Owlet Failed To Disclose Its Smart Sock Devices Would Need FDA Approval, Says Class Action

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

Owlet Smart Sock Baby Monitors Class Action Lawsuit Overview: 

• Who: An investor, Michael J. Butala, filed a class action lawsuit against Owlet, Inc., and eight of the company’s executives.
• Why: Butala claims Owlet failed to disclose to investors that it would likely need FDA approval to continue selling its Smart Sock baby monitors.
• Where: The class action lawsuit was filed in California federal court.

Owlet, Inc., sold Smart Sock baby monitors without the necessary premarket clearance or approval, harming investors when the truth came out, a new class action lawsuit alleges.

Plaintiff Michael J. Butala claims Owlet failed to get approval from the U.S. Food and Drug Administration (FDA) before selling the Smart Sock baby monitors, which  are classified as a medical device. 

Owlet’s stock price dropped 23% on Oct. 4 after the company revealed it had received a warning letter from the FDA about the devices, which purport to be able to track an infant’s heart rate, oxygen levels, and sleep trends in real time, according to the class action lawsuit.

Butala wants to represent a nationwide Class of investors who purchased Owlet stock between March 31, 2021 and Oct. 4, 2021 and/or who held Sandbridge common stock on June 1, 2021 and were eligible to vote at a special meeting held by the company on July 14, 2021. 

Sandbridge, a special purpose acquisition company, had combined with Owlet on July 15, according to the class action lawsuit. 

Butala claims Sandbridge investors who attended the special meeting were kept in the dark about the issue and otherwise could have voted against the business combination and redeemed their shares prior to the drop. 

Owlet failed to disclose multiple material adverse facts to investors, says Butala, including that it would likely be required to obtain FDA approval for the Smart Sock devices and would need to stop selling them commercially until it did.

“As a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially misleading and/or lacked a reasonable basis,” states the class action lawsuit.

Butala claims Owlet violated multiple sections of the Securities Exchange Act of 1934. He is demanding a jury trial and requesting compensatory damages for himself and all Class Members. 

Owlet’s Smart Sock baby monitors were the subject of several class action lawsuits in 2019. One claimed the devices issued false alarms, while another consumer claimed the baby monitors didn’t work properly and could cause burns. 

Did you suffer financial injury after Owlet disclosed that it would need FDA approval for its Smart Sock baby monitors? Let us know in the comments! 

The plaintiff is represented by Pavithra Rajesh, Robert V. Prongay, and Charles Linehan of Glancy Prongay & Murray LLP. 

The Owlet Smart Sock Baby Monitors Class Action Lawsuit is Butala v. Owlet, Inc., et al., Case No. 2:21-cv-09016, in the U.S. District Court for the Central District of California.

Read About More Class Action Lawsuits & Class Action Settlements:

• Procter & Gamble’s Pampers ‘Pure’ Baby Diapers Are Mostly Petrochemicals, Not Plant-Based, Claims Class Action
• Recall Check: MaryRuth’s Liquid Probiotic for Infants Sold at Target, Amazon Recalled For Microorganism Contamination
• Gerber Baby Foods Contain Dangerous Levels of Toxic Heavy Metals, Says Class Action
• Walmart Supplier Issues Baby Food Recall Over Toxic Heavy Metal, as Class Action Lawsuits Over the Issue Pile Up