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Medical device maker settles class action securities fraud case

It's likely that more than a few executives of St. Jude Medical, a leading medical device maker, have lost sleep the past few years while fretting at night over defibrillator wires.

If you're an American who has never had a heart problem and doesn't know anyone else who has had one, either, you likely don't know much about defibrillator wires.

If, conversely, you've ever had a heart implant, you probably know a great deal about those wires, especially products St. Jude has manufactured over the years.

The wires, which are often called "leads," connect implantable defibrillators to the heart.

It would be gross understatement to simply note that St. Jude has had a problem with its leads in recent years.

In fact, an early lead named Riata was linked with high numbers of patient injuries, leading to large-scale product liability litigation.

And just earlier this month, the device maker settled a class action lawsuit with investor plaintiffs alleging securities fraud in connection with a Riata replacement called Durata. The company reportedly agreed to a payout of $39.25 million.

A central contention in the litigation was that, upon introducing Durata in 2012, St. Jude began to immediately hype the product in an unjustified manner, essentially enticing consumers to invest in the company through fraud.

Notably, and in the wake of a study that St. Jude pointed to showing a marked improvement of Durata over its predecessor, federal inspection of a manufacturing plant revealed myriad problems with the Durata lead. Company stock subsequently plummeted.

Throughout the litigation, St. Jude consistently vowed to vigorously contest the claims made against it. Ultimately, the company caved on that stance, opting to settle.

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