Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Biotech / Medical : SABRATEK CORP (SBTK) -- Ignore unavailable to you. Want to Upgrade?

To: Pluvia who wrote (153)	6/16/1999 1:05:00 PM
From: Pluvia	Read Replies (1) \| Respond to of 487

FRAUD ALLEGATIONS Overview #2 Following are excerpts from the law suit filed against SBTK. We believe the sources for these allegation include persons directly involved in the transactions, including persons who may have been under oath during deposition. We also believe these allegations have been corroborated by several sources. We are substantially impressed by the detailed nature of the allegations, which include times, dates, persons involved and equipment involved. ********************* 6. In addition to concealing and misrepresenting the truth concerning its Rocap-related problems, during the Class Period Sabratek's officers and directors were also aware of, but did not disclose, a number of other material adverse problems involving primarily the Company's infusion pump products. These problems included, inter alia, the following: (a) a significant percentage of the Company's infusion pumps were suffering from certain manufacturing defects and design problems, (b) demand for the Company's infusion pump products was weakening in the face of increasing competition and a shrinking market for pumps, and (c) the Company's revenue growth could not be sustained in the face of these problems. As a result of these adverse facts-and as defendants also knew but did not disclose-the level of unsold Sabratek product both within the Sabratek organization and at Sabratek's distributors (i.e. within Sabratek's “distribution channels”) had risen to damagingly high levels. 7. To conceal these sales-related problems, Sabratek engaged in a variety of grossly improper revenue-inflating practices during and immediately prior to the Class Period that enabled the Company to artificially inflate its reported revenues, income and earnings per share at the end of quarterly reporting periods, and that rendered the Company's publicly-filed financial statements and other communications regarding the Company's financial performance complained of herein materially flase and misleading. ********************