The class action against Hansen Medical, Inc. ("Hansen" or the "Company") (Nasdaq:HNSN) was brought on behalf of all persons or entities who purchased the securities of Hansen between May 1, 2008 and October 18, 2009, inclusive (the "Class Period").
The Complaint charges the Company and certain of its executive officers with violations of federal securities laws. Hansen develops products and technology using robotics for the accurate positioning, manipulation and control of catheters and catheter-based technologies. The Complaint alleges that defendants knew or recklessly disregarded that their public statements concerning Hansen's business, operations and prospects were materially false and misleading. Specifically, throughout the Class Period defendants made false and/or misleading statements and/or failed to disclose that: (1) the Company improperly recognized revenue; (2) as a result, the Company's revenue and financial results were overstated during the Class Period; (3) the Company's financial results were not prepared in accordance with Generally Accepted Accounting Principles; (4) the Company lacked adequate internal and financial controls; and (5), as a result of the above, the Company's financial statements were materially false and misleading at all relevant times.
On October 19, 2009, Hansen revealed that the audit committee of its board of directors, upon the recommendation of management, concluded that the Company's previously issued financial statements contained in its annual report on Form 10-K for the year ended December 31, 2008, and the Company's quarterly reports on Form 10-Q for the quarters ended March 31, 2008, June 30, 2008, September 30, 2008, March 31, 2009 and June 30, 2009, should no longer be relied upon because of errors arising from "potential irregularities outside of the accounting department." According to the Company, Hansen identified systems for which revenue should have been recognized in a later period than the period in which it was recognized, and revenue on systems that should have been reflected as deferred revenue on its balance sheet as of June 30, 2009.
As a result of this news, the price of Hansen shares declined $0.31 per share, more than 9%, to close on October 19, 2009, at $3.12 per share, on unusually heavy trading volume.
