A class action has been filed against Advanced Neuromodulation Systems, Inc. (NasdaqNM:ANSI), and certain of its officers and directors by stockholders who purchased the company's common stock between April 24, 2003 and February 16, 2005. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. The stockholders seek to recover compensatory damages for the loss of value of their stock.

Advanced Neuromodulation Systems, Inc. (ANSI), designs, develops, manufactures and markets advanced implantable neuromodulation devices that improve the quality of life for people suffering from chronic pain.

According to a press release dated March 1, 2005, a class action lawsuit was filed on behalf of purchasers of the securities of Advanced Neuromodulation Systems, Inc., seeking to pursue remedies under the Securities Exchange Act of 1934.

Specifially, the complaint alleges that defendants' Class Period statements about the Company's strong performance, made in quarterly press releases and SEC filings, were materially false and misleading because: (a) as part of its marketing strategy, the Company improperly paid certain physicians $1,000 for each device implanted in patients; (b) the Company's strong growth was driven, in material part, by improperly paying off physicians to recommend and implant ANSI products in patients; (c) the Company's growth was dependent on an improper and unethical practices that were inherently unsustainable, presenting a material and undisclosed risk to ANSI's business and stock price; and (d) the Company's much-touted relationship with its physician customers was, in fact, based on payments to physicians for recommending the Company's products and did not, as defendants represented, reflect growing acceptance of its products based on their benefits.

The complaint further states defendants engaged in the alleged wrongdoing so that they could profit by selling their personally held ANSI shares at artificially inflated prices. During the Class Period, ANSI insiders, including certain of ANSI’s officers, sold a total of 700,759 shares of ANSI stock for gross proceeds of $28,617,666.

On or around February 17, 2004, before the open of trading, defendants revealed that the Company had received a subpoena from the Inspector General, Department of Health and Human Services, "requesting documents relating to the Company's sales and marketing, reimbursement, Medicare and Medicaid billing, and certain other business practices." In addition, defendants announced that revenues in the first quarter of 2005 could be below previous expectations, based on early indications. In reaction to this announcement, the price of ANSI common stock plummeted, falling from $37.60 per share on February 16, 2005 to $29.37 per share on February 17, 2005, a one-day drop of 22% on unusually heavy trading volume of more than 7.9 million shares.

If you bought Advanced Neuromodulation Systems, Inc. securities between April 24, 2003 and February 16, 2005, inclusive, and would like to obtain information about the lawsuit, then you are invited to call (866) 467-1400 to speak with an attorney.