SAN FRANCISCO, Sept. 30, 2020 /PRNewswire/ — Today, leading shareholder rights law firm Hagens Berman filed a securities fraud class action in the U.S. District Court for the District of Minnesota against Tactile Systems Technology (NASDAQ: TCMD) and certain of the Company’s current and former senior executives (collectively, “Defendants”) on behalf of investors in Tactile securities between May 7, 2018 and June 8, 2020 (the “Class Period”) for violations of federal securities laws.
If you are a shareholder who has suffered a material loss on your Tactile investment, submit your losses now.
The complaint filed by Hagens Berman is the first and only action filed on behalf of Tactile investors, and is based on an extensive proprietary investigation and a careful evaluation of the merits of this case.
Tactile’s Alleged Fraud:
Headquartered in Minneapolis, Minnesota, Tactile is a medical technology company that develops and provides medical devices for the at home treatment of lymphedema and venous insufficiency. A material portion of Tactile’s annual revenues come in the form of reimbursement from public third party payers, such as Medicare, the Veterans Administration and certain Medicaid programs in the United States. Accordingly, Tactile’s compliance with applicable federal and state rules and public payer regulations is critical to the Company’s success.
Based on a proprietary investigation conducted by Hagens Berman, the complaint alleges that Defendants violated the securities laws by misrepresenting and concealing that: (1) while Tactile publicly touted a $4 plus billion or $5 plus billion market opportunity, in truth, the total addressable market for Tactile’s medical devices was materially smaller; (2) to induce sales growth and share gains, Tactile 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 Tactile’s claims and criminal and civil liability; (4) Tactile’s revenues were in part the product of unlawful conduct and thus unsustainable; and that as a result of the foregoing, (5) Defendants’ public statements, including its year-over-year revenue growth and the purported growth drivers, were materially false and misleading at all relevant times.
The truth began to emerge on March 20, 2019, when an amended federal Qui Tam complaint filed against Tactile by one of the Company’s competitors was unsealed, which contained detailed allegations of illegal sales practices on the part of Tactile, causing the Company to submit fraudulent claims to Medicare and the VA. Then, on February 21, 2020, the court issued an order in the Qui Tam Action, denying Tactile’s motion to dismiss in its entirety. Finally, on June 8, 2020, research firm OSS Research published a scathing report about the Company, accusing Tactile of using a “‘daisy-chaining’ kickback scheme that has resulted in rampant overprescribing and rapid market share gains at the expense of patients, insurers and the public.” All told, these disclosures caused Tactile securities to decline precipitously, wiping out significant shareholder value.
If you are a shareholder who purchased TCMD securities during the class period, you have until Nov. 30, 2020, to ask the Court to appoint you as Lead Plaintiff for the class. A copy of the Complaint can be obtained here. Click here to discuss your legal rights with Hagens Berman.
“We’re focused on investors’ losses and proving Tactile deceived investors by engaging in illegal marketing schemes to induce sales growth,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
Lead Plaintiff Process: The Private Securities Litigation Reform Act of 1995 permits any investor who purchased TCMD securities during the Class Period to seek appointment as lead plaintiff. A lead plaintiff acts on behalf of all other class members in directing the litigation. The lead plaintiff can select a law firm of its choice. An investor’s ability to share in any potential future recovery is not dependent upon serving as lead plaintiff. If you wish to serve as Lead Plaintiff for the Class, you must file a motion with the Court no later than Nov. 30, 2020, which is the first business day on which the U.S. District Court for the District of Minnesota is open that is 60 days after the publication date of Sept. 29, 2020. 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.
Whistleblowers: Persons with non-public information regarding Tactile should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email (email protected).
About Hagens Berman
Hagens Berman is a national law firm with nine offices in eight cities around the country and eighty attorneys. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes is located at hbsslaw.com. For the latest news visit our newsroom or follow us on Twitter at @classactionlaw.
Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP