NeurogesX, Inc. (Nasdaq: NGSX) shareholder litigation in connection with alleged securities fraud
Levi & Korsinsky announces that a class action lawsuit has been commenced in the United States District Court for the Southern District of New York on behalf of investors who purchased NeurogesX, Inc. (“NeurogesX” or the “Company”) (Nasdaq: NGSX) common stock between May 9, 2011 and September 27, 2011.
The complaint alleges that the Company’s Board of Directors issued materially false and misleading statements and/or failed to disclose material adverse facts concerning the employment of Dr. Jeffrey K. Tobias, the Company’s former Chief Medical Officer and Executive Vice President of Research and Development. Specifically, the complaint alleges that representatives of NeurogesX, including Tobias himself, failed to disclose and/or actively concealed the fact that Tobias was seeking other employment. As a result of the aforementioned allegations, NeurogesX’s stock traded at artificially high prices.
On September 27, 2011, the Company announced Tobias’ resignation. Upon this announcement, shares of NeurogesX declined almost 40%. By October 3, 2011, the Company had lost over half its market value.