Product Liability Attorney Blog

The Food and Drug Administration has urged health care professionals to carefully consider whether the benefits of prescribing the antibiotic drug Levaquin are outweighed by the risks.

Those risks include pain, swelling, inflammation and tears of the tendons including the shoulder, hand and Achilles located at the back of the ankle. The odds that a patient will experience a debilitating and painful tendon tear or tendinitis are increased if the patient is over the age of 60, taking steroids, and a kidney, heart or lung transplant. Patients may experience tendinitis or tendon rupture while taking Levaquin or long after drug therapy has ended.

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According to a report released by the nonprofit Institute for Safe Medication Practices, the U.S. Food and Drug Administration received a record number of adverse drug-reaction reports in the first quarter of 2008.

The FDA received almost 21,000 serious adverse reactions in the first three months of 2008, including 4,800 deaths.

Chantix, Pfizer’s anti-smoking drug, and the blood thinner heparin were the two drugs that accounted for highest number of serious problems.

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The U.S. Food and Drug Administration will open an office in China before the end of the year, according to a statement released by the federal government last week.

The FDA’s first office will open in Beijing and subsequent outposts are planned for Shanghai and Guangzhou, the Associated Press reports. A total of eight staffers are expected to man the three offices.

In addition to China, food and drug regulators are expected to be placed in India, Latin America and the Middle East.

The announcement comes after the safety of imported food and drugs has come under fire. There have been at least 149 deaths in the U.S. of people who had allergic reactions after receiving contaminated doses of the Chinese-made blood thinner heparin.

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Bank of America Corp. has agreed to buy back as much as $4.7 billion in auction-rate securities as part of a settlement announced Wednesday.

According to the Securities and Exchange Commission, the settlement would cover about 5,500 investors, small business and charities left holding the frozen investments when the market collapsed in February.

Bank of America reached the settlement with the SEC, the New York attorney general’s office and a coalition of state regulators. The agreement resolves the government agencies’ claim that BOA lied to its customers when it told them that auction-rate securities were as safe as cash.

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The general counsel of UBS’s investment bank has agreed to pay $6.5 million in order to settle a claim of insider trading involving auction-rate securities.

The settlement was reached yesterday between former senior UBS executive David Aufhauser, 57, and the New York attorney general’s office. Last August, as the New York attorney general Andrew Cuomo investigated UBS’s sale of auction-rate securities, Aufhauser resigned.

Cuomo’s office sued UBS for insider trading, alleging that several senior executives traded $21 million worth of auction-rate securities knowing the market was about to collapse.

Aufhauser is notable not only because he was a top executive at UBS but he was also the highest ranking in-house lawyer at the Treasury Department and served on the Justice Department’s corporate fraud task force.

Aufhauser will give up a $6 million bonus he was to receive from UBS and will pay a $500,000 penalty. In addition, he is barred from working in the securities industry for two years and may not work as an attorney for two years.

In a news release from the New York attorney general’s office, Andrew Cuomo stated:

“While thousands of UBS customers were kept in the dark as the auction rate market began to collapse, David Aufhauser, one of the company’s top executives, acquired insider information and quietly dumped his personal holdings of auction rate securities.”

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Levaquin, a powerful antibiotic used to treat lung, sinus, skin and urinary tract infections, has been linked to serious side effects, including increased risk of tendinitis and tendon rupture.

Made by Ortho-McNeil-Janssen Pharmaceuticals, Levaquin (known generically as levofloxacin) was approved by the U.S. Food and Drug Administration to treat bacterial infections in many different parts of the body. The drug can be administered in the form of a pill, as an injection or in an intravenous drip.

On July 8, 2008, the FDA issued an alert requiring Ortho to add a black-box warning to Levaquin’s label. The warning advises patients that Levaquin increases their risk of tendinitis—inflammation or irritation of a tendon, one of the thick fibrous cords that connect muscle to bone. Some patients who have taken Levaquin have reported the rupture of tendons in the shoulder, hand and heel.

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FOR IMMEDIATE RELEASE
FRIDAY, SEPT. 26, 2008
CONTACT: JOSEPH P. DANIS
MICHAEL J. FLANNERY
COREY D. SULLIVAN
Phone: 1-800-721-2519

NEWS RELEASE

Sept. 26, 2008

Carey & Danis LLC Announces Auction Rate Securities Class Action Lawsuit Filed Against H&R Block (NYSE: HRB).

St. Louis, MO – The law firm of Carey & Danis LLC (www.careydanis.com) has filed a class action lawsuit on behalf of persons who purchased auction rate securities from H&R Block, Inc. (NYSE: BAC), and H&R Block Financial Advisors, Inc., between Aug. 26, 2003 and Feb. 13, 2008 and who continued to hold the securities as of Feb. 13, 2008.

The class action lawsuit, La Grave v. H&R Block, Inc., et al., 08-cv-667, is pending in the U.S. District Court for the Southern District of Illinois. The suit alleges that H&R Block, Inc. and its subsidiary H&R Block Financial Advisors, Inc., violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which the securities are traded.

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The Food and Drug Administration recently identified the blood-thinning drug heparin as one of 20 medications with potential safety issues.

According to a statement released last Friday, the FDA noted that in the first three months of 2008, heparin was associated with anaphylactic-type reactions. Anaphylaxis is a severe, whole-body allergic reaction that can be fatal. Symptoms range from nausea and diarrhea to shortness of breath and dangerously low blood pressure. By June, 149 deaths in the U.S. had been linked to heparin.

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Regulators looking into the auction-rate securities debacle have widened their probe to include nearly 40 brokerages, the Los Angeles Times reports.

Journalist Walter Hamilton writes that investigators with the Financial Industry Regulatory Authority launched on-site examinations this week at brokerages to determine whether the middlemen knew about the problems in the market and warned customers about the risks.

Brokerages such as Charles Schwab Corp., Fidelity Investments and E*Trade Financial Corp. have also received subpoenas from New York Attorney General Andrew Cuomo, Bloomberg News reports.

The news comes on the heels of the announcement that eight Wall Street banks have reached legal settlements with state and federal regulators over claims they misled investors about the safety of the instruments.

So far, Merrill Lynch & Co., Goldman Sachs Group, Deutsche Bank, Citigroup Inc., UBS Financial Services, Morgan Stanley, JPMorgan Chase & Co., and Wachovia Corp. have agreed to buy back frozen auction-rate securities from investors.

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FOR IMMEDIATE RELEASE
WEDNESDAY, AUGUST 13, 2008
CONTACT: JOSEPH P. DANIS
COREY D. SULLIVAN
Phone: 1-800-721-2519

NEWS RELEASE

August 13, 2008

St. Louis, MO – The law firm of Carey & Danis LLC has filed a class action lawsuit on behalf of persons who purchased auction rate securities from Stifel Financial Corp. (NYSE: SF) and Stifel, Nicolaus & Company, Inc. between June 11, 2003 and Feb. 13, 2008 and who continued to hold the securities as of Feb. 13, 2008.

The class action lawsuit, Merrick v. Stifel Financial Corp., et al., 08-cv-01167, is pending in the U.S. District Court for the Eastern District of Missouri. The suit alleges that Stifel Financial Corp. and its subsidiary Stifel, Nicolaus & Company, Inc. violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by deceiving investors about the investment characteristics of auction rate securities and the auction market in which the securities are traded.

Auction rate securities are municipal or corporate debt securities or preferred stocks that pay interest at rates set through periodic auctions. The instruments typically have long-term maturity dates or no maturity date.

The suit filed on August 8 claims that, pursuant to uniform sales materials and top-down management directives, Stifel Financial Corp. offered and sold auction rate securities to the public as highly liquid cash-management instruments and as suitable alternatives to money market mutual funds. On Feb. 13, 2008, all of the major broker-dealers, including Stifel Financial Corp., withdrew their support for the auctions. The suit claims that, as a result, investors have been unable to liquidate their auction rate securities.

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Last week, three brokerage firms that sold auction-rate securities promised federal and state regulators that they would pay back $37 billion. Two of the firms – Citigroup and UBS – also agreed to fork over $250 million in fines.

St. Louis Post-Dispatch columnist David Nicklaus notes that e-mails released by Massachusetts regulators revealed that, in some cases, brokerages knew how shaky the auction-rate securities market had become. Nevertheless, the banks continued to tell investors that the instruments were highly liquid and as safe as cash.

The article, “Now playing: Latest revival of ‘Scoundrels on Wall Street,” also contains an interview with Carey & Danis lawyer Corey Sullivan. The article states:

“The investment firms also face numerous class-action lawsuits, including four filed by the Carey & Danis firm of St. Louis.

“Corey Sullivan, a lawyer at the firm, said the cases against UBS, Citigroup, Bank of America and Wells Fargo should benefit from the big-dollar regulatory settlements. ‘It certainly lends credence to the factual underpinnings of our cases,’ he said.”

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It was announced today that Citigroup Inc. has agreed to buy back $7.5 billion worth of auction-rate securities and it will pay a $100 million fine to settle charges levied by state and federal regulators that it fraudulently misled investors into believing the debts were “as safe as cash.”

The agreement was reached with the New York Attorney General’s office and the U.S. Securities and Exchange Commission.

Citigroup has until Nov. 5 to buy back $7.5 billion worth of auction-rate securities from about 40,000 retail customers, charities and small or mid-sized businesses. The bank will also reimburse investors who sold the securities at a loss and by the end of 2009 it will pay an additional $12 billion to institutional investors.

The $100 million fine will be split evenly between New York and the North American Securities Administrators Association.

Continue reading "Citigroup to Pay Fine, Buy Back Auction-Rate Securities" »

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