SOURCE: Kahn Swick & Foti, LLC

November 22, 2010 18:22 ET

Kahn Swick & Foti, LLC and Former Louisiana Attorney General File Suit Against MELA Sciences, Inc.: Remind Investors With Large Financial Interests of Important 1/21/11 Deadline - MELA

NEW ORLEANS, LA--(Marketwire - November 22, 2010) - Kahn Swick & Foti, LLC ("KSF") and KSF partner, Former Attorney General of Louisiana, Charles C. Foti, Jr., announce the commencement of the firm's securities fraud class action lawsuit against MELA Sciences, Inc. ("MELA" or the "Company") (NASDAQ: MELA). The lawsuit was filed in the United States District Court for the Southern District of New York on behalf of purchasers of the common stock of the Company between February 13, 2009 and November 16, 2010, inclusive (the "Class Period"). No class has yet been certified in this action.

What You May Do
If you are a MELA shareholder and would like to discuss your legal rights and how this case might affect you and your right to recover for your economic loss, you may, without obligation or cost to you, e-mail or call KSF Managing Partner, Lewis Kahn (lewis.kahn@ksfcounsel.com), toll free, 877-515-1850, or via cell phone any time at 504-301-7900, or KSF Director of Client Relations, Neil Rothstein, Esq. (neil.rothstein@ksfcounsel.com), toll free at 877-694-9510, or via cell phone any time at 330-860-4092. If you wish to serve as a lead plaintiff in this class action by overseeing lead counsel with the goal of obtaining a fair and just resolution, you must request this position by application to the Court by January 21, 2011. Any member of the putative class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member. KSF encourages both institutional and individual purchasers of MELA to contact the firm. The ultimate resolution of any securities class action is strengthened through the involvement of aggrieved shareholders and lead plaintiffs who have large financial interests. KSF also encourages anyone with information regarding MELA's conduct during the period in question to contact the firm, including whistleblowers, former employees, shareholders and others.

About the Lawsuit

MELA and certain of its Officers and Directors are charged with making a series of materially false and misleading statements related to the Company's business and operations in violation of the Securities Exchange Act of 1934.

MELA operates as a medical device company that focuses on the design and development of a non-invasive, point-of-care instrument to assist in the early diagnosis of melanoma. MELA's flagship product, MelaFind, features a hand-held imaging device that uses automatic image analysis and statistical pattern recognition to help identify lesions to be considered for biopsy to rule out melanoma. 

The Company noted that it entered into a binding Protocol Agreement with the United States Food and Drug Administration ("FDA"), which is an agreement for the conduct of the pivotal trial in order to establish the safety and effectiveness of MelaFind. The Company noted that the data accrual phase of the MelaFind pivotal trial was completed in the third quarter of 2008 and the image processing classification algorithms were finalized in the fourth quarter. Nevertheless, throughout the Class Period, Defendants conditioned investors to believe that FDA approval of MelaFind would be forthcoming through a host of materially false and misleading statements regarding the status of MelaFind's ongoing clinical studies, and the safety and efficacy of the Company's products. For instance, on February 13, 2009, Defendants announced "positive top-line results of its pivotal trial of MelaFind, a non-invasive, point-of-care instrument to assist in the early detection of melanoma, the deadliest form of skin cancer."

In touting positive aspects of MelaFind, Defendants were able to, among other things: (a) deceive the investing public regarding the Company's business, operations, management, future business prospects and the intrinsic value of MELA's common stock; (b) deceive the investing public regarding MELA's business and management; (c) deceive the investing public regarding the efficacy of MelaFind and its prospects for FDA approval; (d) enable Defendants to sell almost $79 million of MELA's common stock to the public while in possession of material adverse non-public information about the Company; and (e) cause plaintiff and other members of the Class to purchase MELA common stock at artificially inflated prices.

Finally, on November 16, 2010, however, investors learned the truth concealed by Defendants' Class Period misstatements. On that date, it was reported, in part, that MelaFind "could cause harm because of the potential for misdiagnosis," and that "FDA staff pointed to numerous problems with Mela's study of the device, called MelaFind, including a significant lack of data, and urged a new clinical trial."

On this news, investors were shocked to learn the truth regarding MelaFind. As a result, MELA's stock price plummeted approximately 46% on heavy trading volume, to close at $2.92 per share. While shares have traded slightly higher days later after an FDA advisory panel narrowly voted in favor of MelaFind, most Wall Street analysts are still not optimistic on chances for approval, according to an AP news report from November 19, 2010.

About Kahn Swick & Foti, LLC
KSF, whose partners include the Former Louisiana Attorney General Charles C. Foti, Jr., is a law firm focused on securities class action and shareholder derivative litigation with offices in New York and Louisiana. KSF's lawyers have significant experience litigating complex securities class actions nationwide on behalf of both institutional and individual shareholders. Recent cases include In re Virgin Mobile USA IPO Litigation, 2:07-cv-05619-SDW-MCA (D. N.J.), Co-Lead Counsel, $19.5 Million Settlement Preliminarily Approved; In re BigBand Networks, Inc Securities Litigation, 3:07-CV-05101-SBA (C.D. Cal.), Co-Lead Counsel, $11 million settlement; In re U.S. Auto Parts Networks, Inc. Securities Litigation, 2:07-cv-02030-GW-JC (C.D. Cal.), Lead Counsel, $10 million settlement. KSF is also federally court-appointed Co-Lead Counsel in THE shareholder derivative cases against AIG and Bank of America (Merrill Lynch merger) emanating from their recent multi-billion dollar economic declines.

To learn more about KSF, you may visit www.ksfcounsel.com.

Contact Information

  • Contact:
    Kahn Swick & Foti, LLC
    Lewis Kahn
    Managing Partner
    877-515-1850
    or after hours via cell phone 504-301-7900
    lewis.kahn@ksfcounsel.com
    206 Covington St.
    Madisonville, LA 70447