ReWalk faces fraud suit
Photo | Courtesy of ReWalk Robotics
Larry Jasinski is the CEO of ReWalk Robotics, a global exoskeleton medical device manufacturer that originated in Israel and is now based in Marlborough.
(Updated Feb. 8) A securities fraud class action lawsuit has been filed against ReWalk Robotics in a Massachusetts federal court related to the company’s September 2014 initial public offering, according to a statement from the attorneys representing the plaintiffs.
The plaintiffs allege the registration statement and prospectus issued on the company’s exoskeleton product in connection with the company’s initial public offering did not disclose material information, including that ReWalk was unprepared or unable to comply with special controls requirements or to provide the U.S. Food and Drug Administration with a post-market surveillance study as required by the FDA to maintain ongoing sales of its product.
According to the lawsuit, the company stock dropped more than 22 percent when the public became aware of the alleged compliance and disclosure failures on Feb. 25, 2016, causing plaintiffs substantial damages related to their purchase of ReWalk shares.
ReWalk CEO Larry Jasinski denied the allegations in an email Wednesday.
"ReWalk disputes the allegations and will vigorously defend ourselves with any lawsuit of this type," Jasinski said.
ReWalk, which has U.S. headquarters in Marlborough, has started to commercialize the first exoskeleton, which helps paraplegics walk, but it has faced setbacks recently. Nasdaq in December put the company on notice, warning that it was in danger of being delisted from the exchange for failing to comply with the required minimum $50-million market value. ReWalk has until June to comply.
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