (the “Class Period”).
If you are a shareholder who suffered a loss, click here to participate.
On March 20, 2019, an amended Qui Tam complaint against Tactile was unsealed, alleging that the Company illegally paid hospital staff to induce physicians to prescribe its medical devices and had submitted fraudulent claims to Medicare and Veteran’s Administration (“VA”).
On this news, Tactile’s share price fell $4.53 per share, or over 7%, over two consecutive trading sessions to close at $55.57 per share on March 22, 2019.
Then, on February 21, 2020, the court denied Tactile’s motion to dismiss the Qui Tam complaint in its entirety. Analysts warned that “[o]nly two options remain—either this qui tam gets settled out of court, or it goes to discovery.”
On this news, Tactile’s share price fell $6.65 per share, or over 10%, to close at $56.09 per share on February 24, 2020.
On June 8, 2020, OSS Research issued a report on alleging that “the true source of Tactile’s growth” is “a kick-back scheme that has resulted in rampant overprescribing.” The OSS Research report also alleged that “Medicare has recently launched an industry-wide audit in which Tactile has been disproportionately targeted. 70% of Tactile’s claims audited so far have been retroactively denied.”
On this news, Tactile’s share price fell $6.05 per share, or over 11%, to close at $45.67 per share on June 9, 2020, thereby injuring investors.
The complaint alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) while Tactile publicly touted a $4 plus billion or $5 plus billion market opportunity, in fact, the total addressable market for Tactile’s medical devices was materially smaller; (2) to induce sales growth and share gains, the Company and/or its employees were engaged in illicit and illegal sales and marketing activities in violation of applicable federal and state rules and public payer regulations; (3) the foregoing illicit and illegal sales and marketing activities increased the risk of a Medicare audit of the Tactile’s claims and criminal and civil liability; (4) Tactile’s profits were in part the product of unlawful conduct and thus unsustainable; and that as a result of the foregoing, (5) the Companys’ public statements, including its year-over-year revenue growth and the purported growth drivers, were materially false and misleading at all relevant times; and (6) that, as a result of the foregoing, the Defendants’ statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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If you purchased or otherwise acquired Tactile securities during the Class Period, you may move the Court no later than November 30, 2020 to request appointment as lead plaintiff in this putative class action lawsuit. To be a member of the class action you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the class action. If you wish to learn more about this class action, or if you have any questions concerning this announcement or your rights or interests with respect to the pending class action lawsuit, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to [email protected], or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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