NEW YORK (GenomeWeb News) – Sequenom today said that the US District Court for the Southern District of California has approved the settlement reached in a class action suit brought by shareholders of the firm.
Under the settlement, Sequenom agreed to pay shareholders $14 million, and it agreed to issue to the plaintiffs a number of shares of Sequenom common stock.
Sequenom shareholders Leon Ries and Michelle Finlayson filed the suit against Sequenom in November on behalf of other company shareholders.
The suit, which named as defendants the company and several individual current and former executives, related to the mishandling of data surrounding SEQureDx, a non-invasive test for fetal gene and chromosome abnormalities being developed by the company.
Specifically, the plaintiffs alleged breach of fiduciary duties against a number of current and ex-officials, and leveled charges of insider stock trading against a former official who allegedly sold more than 22,000 shares of his personally held Sequenom stock just prior to the company issuing a press release last April detailing the data mishandling.
News of the data mishandling, which followed some 14 instances of the company allegedly providing false information such as positive scientific data about the progress of the test, caused Sequenom's stock price to plunge to $3.62 per share from $14.91 per share, an approximate market capitalization loss of $687 million, according to the suit.
Shares of Sequenom were down 3 percent at $5.82 in early Wednesday trade on the Nasdaq.