LOS ANGELES, Oct. 21, 2020 /PRNewswire/ -- The Law Offices of Frank R. Cruz announces that a class action lawsuit has been filed on behalf of persons and entities that purchased or otherwise acquired Tactile Systems Technology, Inc. ("Tactile" or the "Company") (NASDAQ: TCMD) securities between May 7, 2018 and June 8, 2020, inclusive (the "Class Period"). Tactile investors have until November 30, 2020 to file a lead plaintiff motion.
If you are a shareholder who suffered a loss, click here to participate.
On March 20, 2019, an amended Qui Tam complaint against Tactile was unsealed, alleging that the Company illegally paid hospital staff to induce physicians to prescribe its medical devices and had submitted fraudulent claims to Medicare and Veteran's Administration ("VA").
On this news, Tactile's share price fell $4.53 per share, or over 7%, over two consecutive trading sessions to close at $55.57 per share on March 22, 2019.
Then, on February 21, 2020, the court denied Tactile's motion to dismiss the Qui Tam complaint in its entirety. Analysts warned that "[o]nly two options remain—either this qui tam gets settled out of court, or it goes to discovery."
On this news, Tactile's share price fell $6.65 per share, or over 10%, to close at $56.09 per share on February 24, 2020.
On June 8, 2020, OSS Research issued a report on alleging that "the true source of Tactile's growth" is "a kick-back scheme that has resulted in rampant overprescribing." The OSS Research report also alleged that "Medicare has recently launched an industry-wide audit in which Tactile has been disproportionately targeted. 70% of Tactile's claims audited so far have been retroactively denied."
On this news, Tactile's share price fell $6.05 per share, or over 11%, to close at $45.67 per share on June 9, 2020, thereby injuring investors.
The complaint alleges that Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company's business, operations, and prospects. Specifically, Defendants failed to disclose to investors that: (1) while Tactile publicly touted a $4 plus billion or $5 plus billion market opportunity, in fact, the total addressable market for Tactile's medical devices was materially smaller; (2) to induce sales growth and share gains, the Company and/or its employees were engaged in illicit and illegal sales and marketing activities in violation of applicable federal and state rules and public payer regulations; (3) the foregoing illicit and illegal sales and marketing activities increased the risk of a Medicare audit of the Tactile's claims and criminal and civil liability; (4) Tactile's profits were in part the product of unlawful conduct and thus unsustainable; and that as a result of the foregoing, (5) the Companys' public statements, including its year-over-year revenue growth and the purported growth drivers, were materially false and misleading at all relevant times; and (6) that, as a result of the foregoing, the Defendants' statements about the Company's business, operations, and prospects were materially misleading and/or lacked a reasonable basis.
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If you purchased Tactile securities during the Class Period, you may move the Court no later than November 30, 2020 to ask the Court to appoint you as lead plaintiff. To be a member of the Class you need not take any action at this time; you may retain counsel of your choice or take no action and remain an absent member of the Class. If you purchased Tactile securities, have information or would like to learn more about these claims, or have any questions concerning this announcement or your rights or interests with respect to these matters, please contact Frank R. Cruz, of The Law Offices of Frank R. Cruz, 1999 Avenue of the Stars, Suite 1100, Los Angeles, California 90067 at 310-914-5007, by email to firstname.lastname@example.org, or visit our website at www.frankcruzlaw.com. If you inquire by email please include your mailing address, telephone number, and number of shares purchased.
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SOURCE The Law Offices of Frank R. Cruz, Los Angeles