Questcor Securities Fraud Class Action Lawsuit

Questcor Securities Fraud Class Action Lawsuit

By Matt O’Donnell

A class action lawsuit has been filed on behalf of investors who purchased stock for Questcor Pharmaceuticals, Inc. between April 26, 2011 and September 21, 2012. The class action securities fraud lawsuit accuses Questcor of misleading investors about the company’s primary product, H.P. Acthar Gel, an injectable drug approved by the FDA to treat 19 conditions, including multiple sclerosis (MS), nephrotic syndrome and infantile spasms.

The Questcor securities fraud class action lawsuit charges Questcor (NASDAQ: QCOR) and some of its officers and directors of violating the Securities Exchange Act by making false and misleading statements about the effectiveness of Acthar as a treatment for MS and nephrotic syndrome, “making it impossible for shareholders to gain a meaningful or realistic understanding of the drug’s prospects and market success.”

As a result of Questcor’s allegedly misleading statements, Questcor’s stock traded at artificially inflated prices during the Class Period, reaching a high of $57.64 per share on July 9, 2012, the class action lawsuit says.

However, starting on September 19, 2012, a number of announcements were made that caused Questcor’s stock to tumble. This was the date that Citron Research reported that Aetna, Inc., one of the nation’s largest insurers, had recently revised its policy concerning Acthar, which would severely limit insurance coverage of Acthar. This was based on a review by Aetna of the 19 conditions the FDA had approved Acthar to treat, which determined that clinical research supported only one of the 19 conditions — West syndrome, a rare condition that causes infantile spasms.

On this news, Questcor’s stock plummeted $24.17 per share to close at $26.35 per share on September 19, 2012, a one-day decline of 48%.

Then, on September 24, 2012, Questcor announced that the U.S. government had initiated an investigation into the company’s promotional practices. After this news, Questcor’s stock dropped $11.05 per share to close at $19.08 per share, a one-day decline of 37%.

The Questcor securities fraud class action lawsuit is seeking to represent all investors who purchased Questcor stock between April 26, 2011 and September 21, 2012 and suffered losses as a result of the company’s alleged misconduct.

Were you a victim of stock fraud, securities fraud or investment fraud? You may have a case to file class action lawsuit against the parties responsible. Visit the Securities Fraud, Stock Fraud Investment Class Action Lawsuit Investigation for details.

Updated October 3rd, 2012

All securities fraud class action and lawsuit news updates are listed in the Stocks & Securities section of Top Class Actions