SFBC International, now known as PharmaNet Development Group, has been named as a defendant in a securities class-action suit filed yesterday in the United States District Court of New Jersey. Plaintiffs are accusing SFBC and its senior officers of multiple violations of the Securities Exchange Act of 1934. This is the second class-action suit to be filed against the drug-research company this year.
The firm who filed the most recent suit, Bernstein Litowitz Berger & Grossmann LLP, alleges that Ã¢â‚¬Å“SFBC and its senior officers and directors violated the federal securities laws by making false and misleading periodic filings with the Securities and Exchange Commission (SEC) and making other false and misleading statements to investors.Ã¢â‚¬Â
The complaint accuses the defendant specifically of: misrepresenting the condition of its primary Miami facility and failing to disclose that this facility violated several occupancy, zoning, and other regulations, which forced the facility to suspend operations; failing to disclose unethical and dangerous clinical testing practices and conflicts of interest; failing to disclose related-party transactions; and misrepresenting the qualifications of SFBCÃ¢â‚¬â„¢s senior management team.
This has been a rather difficult year for SFBC International. In February, the firm of Kaplan Fox & Kilsheimer LLP filed a class-action suit in the same court, accusing SFBC of Ã¢â‚¬Å“publicly issuing a series of false and misleading statements regarding the companyÃ¢â‚¬â„¢s business and financial prospects, thus causing SFBCÃ¢â‚¬â„¢s shares to trade at artificially inflated prices.Ã¢â‚¬Â In August, the company changed its name to PharmaNet Development Group in the wake of negative press, poor financial performance, officer turnover, and legal challenges. An investigation by a U.S. Senate Committee led to the shutdown of SFBCÃ¢â‚¬â„¢s Miami facility, which was the largest drug-testing facility in the country.
The latest suit was filed on behalf of the Arkansas Teacher Retirement System. In both suits, the Class Period is between August 4, 2003, and December 15, 2005.