Monday, 28 October 2024 04:15 PM
Class Action
NEW YORK, NY / ACCESSWIRE / October 28, 2024 / Pomerantz LLP hereby advises investors of recent developments in the class action lawsuit Cement Masons' and Plasterers' Local No. 502 Pension Fund v. InMode Ltd. , No. 24-cv-1219 (C.D. Cal.), pending in U.S. District Court alleging violations of the federal securities laws by InMode Ltd. ("InMode" or the "Company") and certain of the Company's senior executives (collectively, "Defendants"). The action is brought on behalf of all persons or entities that purchased or otherwise acquired InMode common stock between June 4, 2021, and October 12, 2023, inclusive (the "Class Period"). Pursuant to the Court's Order, as described in greater detail below, any member of the putative Class may file a motion seeking appointment as Lead Plaintiff, or otherwise challenge the appointment of the presumptive Lead Plaintiff in this action, on or before November 27, 2024.
InMode's Alleged Fraud
InMode is a global provider of aesthetic medical devices and technology, including devices purporting to offer body sculpting and other rejuvenation technologies. The Company's target customers include dermatologists, dentists, obstetricians and gynecologists, and medical spas.
The complaint alleges that, throughout the Class Period, Defendants made materially false and misleading statements and omissions concerning two topics that are of critical importance to investors: (1) the price at which InMode sells its devices, which reflects the demand for those products; and (2) InMode's compliance with U.S. Food and Drug Administration ("FDA") regulations, including the FDA's prohibition on off-label marketing of devices and the FDA's requirements for the reporting of injuries. Specifically, Defendants repeatedly touted the demand for InMode's devices and told investors that those devices were never sold at a discount. InMode also assured investors that it had "obtained [FDA] clearance for the current treatments for which we offer our products" and that "no third-party claims have been brought against us to date." As a result of these misrepresentations, the price of InMode common stock traded at artificially inflated prices throughout the Class Period.
In reality, throughout the Class Period, InMode routinely discounted the prices of its devices and violated FDA regulations by promoting the off-label use of its devices, and by failing to properly report injuries caused by its devices.
The truth began to emerge just before the market closed on February 17, 2023, when an investigative publication revealed that InMode threatened some customers with legal action over complaints made about the Company's devices and sales tactics. The customers also stated that InMode offered to replace defective products on the condition of signing confidentiality agreements with non-disparagement clauses. However, despite these disclosures, InMode continued to misrepresent the pricing of, and demand for, its products.
Then, on October 12, 2023, before the market opened, InMode lowered its full-year revenue guidance, which the Company blamed on higher interest rates, tighter leasing approval standards, and bottlenecks in loan processing. Later that same day, an investigative publication announced a forthcoming report on InMode, relating to the Company's statements to investors about pricing flexibility of products and margin consistency. After the close of trading, the publication released a story revealing that InMode significantly discounted the prices of its devices on a routine basis throughout the Class Period. As a result of these disclosures, the price of InMode common stock declined precipitously.
Appointment of a Lead Plaintiff
Pursuant to the Private Securities Litigation Reform Act of 1995, counsel for the initial plaintiff in the action published a notice advising members of the putative Class that any member wishing to serve as Lead Plaintiff must file a motion with the Court no later than April 15, 2024.
On April 15, 2024, several putative Class members filed motions seeking appointment as Lead Plaintiff, including a group of movants comprised of Meitav Provident and Pension Funds Ltd., Meitav Mutual Funds Ltd., Kranot Hishtalmut Le Morim Tichoniim Morey Seminarim Ve Mefakhim Hevra Menahelet Ltd., Kranot Hishtalmut Le Morim Ve Gananot Hevra Menahelet Ltd. (collectively, the "Funds"). After reviewing the Funds' motion, each of the previously competing Lead Plaintiff applicants stated their non-opposition to the Funds' motion.
On October 24, 2024, following a hearing on the Funds' motion, the Honorable Maame Ewusi-Mensah Frimpong, U.S.D.J., entered an Order finding the Funds to be the presumptive lead plaintiff in this action, and providing that any "any possible plaintiff may file," within thirty (30) days of the date of this notice- i.e. , on or before November 27, 2024 -"a motion or other paper challenging the [Funds'] status as presumptive lead plaintiff" of the Class in this Action.
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SOURCE: Pomerantz LLP