Pfizer Securities Class Action Settlement Fund
The initial complaint in this case, entitled Jones v. Pfizer Inc., et al., Civil Action No. 1:10-cv-03864-AKH, was filed in the United States District Court for the Southern District of New York on May 11, 2010. On November 4, 2010, the Court appointed Stichting Philips Pensioenfonds as the Lead Plaintiff. On April 15, 2011, the First Amended Consolidated Class Action Complaint for Violations of the Federal Securities Laws was filed alleging violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Complaint”). This case was vigorously litigated by the parties. During the pendency of the Litigation, Lead Plaintiff and Defendants engaged in extensive discovery for over three years. The parties subpoenaed more than 80 parties and third parties, resulting in the production of over 23.8 million pages of documents, which were reviewed and analyzed by Lead Plaintiff’s counsel. Thereafter, the parties took approximately 65 depositions. The parties also engaged 24 expert witnesses, who provided opinions relevant to the case. The parties briefed eight motions for summary judgment and numerous pre-trial motions. In anticipation of trial, the parties subpoenaed over 30 witnesses to compel their attendance at trial.
On January 18, 2015, the parties reached a tentative agreement to settle the case for $400,000,000. The terms of the agreement were documented in the Stipulation of Settlement dated February 8, 2015. The agreement is subject to approval by the Court.
IF YOU PURCHASED THE COMMON STOCK OF PFIZER INC. (“PFIZER” OR THE “COMPANY”) DOMESTICALLY OR ON A DOMESTIC EXCHANGE BETWEEN JANUARY 19, 2006 AND JANUARY 23, 2009, INCLUSIVE, YOU MAY BE A CLASS MEMBER.
THE DEADLINE TO FILE A PROOF OF CLAIM IN THIS MATTER IS JULY 30, 2015, ANY AND ALL CLAIMS RECEIVED AFTER JULY 30, 2015 ARE LATE AND MAY BE BARRED FROM PARTICIPATION IN ANY DISTRIBUTION.
This website is intended to provide certain background information regarding the Litigation.
SUMMARY OF THE LITIGATION
As set forth above, the proposed settlement will create a cash fund in the principal amount of Four Hundred Million Dollars ($400,000,000.00) (the “Settlement Amount”), plus any interest that may accrue thereon (the “Settlement Fund”).
This is a securities fraud class action brought against Pfizer and certain of its officers alleging that Defendants made materially false and misleading statements to investors between January 19, 2006 and January 23, 2009, inclusive (the “Class Period”), in violation of §§10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. On January 26, 2009, the Company announced it had agreed to pay $2.3 billion to settle allegations by the Department of Justice that it had engaged in off-label marketing of Bextra, as well as other open investigations. On that same day, Pfizer’s stock price dropped from $17.45 to $15.65.
After years of litigation, the parties were prepared for trial. Lead Plaintiff claimed that Defendants made five general categories of false statements: (i) that Pfizer was in compliance with laws and regulations regarding off-label marketing; (ii) that Pfizer had the internal controls to “fairly present ‘in all material respects’” its financial condition and that Pfizer’s internal controls “‘guard[ed] against’” “improper activities” such as off-label marketing; (iii) related to the Government’s investigations of its off-label marketing of Bextra, Zyvox, Geodon and Lyrica; (iv) concerning the sales performance and growth of Pfizer’s drugs that concealed the contributions to sales resulting from the off-label marketing of those drugs; and (v) false financial results and reports filed with the Securities and Exchange Commission, which did not sufficiently account for or disclose probable loss contingencies resulting from Pfizer’s off-label marketing as required by Generally Accepted Accounting Principles. Defendants denied that they had made any false statements or omissions, and continue to maintain that Pfizer’s disclosures complied with all applicable laws and regulations.
The Settlement Fund, subject to deduction for, among other things, costs of class notice and administration and certain taxes and tax related expenses and for attorneys’ fees and expenses as approved by the Court, will be available for distribution to Class Members. Your recovery from this fund will depend on a number of variables, including the number of shares of Pfizer common stock you purchased domestically or purchased on a domestic exchange during the Class Period, the timing of your purchases and any sales, and how many others similarly situated make claims. If all eligible Class Members make claims, the estimated average distribution per share of Pfizer common stock will be approximately $0.148 before deduction of Court-approved fees and expenses. Historically, actual claimants are fewer than 100%, resulting in higher per share distributions. At the Court’s request, we note that attorneys experienced in the field estimate that as few as 20% of Class Members may claim and as many as 85% may claim.
STATEMENT OF POTENTIAL OUTCOME
In addition to disagreeing on whether or not Defendants made any false statements or omissions, Lead Plaintiff and Defendants do not agree on the average amount of damages per share, if any, that would have been recoverable if Lead Plaintiff was to have prevailed on each claim alleged. At trial, Lead Plaintiff would have presented expert testimony that Pfizer’s January 26, 2009 announcement of the $2.3 billion fine, correcting its previous false and misleading statements, caused the stock to drop $0.34 per share. Lead Plaintiff also would have argued that the announcement caused damages to Pfizer’s reputation that resulted in an additional $0.92 in damages per share. In short, if plaintiffs won and the jury accepted all of their experts' testimony, Class Members could have recovered up to $1.26 for every share that they purchased during the Class Period and held until January 26, 2009. At trial, Defendants would have taken the position, also supported by expert testimony, that none of the drop in Pfizer’s stock price could be attributed to the settlement announcement, and therefore Class Members had suffered no legal damages at all. Defendants would have pointed to other information disclosed on that day that caused the share price to decline – none of which gives rise to a claim for damages – including a 50% cut in Pfizer’s dividend, disappointing earnings guidance by the Company, and the announcement of the proposed acquisition of Wyeth by Pfizer. In short, the parties disagree on the merits of this case, including whether or not damages were suffered and are recoverable. Defendants deny that they are liable in any respect or that Lead Plaintiff or the Class suffered any injury. Accordingly, recovery of any amount at trial was far from certain.
REASONS FOR SETTLEMENT
Lead Plaintiff believes that the proposed settlement is a good recovery and is in the best interests of the Class. Because of the risks associated with continuing to litigate and proceeding to trial, there was a danger that the Class would not have prevailed or, if they had, how much, if any, damages could be recoverable. The proposed settlement provides a certain benefit to Class Members, and will avoid the years of delay that would likely occur in the event of a contested trial and appeals.
SUBMISSION OF CLAIMS FOR DAMAGES BY CLASS MEMBERS
PLEASE READ THE NOTICE OF PROPOSED SETTLEMENT CAREFULLY AND IN ITS ENTIRETY. YOUR RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS LITIGATION. PLEASE NOTE THAT IF YOU ARE A CLASS MEMBER, YOU MAY BE ENTITLED TO SHARE IN THE PROCEEDS OF THE PROPOSED SETTLEMENT, IF IT IS APPROVED. TO CLAIM YOUR SHARE OF THIS FUND, YOU MUST SUBMIT A VALID PROOF OF CLAIM AND RELEASE FORM (“PROOF OF CLAIM”) POSTMARKED OR SUBMITTED ONLINE ON OR BEFORE JULY 30, 2015, ADDRESSED AS FOLLOWS:
IF YOU HAVE ANY QUESTIONS about your rights or the proposed settlement, please contact Lead Counsel by mail or e-mail at the address set forth below:
ROBBINS GELLER RUDMAN & DOWD LLP
Michael J. Dowd
655 West Broadway, Suite 1900
San Diego, CA 92101
Lead Counsel for Plaintiffs
For your convenience, copies of all Pleadings, Orders and other documents filed in this Litigation are accessible by clicking on Pleadings, Orders and other documents filed in this Litigation. In addition, the claims administrator, Gilardi & Co. LLC, maintains a website for class members at www.pfizerincsecuritieslitigation.com.