Pomerantz Appointed Lead Counsel in STAAR Surgical Securities Litigation

On October 29, 2020, U.S. District Judge James V. Selna of the Central District of California appointed Pomerantz LLP as Lead Counsel on behalf of Lead Plaintiff Daniel Mangas in Alwazzan v. STAAR Surgical Company, 20-cv-1533 (C.D. Cal.), a securities litigation being pursued on behalf of a class of defrauded investors regarding allegations of false and misleading public statements due to misstatement of the company’s sales and growth in China and inaccurate representations of its marketing and research expenses.

STAAR Surgical Company (“STAAR” or the “Company”) manufactures and sells implantable lenses for the eye and delivery systems used to implant the lenses.

The complaint alleges that, between February 26, 2020 and August 10, 2020, the defendants issued materially false and misleading statements and failed to disclose that the Company was overstating and mischaracterizing its sales, revenue growth, marketing spend and research and development expenses in China.

On February 26, 2020, STAAR issued a press release announcing its financial results for the fourth quarter and fiscal year ended January 3, 2020, reporting “Record Net Sales of $150.2 Million” for the year, up 21% year-over-year, and net sales of $38.9 million for the quarter, up 25% from the prior year quarter. On the same day, STAAR filed Form 10-K with the U.S. Securities and Exchange Commission in which it revealed that “[o]ne customer, Shanghai [Lansheng] (“Lansheng”)… accounted for more than 43% of our consolidated net sales during fiscal 2019.”

On August 5, 2020, STAAR issued a press release announcing its financial results for the second quarter ended July 3, 2020, reporting net sales of $35.2 million, down 11% from the prior year quarter. On this news, STAAR’s share price fell $5.95 per share, or 9.6%, to close at $55.86 per share on August 6, 2020.

The truth began to emerge on August 11, 2020, when J Capital Research, a financial research company focused on the Chinese market, published a report titled “Less Than Meets the Eye” in which it alleged, after researching and analyzing Lansheng’s sales and distribution figures, that “STAAR Surgical has overstated sales in China by at least one-third, or $21.6 [million]. That would mean that all of the company’s $14 [million] in 2019 profit is fake.” On this news, STAAR’s share price fell a further $3.17 per share, or 6.16%, to close at $48.25 per share on August 11, 2020.