Bernstein Litowitz Berger & Grossmann LLP Announces Securities Class Action Suit Filed Against Cardinal Health, Inc. and Certain of Its Senior Executives
NEW YORK, Aug. 1, 2019 /PRNewswire/ -- Bernstein Litowitz Berger & Grossmann LLP ("BLB&G") today announced that it filed a securities class action lawsuit on behalf of its client Louisiana Sheriffs' Pension & Relief Fund ("Louisiana Sheriffs") against Cardinal Health, Inc. ("Cardinal" or the "Company") (NYSE: CAH), and certain of the Company's senior executives (collectively, "Defendants"). The action, which is captioned Louisiana Sheriffs' Pension & Relief Fund v. Cardinal Health, Inc., No. 2:19-cv-03347-EAS-EPD (S.D. Ohio), asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 on behalf of all purchasers of Cardinal common stock between March 2, 2015 and May 2, 2018, inclusive (the "Class Period").
Cardinal is a global, integrated healthcare services and products company. This action arises from Defendants' misrepresentations and omissions relating to Cardinal's integration of Cordis Corp. ("Cordis"), a medical device manufacturer Cardinal purchased from Johnson & Johnson in March 2015, and the inventory and supply chain problems at Cordis.
The Complaint alleges that, throughout the Class Period, Defendants misled investors by stating that Cordis would benefit from Cardinal's advanced inventory management and supply chain information technology solutions. Defendants also falsely represented that the Company properly "reserve[d] for inventory obsolescence" and that "[i]nventories presented in the consolidated balance sheets [were] net of reserves for excess and obsolete inventory." As a result of these misrepresentations, Cardinal shares traded at artificially inflated prices throughout the Class Period.
The truth began to emerge on August 2, 2017, when Cardinal reported weak earnings for its fourth quarter and fiscal year 2017 and lowered its earnings guidance for fiscal year 2018 due in part to "higher-than-planned write-offs for excess inventory" at Cordis. Defendants, however, falsely assured Cardinal's investors that Cordis's operational deficiencies had been addressed, that the Company had built the necessary infrastructure and IT systems for Cordis such that it now had "visibility" of Cordis's inventory, and that the Cordis business was "going into a phase of a lot more stability." Despite Defendants' attempt to soften Cordis's poor performance, the price of Cardinal stock declined from a closing price of $77.33 per share on August 1, 2017, to a closing price of $70.99 per share on August 2, 2017.
Then, on May 3, 2018, Cardinal announced disappointing results for its third quarter fiscal year 2018 and cut its fiscal year 2018 earnings guidance. The Company explained that the "biggest variable driving these results" was the "disappointing performance" of the Cordis business. Contrary to the Company's prior statements that it had visibility into Cordis's inventory and that the Company properly reserved for obsolete inventory, the Company revealed that after launching a new global supply chain IT platform over the last quarter at Cordis, it discovered millions of dollars of unsellable and expired heart stents and catheters stationed overseas that had to be written off. As a result of these disclosures, the price of Cardinal's stock declined from a closing price of $64.65 per share on May 2, 2018, to a closing price of $50.80 per share on May 3, 3018.
A copy of the complaint filed in this action is available on BLB&G's website at www.blbglaw.com.
If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than September 30, 2019, which is the first business day on which the U.S. District Court for the Southern District of Ohio is open that is 60 days after the publication date of August 1, 2019. Any member of the proposed Class may move the Court to serve as Lead Plaintiff through counsel of their choice. Members may also choose to do nothing and remain part of the proposed Class.
Louisiana Sheriffs is represented by BLB&G, a firm of over 100 attorneys with offices in New York, California, Louisiana, Illinois, and Delaware. If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact Avi Josefson of BLB&G at 212-554-1493, or via e-mail at avi@blbglaw.com.
Since its founding in 1983, BLB&G has built an international reputation for excellence and integrity. Specializing in securities fraud, corporate governance, shareholders' rights, employment discrimination, and civil rights litigation, among other practice areas, BLB&G prosecutes class and private actions on behalf of institutional and individual clients worldwide. Unique among its peers, BLB&G has obtained several of the largest and most significant securities recoveries in history, recovering billions of dollars on behalf of defrauded investors. More information about BLB&G can be found online at www.blbglaw.com.
CONTACT:
Avi Josefson
Bernstein Litowitz Berger & Grossmann LLP
1251 Avenue of the Americas, 44th Floor
New York, New York 10020
(212) 554-1493
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Company Codes: NYSE:CAH