Johnson & Johnson has been sued for fraud over claims it lied to investors about contamination at manufacturing plants and about the repurchase of defective Motrin tablets from store shelves by J&J-hired consultants. The shareholder suit alleges that J&J made misleading statements before disclosing contamination at plants in Puerto Rico and Pennsylvania. As previously reported, the Motrin recall is now under investigation by Congress. The Complaint also cites the April 30th recall of more than 40 types of children’s medicines. It’s alleged in the lawsuit:
As a result of the blatant, systemic, and repeated failure of Defendants to maintain proper manufacturing practices at their facilities, Defendants have been forced to issue over eight separate recalls including dozens of products and hundreds of millions of individual packages.
The lawsuit, filed in federal court in Newark, New Jersey, comes amid a U.S. criminal investigation of the recalls and a probe by a Congressional panel. The Plaintiff seeks to proceed as a class-action, or group, lawsuit for investors who bought shares between October 2008 and July 2010. It’s alleged that J&J withheld material information before its decision in April to shut down a plant in Fort Washington, Pennsylvania, where contamination led to the unpublicized recall of defective Motrin tablets in 2009. The purchases by J&J have been labeled a “phantom recall.”
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