Kessler Topaz Meltzer & Check, LLP Files A Shareholder Class Action Lawsuit Against Baxter International Inc. For Violations Of Federal Securities Laws

RADNOR, Pa., Nov. 25, 2019 /PRNewswire/ -- The law firm of Kessler Topaz Meltzer & Check, LLP announces that the firm has filed a securities fraud class action lawsuit against Baxter International Inc. (NYSE: BAX) ("Baxter") on behalf investors who purchased or otherwise acquired Baxter common stock between February 21, 2019 and October 23, 2019, inclusive (the "Class Period").  This action, captioned Ethan E. Silverman v. Baxter International Inc., et al., Case No. 1:19-cv-07786, was filed in the United States District Court for the Northern District of Illinois.

Important Deadline Reminder:  Investors who purchased or otherwise acquired Baxter common stock during the Class Period may, no later than January 24, 2020, seek to be appointed as a lead plaintiff representative of the class.  For additional information or to learn how to participate in this litigation please visit:  www.ktmc.com/baxter-securities-class-action.

As set forth in the complaint, Baxter provides a broad portfolio of essential healthcare products, including acute and chronic dialysis therapies, sterile intravenous (IV) solutions, infusion systems and devices, parenteral nutrition therapies, inhaled anesthetics, generic injectable pharmaceuticals, and surgical hemostat and sealant products.

The Class Period begins on February 21, 2019, when Baxter filed its annual report for the year ended December 31, 2018 with the United States Securities and Exchange Commission ("SEC") on a Form 10-K.  Therein, Baxter reported, inter alia, net foreign exchange income of $73 million in 2018, $50 million in 2017, and $28 million in 2016.  Baxter further reported total net income of $1.624 billion in 2018, $717 million in 2017, and $4.965 billion in 2016, and net income (diluted) per share of $2.97 in 2018, $1.29 in 2017, and $9.01 in 2016.

On April 25, 2019, Baxter issued a press release announcing its first quarter 2019 financial and operational results wherein it reported, inter alia, net income of $347 million and net income (diluted) per share of $0.66 for the quarter, which was reiterated in its quarterly report filed with the SEC on a Form 10-Q on May 8, 2019.

On July 25, 2019, Baxter issued a press release announcing its second quarter 2019 financial and operational results wherein it reported, inter alia, net income of $343 million and net income (diluted) per share of $0.66 for the quarter, which Baxter reiterated in its quarterly report filed with the SEC on a Form 10-Q on July 30, 2019.

In each of the above-referenced financial reports, management represented that Baxter's internal control over financial reporting was effective.

On October 24, 2019, Baxter revealed the truth when it announced that it "recently began an investigation into certain intra-Company transactions undertaken for the purpose of generating foreign exchange gains or losses."  According to Baxter, "[t]hese transactions used a foreign exchange rate convention historically applied by the Company that was not in accordance with generally accepted accounting principles [("GAAP")] and enabled intra-Company transactions to be undertaken after the related exchange rates were already known."

Baxter further admitted that "[t]hese intra-Company transactions resulted in certain misstatements in the Company's previously reported non-operating income related to net foreign exchange gains" and acknowledged that, "[u]pon completion of the investigation and the Company's evaluation of the materiality of the misstatements, the Company expects to either amend its periodic reports previously filed with the SEC to include restated financial statements that correct those misstatements, or include in reports for future periods restated comparative financial statements that correct those misstatements."  Baxter further explained that "[t]he Audit Committee of the Company's Board of Directors is overseeing this investigation with the assistance of independent, experienced external advisors," that "Baxter voluntarily advised the staff of the [SEC] that the internal investigation is underway and intends to provide additional information to the SEC as the investigation progresses," and that "[t]he Company does not expect to file its quarterly report on Form 10-Q for the period ended September 30, 2019 on a timely basis."

Following this news, the price of Baxter common stock declined $8.87 per share, or 10.1%, from a close of $87.95 per share on October 23, 2019, to close at $79.08 per share on October 24, 2019.

The complaint alleges that, throughout the Class Period, defendants misrepresented and/or failed to disclose that: (1) certain intra-Company transactions, undertaken for the purpose of generating foreign exchange gains and losses, used foreign exchange rate conventions that were not in accordance with GAAP and enabled intra-Company transactions to be undertaken after the related exchange rates were already known; (2) Baxter lacked effective internal control over financial reporting; (3) as a result, Baxter's financial statements were misstated and would likely require correction or amendment; (4) due to Baxter's internal investigation, it would not be able to file its quarterly report for the period ending September 30, 2019, with the SEC on a Form 10-Q in a timely manner; and (5) as a result of the foregoing, defendants' statements about Baxter's business and operations lacked a reasonable basis.

If you wish to discuss this securities fraud class action lawsuit or have any questions concerning this notice or your rights or interests with respect to this litigation, please contact Kessler Topaz Meltzer & Check (James Maro, Jr., Esq. or Adrienne Bell, Esq.) at (844) 887-9500 or (610) 667–7706, or via e-mail at [email protected].

Baxter investors may, no later than January 24, 2020, seek to be appointed as a lead plaintiff representative of the class through Kessler Topaz Meltzer & Check, or other counsel, or may choose to do nothing and remain an absent class member.  A lead plaintiff is a representative party who acts on behalf of all class members in directing the litigation.  In order to be appointed as a lead plaintiff, the Court must determine that the class member's claim is typical of the claims of other class members, and that the class member will adequately represent the class.  Your ability to share in any recovery is not affected by the decision of whether or not to serve as a lead plaintiff. 

Kessler Topaz Meltzer & Check prosecutes class actions in state and federal courts throughout the country involving securities fraud, breaches of fiduciary duties and other violations of state and federal law. Kessler Topaz Meltzer & Check is a driving force behind corporate governance reform, and has recovered billions of dollars on behalf of institutional and individual investors from the United States and around the world.  The firm represents investors, consumers and whistleblowers (private citizens who report fraudulent practices against the government and share in the recovery of government dollars).  For more information about Kessler Topaz Meltzer & Check, please visit www.ktmc.com.

CONTACT:

Kessler Topaz Meltzer & Check, LLP
James Maro, Jr., Esq.
Adrienne Bell, Esq.
280 King of Prussia Road
Radnor, PA 19087
(844) 887-9500
(610) 667-7706
[email protected]

SOURCE Kessler Topaz Meltzer & Check, LLP

Related Links

http://www.ktmc.com