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Atlanta Pension Settles Price-Fixing Suit Against Taro Pharmaceuticals

A group of investors led by the Atlanta Firefighters’ Retirement Fund has agreed to invest $36 million settlement in connection with the securities fraud class action lawsuit against Taro Pharmaceuticals Industries Ltd.

A group of investors sued Taro Pharmaceuticals in June 2017, alleging that the company violated federal securities laws by making materially false and misleading statements and omitting to disclose competition and the cause of the sales increase. Taro was also accused of fixing prices for at least seven drugs with other generic drug companies and concealing that information from investors.

According to court documents, between 2013 and 2016, Taro “earned more than $1.5 billion through price-fixing,” which accounted for 47% of the company’s revenue during that period.

“This conspiracy was possible because drug markets were highly susceptible to collusion, particularly because they were dominated by only a few firms,” the investors wrote in their complaint.

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If approved by the court, the settlement would create a cash fund of $36 million plus accrued interest for eligible class members, before attorney fees and expenses. That amount equates to an average settlement of about $2.53 per allegedly damaged share, before deductions, according to an Atlanta Firefighters compensation expert.

Lawyers for the investors said they decided to settle due to the “cost and length” of the legal proceedings required to pursue the claims through trial and appeal, as well as the difficulty of establishing liability.

According to the settlement, approved in May by U.S. District Judge Andrew L. Carter Jr. in the U.S. District Court for the Southern District of New York, Taro continues to deny “each of the claims” brought by the investors and agreed to settle the claims “in order to avoid and eliminate the burden, expense, uncertainty and risk of further litigation.” The settlement states that it is not an admission of wrongdoing by Taro or its employees.

Representatives for Taro Pharmaceuticals were not available for comment. Its parent company, Sun Pharmaceutical Industries Ltd., did not immediately respond to a request for comment.

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Tags: Atlanta Firefighters Retirement Fund, Class Action Lawsuit, Lawsuit, Price Fixing, Settlement, Sun Pharma, Taro Pharmaceuticals