Star Scientific Inc. said Tuesday that it plans to vigorously contest allegations in a lawsuit filed against the dietary supplements and cosmetics company.
A lawsuit was filed in the U.S. District Court for the Eastern District of Virginia on behalf of people who bought Star Scientific shares between October 31, 2011 and March 18, 2013. The complaint says the company made false and misleading statements about the company's business, operational and compliance policies.
Star Scientific said last week that the company, its directors, and others received subpoenas from the U.S. Attorney's Office for the Eastern District of Virginia. The company said it believes the main focus of the investigation is its securities, including private placements and related transactions dating to 2006. In a form filed with the Securities and Exchange Commission, Star said it is responding to the subpoenas and plans to cooperate fully with the investigation.
The Richmond, Va., company received the subpoenas in late January and February. It hired a law firm to conduct an internal investigation.
Star Scientific said Tuesday that the complaint makes several allegations about the company's actions but it plans to defend itself against all of them, and it is "confident the meritless nature of this lawsuit will cause it to be ultimately dismissed".
Shares of Star Scientific fell 13 cents, or nearly 8 percent, to close at $1.48. The stock has traded in a range of $1.37 to $5.05 over the past 52 weeks.