MAKO Surgical Corp (MAKO)

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Securities class action against Mako Surgical dismissed

May 17, 2013, 1:09pm EDT Updated: May 17, 2013, 1:55pm EDT

A federal judge dismissed a securities class action lawsuit against Mako Surgical Corp.


Mako Surgical President and CEO Maurice Ferre.

The complaint was filed in the Southern District of Florida in May 2012 on behalf of shareholders who claimed that officials of the Davie-based surgical robotics company (NASDAQ: MAKO) misled them concerning sales projections. The lawsuit named Mako Surgical Chairman and CEO Dr. Maurice Ferre and CFO Fritz LaPorte.

Mako Surgical’s 2012 sales guidance, released in January of that year, called for sales of 56 to 62 surgical robots. When it released its first quarter results in May 2012, the company said it sold only four and reduced its annual sales projections. Its stock dropped by 43 percent soon after.

U.S. District Judge James I. Cohn dismissed the complaint on May 15.

The judge ruled that Mako Surgical’s 2012 sales projections were accompanied by meaningful language that cautioned investors that these “forward-looking statements” may not be on target. This cautionary language wasn’t “boilerplate,” as the plaintiffs argued, because it detailed the kind of misfortunes that could cause the company to miss its projections, the judge ruled.

“The warnings in the defendants’ press releases and the referenced SEC filings warned investors of precisely what happened here: that projected system sales and procedures might be lower than projected due to the economic downturn, variable sales and a reluctance on the part of orthopedic surgeons to adopt the new technology,” the judge wrote.

Cohn also ruled that comments by Ferre and LaPorte during investor conference calls were protected as “forward-looking statements.” There were no allegations in the complaint that establish that Ferre and LaPorte had actual knowledge that the 2012 sales projections were false, the judge added.

However, the judge left the plaintiffs the option to file an amended complaint by June 5.

Officials with New York law firm Labaton Sucharow, the attorneys representing the plaintiffs, declined comment.

"Mako is pleased with Judge Cohn’s order dismissing in its entirety the putative class action against Mako," said Mako Surgical Menashe Frank said. "We are encouraged that this will further enable Mako to focus on the hospitals, doctors and patients we serve.”

Mako Surgical was represented in the case by Holland & Knight in Miami, with attorneys Louise McAlpin, Stephen P. Warren, Tracy Ann Nichols, and Allison B. Kernisky.

A shareholder derivative lawsuit, with a group of shareholders suing in place of the company, remains pending against Ferre, LaPorte and other Mako Surgical officials. The defendants filed a motion to dismiss the complaint, which also involves the 2012 sales projections.

The derivative lawsuit is also before Judge Cohn.

According to Mako Surgical’s SEC filings, the company’s board formed a special committee of two independent directors in October to review and investigate the claims raised in the derivative lawsuit. This process hasn’t been completed.

http://www.bizjournals.com/southflorida/news/2013/05/17/securities-class-action-against-mako.html?page=all