January 16, 2020 - An amended complaint was filed.
July 15, 2019 - An investor in shares of Reckitt Benckiser Group plc (OTC: RBGLY) filed a lawsuit in the U.S. District Court for the District of New Jersey over alleged violations of Federal Securities Laws by Reckitt Benckiser Group plc in connection with certain allegedly false and misleading statements made between July 28, 2014 and April 9, 2019.
London based Reckitt Benckiser Group plc manufactures, markets, and sells health, hygiene, and home products. On July 24, 2017, the Company announced in connection with its second quarter 2017 financial results, that it had recorded a £318 million charge related to ongoing U.S. Department of Justice and U.S. Federal Trade Commission investigations into its former Reckitt Pharma operations.
On February 19, 2018, Reckitt announced, in connection with its full year 2017 financial results, that it had recorded an exceptional charge of £296 million due to the investigations, and that the investigations now also involved the California Department of Insurance.
On April 9, 2019, the DOJ filed a criminal indictment against Reckitt Pharma (now known as Indivior), which detailed a multi-billion-dollar scheme to defraud the public and the Company’s investors through the marketing and sale of Suboxone Film.
Ultimately, Reckitt agreed to settle the federal investigations into its marketing and sale of Suboxone Film for $1.4 billion.
According to the complaint the plaintiff alleges on behalf of purchasers of Reckitt Benckiser Group plc (OTC: RBGLY) common shares between July 28, 2014 and April 9, 2019, that the defendants violated Federal Securities Laws.
More specifically, the plaintiff claims that between July 28, 2014 and April 9, 2019, the Reckitt and its most senior executives perpetrated a scheme, which generated over $3 billion in proceeds, to facilitate opiate abuse among U.S. consumers and mislead investors and the public regarding the health and safety risks of Reckitt’s new key opiate product, Suboxone Film.
the complaint alleges that in order to maintain and grow profits, senior executives at Reckitt devised a plan to switch prescribers from Suboxone Tablets to the Company’s new proprietary treatment, Suboxone Film. Suboxone Film had similar active ingredients to Suboxone Tablets, however it was dispensed in a thin film placed under the tongue and stored in single-use foil wrappings. Executives planned to create a marketing campaign that touted the purported safety benefits of Suboxone Film over Suboxone Tablets in order to prevent generic competition. Key to this campaign was fabricating safety concerns with existing treatments in order to delay the entry and approval of generics for Suboxone Tablets. Defendants’ scheme to fraudulently inflate sales of Suboxone Film was a success. Between 2010 and 2014, the Company’s revenues from sales of the drug increased ten-fold to over $840 million annually.