Law360 Reports on $10.8M Suit Against Underwriters of Tokai Pharmaceuticals Inc.
Law360 (subscription required) recently reported on a $10.8 million suit against Tokai Pharmaceuticals Inc. , a developmental-stage pharmaceutical company. Investor Peter Angelos’ complaint alleges that Tokai Pharmaceuticals failed to disclose, among other things, that the critical Phase III trial had too few research subjects to yield meaningful results in testing of a prostate cancer drug, arguing that the underwriters are liable for misstatements in Tokai investment documents. Angelos alleged that investors, including himself, based their false belief on Tokai’s prospectus and subsequent disclosures by the company that the study had a sufficient number of test subjects and that Tokai provided false test data to the SEC and NIH. Angelos, who bought Tokai shares shortly after the IPO but made the majority of his investment after the Phase III trial was announced, alleged he lost more than $10 million after the truth came out and the stock plummeted. The suit includes claims of violations of the Securities Exchange Act and Angelos is asking for damages of at least $10.8 million as well as attorneys’ costs and fees. Olshan Litigation partner John Moon serves as lead counsel to Peter Angelos in this action.