KO&L HAS FILED A CLASS ACTION LAWSUIT AGAINST ARTHROCARE CORPORATION ON BEHALF OF COMMON STOCK PURCHASERS AND AND CERTAIN TRADERS IN ARTHROCARE OPTIONS
KO&L has filed a class action lawsuit against ArthroCare Corporation ("ArthroCare" or the "Company") (Nasdaq: ARTC - News) and certain of its officers in the U.S. District Court for the Western District of Texas on behalf of all persons or entities who purchased the common stock of ArthroCare from January 24, 2008 through July 18, 2008 (the "Common Stock Purchaser Class Period") and all persons or entities who purchased call options or sold put options in ArthroCare common stock from October 27, 2006 through July 18, 2008 (the "Options Holders Class Period"). As described below, if you purchased these ArthroCare publicly traded securities during the appropriate Class Period, you have 60 days from today to move to be appointed as a Lead Plaintiff.
IF YOU PURCHASED THESE SECURITIES DURING THE APPROPRIATE CLASS PERIOD DESCRIBED ABOVE, YOU ARE NOT COVERED BY ANY OTHER PENDING CLASS ACTION AGAINST ARTHROCARE.
Before the market opened on Monday, July 21, 2008, ArthroCare announced that it would be restating its previously reported financial results
from the third quarter 2006 through the first quarter 2008 because it
improperly recognized revenue from DiscoCare, Inc., State of the Art
Medical Products, Boracchia & Associates and Clinical Technology, Inc.
As a result, ArthroCare indicated that it expects ArthroCare's
reported
revenue in 2006 will be reduced by $4 million to $7 million, and that
for 2007, reported revenue will be reduced by $20 million to $25
million. Further, ArthroCare revealed on July 21, 2008 that reported
revenue for the first quarter of 2008 will be reduced by $2 million to
$5 million, and that "the restatement will result in material
reductions
in operating income and net income for the annual and quarterly
periods
being restated." The Company also disclosed that while the restatement
is being completed, a review of the Company's internal controls will
be
conducted and that further material misstatements or misconduct might
still be uncovered.
Upon that announcement, shares of ArthroCare plummeted from its
close of
$40.03 on Friday, July 18, 2008 to a close of $23.21 on July 21, 2008,
the next day of trading, on extraordinary volume -- a drop of over
42%.
On July 24, 2008, the Company disclosed that the SEC had commenced an
inquiry into the circumstances surrounding the restatement. During the
period covered by the restatement, ArthroCare's officers and directors
sold nearly $12 million worth of their personal holdings in
ArthroCare.
The Complaint charges ArthroCare and certain of its officers with
violations of the Securities Exchange Act of 1934. Specifically, the
Complaint alleges that the defendants: (1) falsely reported
ArthroCare's
financial results for the quarter ended September 30, 2006 through the
first quarter ended March 31, 2008; (2) falsely stated that the
Company's financial statements were prepared in accordance with
Generally Accepted Accounting Principles ("GAAP"); and (3) falsely
stated that the Company had adequate internal and financial
controls. As
a result of the foregoing, the financial statements being restated by
the Company were materially false and misleading when issued.
If you purchased ArthroCare's common stock from January 24, 2008
through
July 18, 2008, or purchased call options or sold put options in
ArthroCare common stock from October 27, 2006 through July 18, 2008,
and
sustained losses, please Contact Us or call us at 202/261-3553 for a
more thorough explanation of the claims that have been asserted
against
ArthroCare.
