Notice that Farouqi & Farouqi (whoever they are) are announcing an "investigation," not a lawsuit. Here's how the game works: sift through SEC filings looking for technical violations of the securities laws: announce an investigation, hoping to scare up an investor willing to act as lead plaintiff; commence a lawsuit, hoping to scare up more plaintiffs; restyle the lawsuit as a "class action"; negotiate a settlement in which the target company "admits" to a technical violation; collect lawyer's fees for what is in effect a nuisance claim. Don't believe this is happening? Take a look at F & F's recent notification of a settlement vs. NBS: total damages awarded to plaintiffs $0; total fees awarded to F & F: $500,000.
If "IMUC tanks on this news," it will be because of the gross stupidity/naivete of people who can't read. Read their Press Release; better yet, read their notice of settlement re: NBS.
Faruqi & Faruqi, LLP Announces Investigation Of Potential Securities Fraud At Isis Pharma Saturday, 19 Jan 2013 10:00am EST
Faruqi & Faruqi, LLP, a national securities law firm, announced that it is investigating potential securities fraud at Isis Pharmaceuticals, Inc. The investigation focuses on whether the Company and its executives violated federal securities laws by misleading investors to believe that one of the drugs in Isis' product pipeline, Kynamro, would receive approval from the U.S. Food and Drug Administration (FDA) through a bevy of materially false and misleading statements regarding the safety and efficacy of the drug, as well as purportedly affirmative results from Kynamro's phase three clinical trial. On October 16, 2012, an FDA advisory committee posted information on the FDA's website noting that in recent patient studies, 3.1% of patients, or 23 people treated with Kynamro developed tumors and three of them died, while only 0.9%, or two patients getting a placebo developed tumors.
You are correct. Firms always do this when a company initiates a poison pill. That may be the case here as well. They also state nothing may come out of this. Really what they are doing is just throwing stuff at the wall and seeing what sticks.
How is this a technical violation of securities laws?
The board is recommending an increase in shares. Stock holders need to consider the issue and vote however they want. Can you really argue about their "breach" of fiduciary duty on this?
Maybe shareholders will agree with the reasons for the recommended increase?
Anyway, something I think is even funnier is that the "announcement" is a paid advertisement by F&F. It isn't a news item, but somehow it ends up in the news portion of the IMUC Yahoo page.
Read at the bottom:
"Attorney Advertising. (C) 2013 Faruqi & Faruqi, LLP. The law firm responsible for this advertisement is Faruqi & Faruqi, LLP"