Klafter & Olsen LLP Announces That It Has Filed a Class Action Lawsuit Against ArthroCare Corporation on Behalf of Common Stock Holders and Certain Traders in ArthroCa...(ed by $2million to $5 million and that ...),Health

Date:7/25/2008

ed by $2 million to $5 million, and that "the restatement will result in material reductions in operating income and net income for the annual and quarterly periods being restated." The Company also disclosed that while the restatement is being completed, a review of the Company's internal controls will be conducted and that further material misstatements or misconduct might still be uncovered.

Upon that announcement, shares of ArthroCare plummeted from its close of $40.03 on Friday, July 18, 2008 to a close of $23.21 on July 21, 2008, the next day of trading, on extraordinary volume -- a drop of over 42%. On July 24, 2008, the Company disclosed that the SEC had commenced an inquiry into the circumstances surrounding the restatement. During the period covered by the restatement, ArthroCare's officers and directors sold nearly $12 million worth of their personal holdings in ArthroCare.

The Complaint charges ArthroCare and certain of its officers with violations of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that the defendants: (1) falsely reported ArthroCare's financial results for the quarter ended September 30, 2006 through the first quarter ended March 31, 2008; (2) falsely stated that the Company's financial statements were prepared in accordance with Generally Accepted Accounting Principles ("GAAP"); and (3) falsely stated that the Company had adequate internal and financial controls. As a result of the foregoing, the financial statements being restated by the Company were materially false and misleading when issued.

If you purchased ArthroCare's common stock from January 24, 2008 through July 18, 2008, or purchased call options or sold put options in ArthroCare common stock from October 27, 2006 through July 18, 2008, and sustained losses, please contact Klafter & Olsen LLP at http://www.klafterolsen.com or call us at 202/261-3553 for a more thorough expla
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SOURCE Klafter & Olsen LLP Copyright©2008 PR Newswire. All rights reserved

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