An investigation on behalf of former and current employees of Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD) concerning potential Employee Retirement Income Security Act (“ERISA”) Breach of Fiduciary Duty was announced.
Those who are former or current employees or are a member of any of Caraco Pharmaceutical Laboratories Ltd. investment plans or profit sharing retirement plans and purchased or held Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD) shares or have information relating to this investigation, you should contact the Shareholders Foundation, Inc. at Email: mail(at)shareholdersfoundation.com or call us at: +1 (858) 779 - 1554. Caraco Pharmaceutical Laboratories Ltd. has been accused of securities fraud and according to a an investigation by a law firm under ERISA employees (former and current) of Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD) may be eligible to file a ERISA complaint for putting stock options at risk if they can prove their employer violated its fiduciary duty to them. The Fiduciary duty refers to a company’s responsibility to the people who invest in it and if an employer puts the company’s interest ahead of the investors’, it has broken its fiduciary duty, so the investigation.
Caraco Pharmaceutical Laboratories, Ltd. (AMEX:CPD) faces a securities class action lawsuit over alleged violations of Federal Securities Laws. An investor in Caraco Pharmaceutical Laboratories has filed a proposed securities class action lawsuit in the United States District Court for the Eastern District of Michigan behalf of certain investors of Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD) over potential claims against Caraco Pharmaceutical Laboratories, Ltd. (AMEX:CPD), concerning possible securities violations related to public statements made by the Company between May 29, 2008 and June 25, 2009. According to the complaint the plaintiff alleges that Caraco Pharmaceutical Laboratories and certain of the its executive officers violated federal securities laws by knowing or recklessly disregarding May 29, 2008 and June 25, 2009 that their public statements concerning Caraco Pharmaceutical Laboratories’s business, operations, and prospects were materially false and misleading. U.S. authorities have seized all medicines produced by generic drug maker Caraco Pharmaceutical Laboratories Ltd (CPD.A) following repeated violations of manufacturing standards according to health officials. Subsequently an investigation by a law firm on behalf of long term investors concerning allegedly false and misleading statements and material omissions between May 29, 2008 and June 25, 2009 by Caraco Pharmaceutical, and reports that on June 25, 2009 was announced. Caraco Pharmaceutical Laboratories, Ltd. announced on Thursday, June 25, 2009, that U.S. Marshals, at the request of the FDA, arrived and seized drug products manufactured in its Michigan facilities and that the seizure also included ingredients held at these same facilities, but that products distributed by Caraco that are manufactured outside of these facilities are not impacted. The FDA's inspection of Caraco Pharmaceutical Laboratories, Ltd.'s Detroit facility, completed in May 2009, found unresolved violations of cGMP requirements as previously disclosed in last SEC filing on Form 10-K filed June 15, 2009, so Caraco Pharmaceuticals in its press release. According to the FDA, the seizure followed Caraco Pharmaceutical’s continued failure to meet the FDA’s current Good Manufacturing Practice requirements, which assure the quality of manufactured drugs. The FDA said in a statement that "This action follows Caraco's continued failure to meet" manufacturing standards that assure drug quality and the FDA through the seizure seeks “to stop the firm from further distributing drugs until there is assurance that the firm complies with good manufacturing requirements.". The company was warned about manufacturing problems in an FDA letter sent in October 2008, said FDA consumer safety officer David Jaworski. On this news, so the investigation, shares of Caraco stock plummeted over 40%. Shares of Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD) fell on Thursday June 25, 2009 from $4.30 per share to $1.93 per share, and closed at $2.39 per share on June 25, 2009. Since January 2009, Caraco has had to initiate voluntary recalls of drug products to protect the public from potentially defective medications and the recalls involved manufacturing defects, including oversized tablets and possible formulation error, so the investigation. FDA officials advised Consumers now taking medicines made by Caraco should not stop since any defective drugs have come off the market in a series of recalls since January.
On June 26, 2009 Caraco Pharmaceutical Laboratories announced that the products in its inventory related to the FDA action are currently being identified and the early estimated value of this inventory is in the range of $15 to $20 million. In addition Caraco announced that it expects that with a cash balance as of June 25, 2009 of approximately $64 million which includes a loan of $18 million Caraco’s financial position will allow Caraco the time to resolve its pending FDA issues. Caraco Pharmaceutical Laboratories, Ltd., Detroit, MI, is engaged in the business of developing, manufacturing, marketing and distributing generic and private-label pharmaceuticals to wholesalers, distributors, warehousing and non-warehousing chain drugstores and managed care providers, throughout the United States and Puerto Rico. Caraco Pharmaceutical Laboratories reported $350.37million in Total Revenue with a net income of $35.39million in 2007 and $337.18million in Total Revenue with a net income of $20.54million in 2008. Shares of Caraco Pharmaceutical Laboratories Ltd. (Public, AMEX:CPD) closed on Friday, June 26, 2009 at $3.39 per share, down from a 52weekHigh of $16.40 per share and $18.50 per share in April 2008.
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