DOYLESTOWN >> U.S. District Court Judge Michael M. Baylson on Feb. 4 ordered that the Bucks County Employees’ Retirement Fund be designated lead plaintiff in a federal securities class action case filed on behalf of investors in Malvern-based pharmaceutical giant Endo International plc.
The lawsuit alleges that Endo committed securities fraud by engaging in inherently risky and unstable generic drug pricing practices, and failing to disclose those practices and other key information to investors. As a result of Endo’s alleged wrongful acts and omissions, and the precipitous decline in the market value of Endo’s securities, class members suffered hundreds of millions of dollars in losses and damages.
Baylson also ordered Lawrence F. Stengel, former Chief Judge of the U.S. District Court for the Eastern District of Pennsylvania, to serve as lead counsel in the case. Stengel will be joined by Bucks County Solicitor Joe Khan, First Assistant County Solicitor Amy Fitzpatrick and other attorneys, whom Baylson said would handle “the bulk of the day-to-day work” in the litigation.
In a memorandum accompanying his order, Baylson expressed dissatisfaction with the previous lead plaintiff and counsel in the case, strongly indicating a need for new leadership on behalf of the plaintiffs. “Knowing Mr. Stengel for many years, this Court is quite sure that his performance as Lead Counsel will be a benefit to the class, whether win, lose or draw,” the judge wrote.
Attorneys for the Bucks County Employees Retirement Fund contended in a motion filed last month that the fund should be named lead plaintiff in part because its losses, estimated at $800,000, were the largest among all of the plaintiffs.
“We’re pleased that, notwithstanding Endo’s opposition, the Court chose Bucks to lead the fight against this pharmaceutical giant,” said County Controller Neale Dougherty, who will testify in the litigation as the chief fact witness for the Bucks County Retirement Board. “Bucks County has a significant interest in holding Endo accountable for the harm that its generic drug pricing practices caused to the retirement fund, our fellow shareholders, and the community as a whole.”
The securities class action by the retirement fund follows an earlier lawsuit filed on behalf of Bucks County against related Endo entities and other pharmaceutical companies for their alleged misconduct in creating a nationwide opioid epidemic. That litigation is pending in Pennsylvania state court.
The retirement board, composed of Dougherty, County Treasurer Kris Ballerini and Bucks County Commissioners Diane M. Ellis-Marseglia, Bob Harvie and Gene DiGirolamo, unanimously authorized the litigation in executive session Jan. 4, and Judge Baylson authorized the filing of the lead plaintiff motion on Jan. 7.