Synergy Pharma Investors Win Revival of Suit Over Stock Dilution

Synergy Pharmaceuticals Inc. shareholders will be able to pursue some securities fraud claims against the bankrupt drugmaker’s former officers, the Second Circuit ruled Monday.

The investors adequately alleged false statements, with the necessary level of intent, about the Synergy’s access to “non-dilutive capital” four days before the company issued a dilutive share offering, the appeals court said in an unpublished memorandum opinion.

• The November 2017 dilution allegedly depressed the value of the investors’ stock
• Court declines to revive claims of misstatements related to side effects of Synergy’s sole commercial product, Trulance
• Investors alleged facts about “non-dilutive capital” statement with “strong ...