Caraco Pharmaceutical Laboratories Ltd. (AMEX:CPD) has announced that two federal securities class-action lawsuits have been filed against the Detroit-based generic drug maker and two of its executive officers.
The lawsuits, which were filed on July 17 and July 23, were filed in the United States District Court for the Eastern District of Michigan.
Caraco said it has not yet been served with either suit.
Since 2005, Caraco has been cited by the Food and Drug Administration for quality control problems at its Detroit manufacturing plant. In June, the FDA and U.S. Marshalls seized more than 30 generic drugs and related ingredients because of the unresolved manufacturing problems.
Earlier this month, Caraco announced it would lay off 350 of its 650 workers because of its ongoing problems.
One of the lawsuits was filed by Los Angeles-based Glancy Binkow & Goldberg LLP, according to the complaint. It is on behalf all persons or entities that purchased Caraco securities between May 29, 2008 and June 25.
Two Caraco executives were also named in the lawsuit, CEO Daniel Movens and interim CFO Mukul Rathi.
Caraco said the lawsuits allege that during this time period defendants violated federal securities laws, primarily related to public statements about FDA compliance.
Caraco officials said in a statement that the plaintiffs' allegations are without merit and intends to vigorously contest the actions.
Caraco's stock price was $3.22 at 1:30 p.m. Friday. It has ranged from $16.40 to $1.75 the past year. Caraco's high-water mark was $18.50 on March 31, 2008.
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