Chronimed, executives sued over accounting problem
Tuesday, June 19, 2001
Chronimed Inc. and senior executives have been sued in U.S. District Court in Minneapolis for allegedly making false and misleading statements to investors that
violated securities law. The suit seeks class-action status and unspecified damages.
Chronimed, a drug distribution company based in Minnetonka, announced before the stock market opened Thursday that it intended to adjust its reported revenue,
earnings and accounts receivable for the fiscal year ended June 30, 2000, and the three quarters ended March 30, 2001, because they were overstated.
The company blamed the overstatement, which is as yet undefined, on problems with a retail computer-accounting system and related procedures. Trading in
Chronimed stock also was halted Thursday and has yet to resume.
The suit, filed Friday, contends that the defendants knew or recklessly disregarded the true condition of the company and kept it from investors. The class action would
be on behalf of people who bought Chronimed stock from Oct. 27, 1999, to June 13, 2001.
-- Terry Fiedler
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