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Stock Drop Settlement on the Table for Boston Scientific

May 24, 2010 (PLANSPONSOR.com) – There’s a potential settlement in sight for participants in a 401(k) stock drop suit.

According to a press release from plaintiff lead co-counsels Harwood Feffer LLP and Milberg LLP, an $8.2 million cash settlement has been proposed for a class action involving participants in the Boston Scientific Corporation 401(k) Retirement Savings Plan at any point between May 7, 2004 and January 26, 2006, inclusive.   

According to the notice, plaintiffs’ law firms are “intending to move the Court to award attorneys’ fees from the Gross Settlement Fund in an amount not to exceed one-third (33⅓%) of the Gross Settlement Fund and for reimbursement of their expenses in the approximate amount of $475,000, plus interest on such expenses at the same rate as earned by the Settlement Fund.”  The settlement indicates that they are also “intending to move the Court to award a payment of up to $10,000 to Named Plaintiff Edward Hazelrig, Jr. for his representation of the Proposed Class” from the settlement fund.

The Case 

The settlement involved allegations made in the United States District Court for the District of Massachusetts, in Hochstadt, et al. v. Boston Scientific Corp.  In that case former employee Robert Hochstadt, who had been a lead plaintiff in another suit against the firm (along with Douglas Fletcher and Michael Lowe), but dropped out of the suit before a review by U.S. District Judge Joseph L. Tauro of the U.S. District Court for the District of Massachusetts resulted in a dismissal of that case (see Boston Scientific Wins Stock Drop Lawsuit ).

In dismissing the previous case, Judge Tauro ruled that because Fletcher and Lowe sold more stock than they purchased during the time period when they claimed the company's stock price was artificially inflated, they likely were not financially injured by any potential misdeed by the employer and therefore, lacked constitutional standing

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