An investor class action lawsuit has been filed against Cooper Cos. over a massive CooperVision contact lens recall issued earlier this year, after users experienced problems ranging from hazy vision to torn corneas.
The complaint was filed in U.S. District Court for the Northern District of California on November 28, seeking class action status to represent anyone who bought Cooper stock between March 4 and November 15.
According to allegations raised in the contact lens recall class action, CooperVision’s parent company, Cooper Cos., artificially inflated its stock value by downplaying problems with the contact lenses and failing to take sufficient steps to make sure the public was aware of the recall.
An Avaira contact lens recall was initiated in August for about 778,000 Avaira Toric contact lenses after the manufacturer discovered that consumers were experiencing problems.
In October, the FDA criticized CooperVision for failing to provide details about the reported problems and for issuing the recall so secretively that most consumers were unaware of the risk. The contact lens recall was subsequently classified by the FDA as a Class 1 medical device recall; a classification reserved for defective devices that the FDA believes are likely to cause serious injury or death.
CooperVision expanded the contact lens recall in November, adding millions of Avaira Sphere contacts to the earlier recall amid additional reports of complications. It was determined that the issues were caused by silicon oil residue left on the lenses during the production process.
As the depth of the problems were revealed to investors and the public, Cooper Cos. stock value plummeted, causing investors to suffer substantial losses, according to the class action suit.
The complaint claims that company executives, including Chief Executive Officer Robert S. Weiss and Chief Financial Officer Eugene J. Midlock sold off millions of dollars in company shares despite knowing of the growing problem with the contact lenses, and then boosted its expectations for 2011 revenues by downplaying the recall, artificially inflating the value of the company’s stock.
CooperVision officials have indicated that they plan to set aside about $23 million to pay costs associated with the recall, with $9 million of that to designated to cover costs associated with the expansion.
Production of the CooperVision contact lenses has been stopped so that the company can fix problems that may be allowing silicon oil to contaminated the lenses. The manufacturer estimates that Avaira Toric contact lenses will be shipping in normal amounts again this month.