Skechers to Pay $40 Million to Settle False Advertising Charges
The Federal Trade Commission announced on May 16 that Skechers USA, Inc. has agreed to pay $40 million to settle charges that the company deceived consumers by making unfounded claims that Shape-Ups, one of its branded shoe line, would help people lose weight, and strengthen and tone their buttocks, legs and abdominal muscles.
In a press release, the FTC said Skechers also made deceptive claims about its Resistance Runner, Toners, and Tone-ups shoes. The case stemmed from allegations that Skechers made false and misleading advertising and marketing claims about the health benefits of its Shape-ups shoes product line, including that such shoes improve posture, promote weight loss, strengthen the back, improve blood circulation, promote sleep, reduce stress, reduce physical stress on knees, legs and ankle joints, and burn more calories. Read More
FDA Denies Approval of Alexza Pharmaceuticals (ALXA) Schizophrenia Drug
Shares of Alexza Pharmaceuticals (NASDAQ: ALXA) fell 20% or 12 cents to close at 49 cents on May 4, 2012, after the U.S. Food and Drug Administration (FDA) denied approval of a drug designed to rapidly treat agitation related to schizophrenia and bipolar disorder. The agency cited manufacturing deficiencies that affected its decision on Adasuve.
Alexza said it received a complete response letter from the FDA that said the company’s application is not ready for approval in its present form after a field investigator found deficiencies during a recent inspection of the company’s Mountain View, California facility.
The company said it plans to meet with the FDA to get a better understanding of the specific deficiencies.
Assisted Living Concepts (ALC) Shares Fall on Possible Irregularities
Shares of Assisted Living Concepts (NYSE: ALC) fell $2.37 or 12% to close at $16.80 on May 4, 2012, after the company announced it had retained counsel to investigate “possible irregularities” in connection with its lease with Ventas Realty LP, the landlord for eight facilities operated by Assisted Living.
The Wisconsin-based assisted living company also disclosed that Ventas Realty commenced a lawsuit against it on April 26, 2012 in the United States District Court for the Northern District of Illinois seeking a declaratory judgment that Assisted Living has breached its obligations under the building lease and forfeited its right to possession. Specifically, Ventas Realty alleges that Assisted Living’s receipt of notices of intent to revoke permits from state regulators with respect to its licenses to operate three assisted living facilities in Georgia and Alabama subject to the lease constitutes a violation of the lease.
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Class Action Accuses Allscripts of Concealing Unfavorable Financial Conditions
A class action was filed on May 2 in U.S. District Court for the Northern District of Illinois on behalf of purchasers of the common stock of Allscripts Healthcare Solutions, Inc. (NASDAQ: MDRX) between November 9, 2010 and April 26, 2012 alleging that Allscripts and certain of its officers misrepresented its progress in connection with the merger integration of Allscripts’ and Eclypsis’ disparate systems and the company’s ability to translate its fragmented product lines into revenues. Read More
Allos Therapeutics, Inc. Sued for Unfair Practices Regarding Spectrum Merger
A class action was filed on April 9 in U.S. District Court for the District of Colorado on behalf of all persons who held shares of the common stock of Allos Therapeutics, Inc. (NASDAQ: ALTH) on April 5, 2012 against Allos, its board of directors and Spectrum Pharmaceuticals, Inc. (“Spectrum”) for breaches of fiduciary duty in connection with the proposed acquisition of Allos by Spectrum and for violations of securities laws in connection with the company’s filing on April 13, 2012. Read More
Ubiquiti Networks (UBNT) Accused of Hiring Chinese Mafia to Scare Competition
A report by a Chinese website claims Ubiquiti Networks (NASDAQ: UBNT) CEO, Robert Pera, is under investigation by the Chinese government for using local mafia connections to stop rivals in China. Pera sent members of the Chinese mob to competitors’ factories to intimidate, harass, and threaten them from making similar products, the report claims.
Apple Inc. Sued For iTunes Overbilling and No Refund Policy
A California consumer has filed a class action against Apple Inc. for alleged double-billing of purchases made through iTunes, the App Store, and the iBookstore. The complaint also claims Apple refused to refund the overcharges by instituting an illegal “no refund” policy, in violation of the state’s statutory law and common law.
The complaint states that in December of 2010 Apple billed the plaintiff twice for one of 22 songs that he downloaded from iTunes. When he brought the overcharge to Apple’s attention, Apple sent an email refusing to refund the overcharge based on its purported no-refund policy.
Class Action Accuses Neutrogena of Misleading Consumers About its “Natural” Products
Since early 2011, Neutrogena allegedly made certain false and misleading representations in connection with the labeling, marketing and advertising of its “Neutrogena Naturals” products. The federal class action suit, filed in the U.S. District Court for the Northern District of California, San Francisco Division, accused the company of violating the state’s Consumers Legal Remedies Act, Unfair Competition Law, False Advertising Law, and breach express warranties. Read More
Minnesota AG Accuses Accretive Health (AH) of Federal and State Debt-Collection Laws
Accretive Health Inc. (NYSE: AH) shares fell 41.86% to $10.75 per share after Minnesota’s attorney general said the Chicago-based health care billing company improperly posted debt collectors in hospital emergency rooms and at the bedsides of patients.
Update: A shareholder class action was filed against Accretive Health in the U.S. District Court for the Northern District of Illinois on behalf of investors who purchased common stock during the period of March 2, 2011 through April 24, 2012. Please visit the Accretive Health class action lawsuit website for more information.
On April 24, Minnesota Attorney General Lori Swanson published a six-volume report on the practices of Accretive Health and non-profit hospital and clinic operator Fairview Health Services. The report focused on a broad range of issues, but focused on the company’s debt collection and payment practices. She said patients at Fairview Health Services, a Minnesota hospital chain, were pressured for payment by Accretive Health debt collectors before they received care in some cases and the debt collectors didn’t properly disclose their role. Hospitals hire Accretive Health as consultants who manage the revenue cycle and debt collection.
SEC Investigates Houston American Energy (HUSA) for Possible Securities Laws Violations
Houston American Energy Corp. (NYSE Amex: HUSA) said the Securities and Exchange Commission (SEC) is investigating possible securities violations against the energy company and has subpoenaed its executives. In reaction to the news, Houston American Energy shares fell 35.5%.
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