A California federal judge has decisively sided with an insulin pump maker, dismissing a lawsuit alleging that the company misled investors about its growth prospects amidst rising inflation and competitive pressures. The dismissal, albeit with an option to amend, was issued by U.S. District Judge Marilyn L. Huff on Monday. This pivotal ruling comes after investors accused Tandem Diabetes Care Inc. of painting an overly optimistic picture of its financial trajectory during a tumultuous economic period.
Insulin Pump Maker Wins Toss of Investor Suit For Now: Details of the Dismissed Suit
The legal challenge was initiated by co-lead plaintiffs Mason Raines, Thomas Martel, and Linna Rae Martel, who claimed significant financial losses when Tandem’s share prices plummeted more than 30% in a single day in November 2022. This sharp decline occurred after Tandem revised its annual sales forecast downwards from $845 million to $805 million, citing pandemic-related challenges, heightened competition, and escalating inflation. Earlier in August 2022, Tandem had projected a sales increase to as much as $845 million, indicating a 20% rise from the previous year.
Insulin Pump Maker Wins Toss of Investor Suit For Now: Judge Refutes Allegations Against Tandem
Judge Huff’s order articulated that the plaintiffs had not sufficiently demonstrated any misleading or false statements, nor had they established a credible inference of scienter— a legal term indicating knowledge of wrongdoing—against Tandem or its executives. The plaintiffs’ reliance on statements from two former employees was particularly criticized by the judge, who noted their lack of reliability and detailed knowledge of Tandem’s operations.
