SAN DIEGO & CARLSBAD, Calif.--(BUSINESS WIRE)-- Shareholder rights law firm Robbins Arroyo LLP announces that purchasers of Obalon Therapeutics, Inc. (NasdaqGM: OBLN) have filed a class action complaint against the company's officers and directors for alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934 pursuant to the company's October 5, 2016 initial public offering ("IPO") and/or between October 5, 2016 and January 23, 2018. Obalon develops and sells medical devices to treat obese and overweight people by facilitating weight loss.
View this information on the law firm's Shareholder Rights Blog:
Obalon Accused of Implementing Inadequate Internal Controls Over Financial Reporting
According to the complaint, on October 5, 2016, Obalon held its initial public offering, issuing 5,000,000 shares and raising net proceeds of approximately $67.2 million. Obalon then attested in its prospectus and other public filings that its financial statements were prepared in accordance with United States generally accepted accounting principles. Obalon also emphasized substantial revenue growth and improvements in its gross margin in its financial reports throughout the class period. It therefore came as a surprise when Obalon revealed on January 23, 2018, that a whistleblower contacted KPMG LLP, the company's independent auditors, to allege that Obalon had improperly recognized revenue during the company's fourth fiscal quarter of 2017. As a result, Obalon canceled its previously announced offering of 5,454,545 shares of its common stock at a price of $5.50 per share and said that its Audit Committee would investigate the allegations. On this news, Obalon's stock fell $1.73 to close at $3.46 on January 23, 2018, representing a nearly 77% decline from its IPO price of $15.00.
Obalon Shareholders Have Legal Options
If you would like more information about your rights and potential remedies, contact attorney Leonid Kandinov at (800) 350-6003, LKandinov@robbinsarroyo.com, or via the shareholder information form on the firm's website.
Robbins Arroyo LLP is a nationally recognized leader in shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.
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Source: Robbins Arroyo LLP