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On June 8, 2022, among other things, the media reported that Abbott and its leaders were aware of the whistleblower’s formal allegations in early 2021 that the Company’s Sturgis facility suffered from severe, widespread product safety deficiencies and regulatory violations that put infants at serious risk.
Abbott’s stock price dropped 3.5%, from a closing price of $116.88 per share on June 7, 2022, to a closing price of $112.71 per share on June 9, 2022.
Back on September 20, 2021, the FDA began a routine four-day inspection of the Sturgis facility, and reported privately to Abbott that the facility “did not maintain a building used in the manufacturing, processing, packing or holding of infant formula in a clean and sanitary condition.”
By at least September 20, 2021, Abbott received complaints of infant deaths linked to Abbott’s infant formula.
However, In annual circulars and Environmental, Social, and Governance (“ESG”) Global Reports, Abbott emphasized how its “nutrition business ensures food safety through a tightly controlled manufacturing process that encompasses all steps from accepting materials from suppliers through to final product distribution.” Abbott represented that “we monitor and verify microbiology, packaging integrity, and nutrient and lot control. We complete extensive finished product testing before releasing it for commercial distribution.” Moreover, Abbott promised investors and the public that any complaints of safety or other concerns would be fully investigated and brought to the attention of the Company’s Chief Ethics Compliance Officer who in turn “monitors all government guidance.”
All things considered, there are reasons to suspect that:
1) The Company has long prioritized profit over children's health.
2) Informed investors in bad faith, and even misled on some important aspects of the business.
Failure to Disclose,
Shock Event Date
08 June 2022