A probe by the U.S. District Attorney for Massachusetts into Boston Scientific‘s (NYSE:BSX) cardiac rhythm management unit has been put to bed, the medical device company said yesterday.
The Bay State DA’s office sent a subpoena to Natick, Mass.-based Boston Scientific in March 2010, "relating to the former Market Development Sales Organization that operated within our CRM business," according to a regulatory filing.
In October of the next year the DA’s office unsealed a whistleblower’s lawsuit alleging that Boston Scientific and its then-management team misled investors over the state of its cardiac rhythm management business following the ill-starred acquisition of Guidant Corp. in 2006.
The securities class action suit, filed in the U.S. District Court for Massachusetts, accused former CEOs James Tobin and Ray Elliott and then-COO Sam Leno of hiding Guidant’s problems between April 20, 2009, and March 12, 2010. Citing SEC filings and statements the executives made in press releases and during conference calls with analysts, the suit accused the company and its executives of making calculated, falsely rosy statements about the CRM division designed to artificially boost Boston Scientific’s share prices.
The suit also cited the November 2009 departure of the CRM division’s senior sales and marketing executive, William McConnell Jr., and Elliott’s move to cashier several BSX sales staff and managers from its CRM division in Minnesota.
But the U.S. Court of Appeals for the 1st Circuit affirmed a lower court’s dismissal of the case in July 2012, setting the stage for the Commonwealth’s DA’s office to make its decision. Yesterday Boston Scientific said the office let it know that the case is over.
"On October 30, 2013, the U.S. Attorney’s office informed us that the government was discontinuing its investigation," according to the filing. The deadline for an appeal of the securities lawsuit lapsed August 29, the company said.
