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Puma Biotechnology Found Guilty of Securities Fraud, but What Will the Recovery Be?

Rare Jury Verdict for Puma Biotechnology Investors



Case name: Puma Biotechnology

Verdict award: Up to $4.50 per damaged share, total award TBD

Claim filing deadline: 1/28/2020

Class period: 7/22/2014 – 5/29/2015

 

This week saw the rarest of rarities, a veritable solar eclipse of the securities class action world: claim forms in the wake of a verdict. In the past 10 years, there has been one verdict (this one) and over 1100 settlements.

The main reason corporations settle securities class actions is, of course, that the cost of litigation can be too expensive even if they believe they could win the case. In addition to that, corporations risk paying enormous damages should a jury rule against them. Where in a securities settlement the corporation may pay a small percentage per damaged share, a verdict against a corporation could mean full or nearly full damages. This is what happened in the Household International Securities Litigation, which went all the way to the Supreme Court and ended with the company paying $1.575 billion to investors.

So understandably, after the Puma Biotechnology verdict came down the lead plaintiffs’ attorneys at Robbins Gellar Rudman & Dowd sent out a press release declaring victory. The release quoted one attorney saying, “It’s hard to overstate the significance of this verdict…”

And yet a competing press release by the defendants’ attorneys at Latham & Watkins did just that, and in no less emphasis than ALL CAPS: “JURY REACHES VERDICT IN FAVOR OF LATHAM CLIENT PUMA BIOTECHNOLOGY IN SECURITIES CLASS ACTION TRIAL.”

BUH? But the other press release said that “Puma Biotechnology, Inc. and its CEO, Alan H. Auerbach, committed securities fraud and awarding shareholders up to $100 million in damages”! This one says the jury “reached a unanimous verdict… awarding a miniscule damages.”

So is it $100 million? Or miniscule?

Jenna Greene of Law.com wrote about these competing press releases this past February and noted that “declaring victory in this case has more to do with what you want to emphasize: the moral high ground or cold, hard cash. Based solely on the docket entry, the outcome looks like a definite win for Robbins Geller,” whereas to Latham, they kept this case from having a Household International price tag for their clients.

As to whether it is $100 million of a more “miniscule” range of $9 million to $18 range, as the defendants claim, will be determined as the recovery process plays out.

Chicago Clearing is now preparing claims in the Puma Biotechnology litigation. If you think you may have a claim, give us a call today.


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