Law firm, Shalov Stone Bonner & Roccohas has filed a lawsuit seeking a class action status (on behalf of purchasers of the securities of Caraco) in US District Court for the Eastern District of Michigan against Caraco between May 29, 2008 and June 25, 2009, inclusive.
The complaint alleges that, throughout the Class Period, the defendants violated the federal securities laws by misrepresenting and failing to disclose material adverse facts.
More specifically, the complaint alleges that the defendants failed to disclose: that Caraco failed to meet the FDA’s current Good Manufacturing Practice (cGMP) requirements; that Caraco failed to take corrective measures to have its manufacturing facilities comply with the FDA’s cGMP requirements; that Caraco failed to remedy repeat violations of FDA regulations the FDA had previously observed and documented; that as a result of the foregoing, Caraco’s ability to gain FDA approval of pending new drug applications was considerably jeopardized; and that as a result of the above, Caraco would have to recall certain of its products.
According to the complaint, on June 25, 2009, FDA announced that because Caraco failed to meet its cGMP requirements, US Marshalls seized drug products Caraco manufactured from several of the company’s facilities.