Medical Co. Hit With Investor Suit Over $20M Sham Financing

Law360, Philadelphia (August 7, 2013, 5:46 PM EDT) -- The officers of a Pennsylvania medical device company were hit with a shareholder suit in state court Wednesday accusing them of overseeing a sham announcement of $20 million in financing that allowed the board’s chairman to sell his own stock as part of a public offering.

Plaintiff Joseph Galagher contends that the directors of Echo Therapeutics Inc. allowed the misleading acts to occur and that the subsequent evaporation of the financing caused the value of the stock to plunge, thus harming shareholders.

A 2011 plunge in...
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