Hospira Inc., a global pharmaceutical company, has agreed to pay $60 million to settle a class action lawsuit accusing the company of violating securities laws. It was alleged that by providing misleading positive statements share prices were artificially inflated despite problems at the company’s manufacturing plant. The lead Plaintiffs in the class action are asking for court approval of the settlement in an Illinois federal court. This settlement came with Hospira after negotiations before a mediator. The agreement, if approved by the court, will end the litigation that has been ongoing since 2011. Hospira agreed to pay $60 million into a fund benefiting the class members.
The lawsuit was filed by a group of pension fund investors, including Sheet Metal Workers’ National Pension Fund, KBC Asset Management NV, Heavy & General Laborers’ Locals 472 & 172 Pension & Annuity Funds, and Roofers Local No. 149 Pension Fund The Plaintiffs alleged that Hospira, which has a portfolio of more than 200 generic injectable products, issued materially false and misleading statements. It was alleged further that Hospira “touted to investors [its] ability to streamline its process and practices in order to boost the company’s long-term profitability and increase the return for Hospira shareholders.”
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