Johnson & Johnson, the world’s largest maker of health care products, has agreed to pay $22.9 million to settle a lawsuit claiming it misled investors about quality-control failures that led to recalls. The proposed settlement, filed on July 15 in federal court in Trenton, N.J., would resolve claims that the failures led to the largest recall of over-the-counter children’s medicine in U.S. history, a plant closing and a congressional probe. The class-action settlement requires court approval.
The case focused on recalls of over-the-counter drugs made by J&J’s McNeil Consumer Healthcare division in Las Piedras, Puerto Rico, and Fort Washington, Penn. Investors claimed that J&J and its executives made misleading statements about details of the recalls and that they suffered stock losses after the true reasons for the recalls became public.
If you guessed that “J&J will make no admission of wrongdoing,” you are 100 percent correct. The settlement would cover buyers of J&J shares between Oct. 14, 2008, and July 21, 2010. It came after mediation by a retired judge, Daniel H. Weinstein. The case is Monk v. J&J in the U.S. District Court, District of New Jersey (Trenton).
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