Shareholders in Intuitive Surgical Inc. have filed a lawsuit alleging the company misled them about defects with its flagship product, which has been linked to 70 deaths and copious injuries, Courthouse News Service’s Securities Law Review reports.
Intuitive’s da Vinci Surgical System was introduced to the market in 1999. The system costs between $1 million and $2.3 million, and is meant to give surgeons increased vision and control while they’re performing operations.
According to the lawsuit, filed in California Superior Court by Public School Teachers’ Pension and Retirement Fund of Chicago, the plaintiffs claim Intuitive’s top officers issued false statements regarding the safety of the da Vinci system from Oct. 11, 2011 to July 18, 2013, which caused the company’s stock to trade at artificially inflated prices.
Intuitive grew 61 percent from the end of February 2010 to a market value of $21.7 billion by March 2013, according to the lawsuit, even though it had been receiving complaints about defects in the da Vinci system since 2010.
The complaint alleges that Intuitive’s executives played down, underreported and concealed reports of serious injuries caused by the da Vinci system from the Food and Drug Administration. Intuitive allegedly went so far as to carry out “secret corrective action,” in clear violation of FDA regulations.
“Not only were defendants aware of the da Vinci system being used for unapproved procedures, but defendants did not have in place or implement appropriate internal controls and procedures for reporting these defects to the FDA or disclosing them to the company’s shareholders,” the complaint says, according to CNS Securities Law Review.
Several Intuitive directors and executives also sold over 400,000 shares they personally held in Intuitive stock at a profit of more than $225 million, the complaint alleges.
CNS Securities Law Review reports that Intuitive is now facing over 76 individual product liability lawsuits, according to its 2013 Annual Report, and the stock declined to $466.18 per share on April 19, 2013 from $583.67 per share on Feb. 1, 2013.