In re Obalon Therapeutics, Inc. Securities Litigation

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In re Obalon Therapeutics, Inc. Securities Litigation
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The information contained on this web page is only a summary of information presented in more detail in the Notice of Pendency and Proposed Settlement of Class Action, (the “Notice”), which you can access by clicking here. Since this website is just a summary, you should review the Notice for additional information. 

If you are a Settlement Class Member, your legal rights will be affected by this Settlement whether you act or do not act. 

Please read the Notice carefully.

IF YOU PURCHASED THE COMMON STOCK OF OBALON THERAPEUTICS, INC. (“OBALON”) BETWEEN OCTOBER 6, 2016 AND MAY 11, 2018, INCLUSIVE (THE “SETTLEMENT CLASS PERIOD”) AND WERE DAMAGED THEREBY, YOU ARE A CLASS MEMBER.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:

 SUBMIT A PROOF OF CLAIM     POSTMARKED OR SUBMITTED   ONLINE BY APRIL 22, 2021

This is the only way to be eligible to get a payment from the Settlement.  If you wish to participate in the Settlement, you will need to complete and submit the enclosed Proof of Claim.  Class Members who do not complete and submit the Proof of Claim in accordance with the instructions on the Proof of Claim and do not submit it within the time required will be bound by the Settlement but will not participate in any distribution of the Net Settlement Fund.

EXCLUDE YOURSELF FROM THE CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION SO THAT IT IS POSTMARKED NO LATER THAN APRIL 1, 2021

You will not be bound by the results of this lawsuit, and you will not receive any payment.  This is the only option that allows you to ever be part of any other lawsuit against the Released Defendant Parties about the legal claims related to the issues raised in this Litigation.  

OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION SO THAT IT IS RECEIVED NO LATER THAN APRIL 1, 2021

If you believe the Settlement is objectionable in any respect, you may write to the Court about why you oppose the Settlement, the Plan of Allocation, and/or the request for attorneys’ fees and expenses.  You will still be a member of the Class.

 ATTEND THE SETTLEMENT HEARING   ON APRIL 22, 2021, AT 2:00 P.M., AND   PROVIDE A NOTICE OF INTENTION TO   APPEAR TO LEAD COUNSEL SO THAT   IT IS RECIEVED NO LATER THAN   APRIL 1, 2020

 

  The hearing on whether to approve the Settlement is scheduled for April 22,    2020, at 2:00 p.m. ("the Settlement Hearing") and is open to the public. You    do not need to attend the hearing unless you wish to speak either in support    of the Settlement or in support of any objetion you may have submitted, and    have submitted to Lead Counsel a Notice of Intention to Appear so that it is    received no later than April 1, 2021. The Court may postpoone the     Settlement Hearing without prior notice or decide to hold the Settlement   Hearing by telephone or videoconference.

  DO NOTHING

If you are a Class Member and do not submit a Proof of Claim postmarked or submitted online by April 22, 2021, you will not be eligible to receive any payment from the Settlement Fund.  You will, however, be bound by the Settlement, unless you have requested exclusion from the Class.


The Settlement Hearing

The Settlement Hearing will be held on April 22,, 2021, at 2:00 p.m., before the Honorable Anthony J. Battaglia, United States District Judge, at the United States District Court for the Southern District of California, 221 West Broadway, San Diego, CA 92101.  The purpose of the Settlement Hearing will be to determine: (1) whether the proposed Settlement, as set forth in the Stipulation, consisting of Three Million One Hundred Fifty Thousand Dollars ($3,150,000.00) in cash, should be approved as fair, reasonable, and adequate to the members of the Class; (2) whether the proposed plan to distribute the Settlement proceeds (the “Plan of Allocation”) is fair, reasonable, and adequate; (3) whether the application by Lead Counsel for an award of attorneys’ fees and expenses should be approved; and (4) whether the Judgment, in the form attached to the Stipulation, should be entered.  The Court may adjourn the Settlement Hearing from time to time and without further notice to the Class.  The Court may also decide to hold the Settlement Hearing by telephone or videoconference.  Class Members should check the Settlement website or the Court’s PACER site (see Question 26 below) to confirm that the date or method of the Settlement Hearing is unchanged.

What is this case about?

This case is currently pending before the Honorable Anthony J. Battaglia in the United States District Court for the Southern District of California. The initial complaint in this case, entitled Hustig v. Obalon Therapeutics, et al., No.  3:18-CV-0352-AJB-WVG, was filed in the Court on February 14, 2018.  On July 24, 2018, the Court appointed Inter-Local as Lead Plaintiff.

On October 10, 2018, Lead Plaintiff and another plaintiff filed the Consolidated Complaint for Violation of the Federal Securities Laws, alleging violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and §§11 and 15 of the Securities Act of 1933 (“Complaint”).  The Complaint alleged that Defendants made materially false and misleading statements during the Class Period and in their offering materials regarding the Obalon Balloon System’s (the “Obalon Balloon”) ease of use, safety profile, and efficacy.  It also alleged that, during the Class Period,  Defendants made materially false and misleading statements and/or failed to disclose material facts regarding Obalon’s financial health.  The Complaint further alleged that Defendants materially misled investors when they prematurely reported revenue  results from a promotional sale of the Obalon Balloon in violation of GAAP.  And it alleged that Defendants made materially false and misleading statements that artificially inflated the price of Obalon common stock and that when the truth was eventually disclosed the Class suffered substantial damages.

On January 30, 2020, the parties participated in a full–day mediation session with the Honorable Irma Gonzalez (ret.) but were unable to reach a resolution.  With the benefit of additional discovery, the parties thereafter virtually attended a court-ordered Early Neutral Evaluation conference on May 15 and 19, 2020, before the Honorable Allison H. Goddard, magistrate judge.  These efforts culminated with the Settling Parties agreeing to settle the Litigation for $3,150,000.00, subject to agreement on non-monetary terms and approval by the Court.

On January 7, 2021, the Court entered an order preliminarily approving the proposed Settlement, authorizing the mailing of this Notice to potential Class Members, and scheduling the Settlement Hearing to consider whether to grant final approval of the Settlement.

The Settlement Benefits

The Settlement Fund consists of Three Million One Hundred Fifty Thousand Dollars ($3,150,000.00) in cash plus any interest earned theron. A portion of the settlement proceeds will be used to pay attorneys' fees expenses to Lead Counsel, to pay administration expenses, any award to Lead Plaintiff, and to pay taxes and tax expenses. The balance of the Settlement Fund will be distributed, in accordance with the Plan Allocation described in the Notice, to Class Members who submit valid and timely Proofs of Claim.

Further Information

This website and the Notice summarize the Settlement.  For more details regarding the Settlement please reference the Settlement Agreement, or other documents filed in the case under the “Court Documents” link on the left.  You may also contact the Claims Administrator or Lead Counsel for further information regarding the Settlement:

Claims Administrator:

Obalon Therapeutics Securities Settlement

c/o A.B. Data, Ltd.

PO Box 173031

Milwaukee, WI  53217

(877) 883-7664

info@ObalonSecuritiesLitigation.com


Lead Counsel:

Rachel L. Jensen

ROBBINS GELLER RUDMAN & DOWD LLP

655 West Broadway, Suite 1900

San Diego, CA  92101

Rachel Jensen: rachelj@rgrdlaw.com

Telephone: (800) 449-4900

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