Tactile Systems Technology, Inc.
Lead Plaintiff Deadline: 11/30/2020
SUMMARY OF CASE:
A securities class action has been filed against Tactile Systems Technology, Inc. (TCMD) on behalf of all investors who purchased or otherwise acquired Tactile securities between May 7, 2018 through June 8, 2020. This case has been filed in the USDC – MN.
The complaint alleges that Defendants violated the securities laws by misrepresenting and concealing that: (1) while Tactile publicly touted a $4 plus billion or $5 plus billion market opportunity, in truth, the total addressable market for Tactile’s medical devices was materially smaller; (2) to induce sales growth and share gains, Tactile and/or its employees were engaged in illicit and illegal sales and marketing activities in violation of applicable federal and state rules and public payer regulations; (3) the foregoing illicit and illegal sales and marketing activities increased the risk of a Medicare audit of Tactile’s claims and criminal and civil liability; (4) Tactile’s revenues were in part the product of unlawful conduct and thus unsustainable; and that as a result of the foregoing, (5) Defendants’ public statements, including its year-over-year revenue growth and the purported growth drivers, were materially false and misleading at all relevant times.
The truth began to emerge on March 20, 2019, when an amended federal Qui Tam complaint filed against Tactile by one of the Company’s competitors was unsealed, which contained detailed allegations of illegal sales practices on the part of Tactile, causing the Company to submit fraudulent claims to Medicare and the VA. Then, on February 21, 2020, the court issued an order in the Qui Tam Action, denying Tactile’s motion to dismiss in its entirety. Finally, on June 8, 2020, research firm OSS Research published a scathing report about the Company, accusing Tactile of using a “‘daisy-chaining’ kickback scheme that has resulted in rampant overprescribing and rapid market share gains at the expense of patients, insurers and the public.” All told, these disclosures caused Tactile securities to decline precipitously, wiping out significant shareholder value.