BUS621 DB6

BUS621 DB6 - DISCUSSION BOARD 6: NOT LIABLE 1) Overview in...

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DISCUSSION BOARD 6: NOT LIABLE 1) Overview in the Case of EP MedSystem v EchoCath In the case of EP MedSystem v EchoCath, MedSystems filed a lawsuit against EchoCath alleging that CEO, Frank DeBernardis enticed MedSystem into investing $1,400,000 in EchoCath. MedSystem stated that the CEO of EchoCath assured MedSystem that lengthy negotiations had already taken place with 4 prominent medical companies: Uro-Health, Johnson & Johnson, Medtronic and C.R. Bard Inc to market EchoCath’s women health products, and that those contracts with these companies were "imminent" (EP MedSystems v EchoCath Inc, 2000). Relying on cautionary language contained in public documents filed by EchoCath with the Securities Exchange Commission, the district court held that these representations were immaterial as a matter of law under the "bespeaks caution" doctrine and the general test for materiality (EP MedSystems v EchoCath Inc, 2000). It also held that MedSystem failed to adequately plead scienter, reasonable reliance, and loss causation (EP MedSystems v EchoCath Inc, 2000). The complaint was dismissed, but MedSystem later appealed the District Court’s decision (EP MedSystems v EchoCath Inc, 2000). The court reversed the decision of the district court, finding that there was a statement of fact in the context presented by MedSystem complaint that could be found to meet the requirement of materiality (EP MedSystems v EchoCath Inc, 2000). Moreover,
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This note was uploaded on 01/07/2012 for the course BUS 621 taught by Professor Notsure during the Fall '10 term at Liberty.

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BUS621 DB6 - DISCUSSION BOARD 6: NOT LIABLE 1) Overview in...

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