Outset Medical Leaders Sued Over Dialysis Device Marketing

Outset Medical Inc.'s board and top executives harmed the device maker by allowing false statements tied to its dialysis system’s marketing, which ultimately caused massive stock tumbles, an investor alleges.

Four of the defendants engaged in insider trading while the stock was artificially inflated, netting total proceeds of about $36 million, Marie Chappel says. Chappel filed her derivative suit on behalf of the company Nov. 29 in the US District Court for the Northern District of California.

The directors and executives were responsible for Outset’s positive statements about its business, Chappel says. The statements were misleading because the company didn’t ...