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Oklahoma City, OK (September 30, 2020) – On September 29, 2020, a securities class action lawsuit was filed in the United States District Court for the District of Minnesota against Tactile Systems Technology, Inc. (NASDAQ: TCMD). The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, including allegations of issuing a series of material or false misrepresentations to the market which had the effect of artificially inflating the market price during the Class Period, which is May 7, 2018 through June 8, 2020. More specifically, the complaint alleges that Defendants throughout the class period made false and/or misleading statements and/or failed to disclose 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. On this news, the Company’s stock price fell $6.05, or 11.69%, from its June 8, 2020 opening price of $51.72 per share to a June 9, 2020 close of $45.67.
Plaintiff seeks to recover damages on behalf of all Tactile Systems Technology, Inc. shareholders who purchased common stock during the Class Period and are therefore a member of the Class as described above. You may move the Court no later than Monday, November 30, 2020 to serve as a lead plaintiff for the entire Class. However, in order to do so, you must meet certain legal requirements pursuant to the Private Securities Litigation Reform Act of 1995.
If you wish to discuss this action, obtain further information and participate in this or any other securities litigation, or should you have any questions or concerns regarding this notice or preservation of your rights, please contact: Robin Hester at firstname.lastname@example.org