Biolase (NSDQ:BLTI) is facing a lawsuit brought by shareholders accusing the company of hiding problems by lying on quarterly earnings reports. The lawsuit claims Biolase and its directors concealed liquidity and solvency issues as well as under-performing sales.
The class action claims that Biolase was lying on earnings reports during the better part of 2013. The plaintiffs want the company and a handful of executives to repay investors who purchased shares in the company under false pretenses during that time.
The trouble started for Biolase when the company announced its quarterly earnings for the period ended June 30, 2013, which revealed violations of credit line agreements. The news sent Biolase share prices down $1.61 per share, or 47%, within 5 days of publishing the report.
On Aug. 14 Seeking Alpha published an analysis that accused Biolase of misleading investors about the full extent of its financial woes, causing shares to drop more than 33% to close at $1.20 by the end of that day.
The law firm Pomerantz Grossman Hufford Dahlstrom & Gross LLP is now asking any investors who purchased Biolase shares from November 5, 2012 to August 7, 2013 to come forward and join the class action.
The firm said Biolase’s "financial statements were false and misleading at all relevant times," according to a press release.