Prongay & Murray LLP (“GPM”) announces that it has
filed a class action lawsuit in the United States District Court for the
Southern District of California on behalf of a class (the “Class”)
consisting of persons and entities that acquired Obalon Therapeutics,
Inc., (“Obalon” or the “Company”) (NASDAQ: OBLN)
securities between October 5, 2016 and January 23, 2018,
inclusive (the “Class Period”).
If you are a member of the Class described above, you may move the Court
no later than 60 days from the date of this notice, to serve as
lead plaintiff. Please contact Lesley Portnoy at 888-773-9224 or
310-201-9150, or at [email protected]
to discuss this matter.
On January 23, 2018, Obalon issued a press release disclosing that “a
purported whistleblower contacted KPMG LLP, the Company’s independent
auditors, to make certain allegations relating to allegedly improper
revenue recognition during the Company’s fourth fiscal quarter of 2017.”
The Company further stated that “Obalon’s Audit Committee will oversee
an internal investigation of these allegations.”
On this news, Obalon’s stock price fell $1.73 per share, or 33.3%, to
close at $3.46 per share on January 23, 2018, on unusually heavy volume.
The $3.46 closing price represented a total decline of $11.54, or nearly
77%, from the IPO price of $15.00 per share.
The filed complaint alleges that throughout the Class Period, Defendants
made materially false and misleading statements regarding the Company’s
business, operations, and prospects. Specifically, Defendants failed to
disclose: (1) that the Company recognized revenue in violation of
Generally Accepted Accounting principles (“GAAP”); (2) that the Company
lacked adequate internal controls over accounting and financial
reporting; and (3) that, as a result of the foregoing, the Company’s
financial statements and Defendants’ statements about Obalon’s business,
operations, and prospects, were materially false and misleading at all
If you purchased shares of Obalon during the Class Period you may move
the Court no later than 60 days from the date of this notice to
ask the Court to appoint you as lead plaintiff. To be a member of the
Class you need not take any action at this time; you may retain counsel
of your choice or take no action and remain an absent member of the
Class. If you wish to learn more about this action, or if you have any
questions concerning this announcement or your rights or interests with
respect to these matters, please contact Lesley Portnoy, Esquire, of
Glancy Prongay & Murray LLP, 1925 Century Park East, Suite 2100, Los
Angeles, California 90067, at (310) 201-9150, by e-mail to [email protected],
or visit our website at www.glancylaw.com.
This press release may be considered Attorney Advertising in some
jurisdictions under the applicable law and ethical rules.
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