good morning your hono about how the data looked at the existing data so that's eight current were his and his story and historical statement of presence of a fact of present fact and based on for those false statements that the data was good they said they remained on track for p m a approval that there was nothing in the data that would affect the provability and so they had quite a bit of data and beginning in two thousand and fifteen early two thousand and fifteen into logics noticed that there was a serious problem with migration of the device from the site of implantation so that it was in danger in patients lives and throughout two thousand and fifteen this the problem got worse and worse until in october two thousand and fifteen it became a crisis situation confidential witness one who was the director initially the director of research and work with the clinical trials analogous in europe also to work with the doctors in europe because the much of the clit most of the clinical trial patients were in europe so the global global registry was we're international centers and a large portion of the forward i v study was international patients so he was involved in not just the clinical trial development but also dealing directly with the doctors where the direct travel the sale of the the device commercially so he had very very good st hand knowledge personal knowledge as to how the the product was doing and he along with the vice president of clinical affairs mr love and via sherman the director of global vice president global clinical affairs and they sat down and tried to find out what what the problem was and well they discussed what the how to solve the problem or the only thing they could do they could figure out they had no idea why the device was was migrating what they did know the only commonality they could if they could find out was that it was migrating predominantly in patients with thrombosis and they longer term data the long product was fairness how does that give rise to a strong inference i enter that they were making false statements  on track for approval because they knew that a the approximately forty percent of the patients according to the mcdermott he admitted it was about forty percent of the patients that would fall under the a revised were they think they pleaded with mr mcdermott to revise the i a few in november two thousand and fifteen to protect patient safety he refused he refused why did he refuse because if he refused two things were going to short right because because they throw out forty percent of the five hundred patients that they knew that this was doomed to fail that they were never going to get the approval on the scale no well they knew there about it was the risk that the approval was was at substantial risk but no the risk was much greater than they suggested there's always risks of something going wrong right but they've consistently reassure investors at every turn and every conference call he said getting approval is our top priority for the company that's what he said every conference calls in the in the excerpts of the record the supplemental edge of the record conference calls each com top priority for the company and each time  it was it was believed that there could be a link to loss of smell that was only based on the un very small number of reports but but knowing of those problems the supreme court found that that the statements that everything that that that the sales were going well that things were great were were false or misleading and so it's very similar to that they they were obligated to give reassurance to the investors but they see the supreme court said that that by by initiating an addition they asked another doctor to do some additional study work right and that that supreme court said gave rise to an inference that they knew it was a serious problem here the c e o created this task force they had five people working on this on this problem nonstop that's what they said they were doing this every day they were giving weekly if not sometimes daily reports to the c but the question is what they say about that and judge collins question to you was you know that's that's a pretty general question you know we're doing we're doing we're doing fantastic in in europe because if they're talking about  europe yeah it looks like looks like things are on the up things were things were good and that things like that would be responsive to that and that the data is is that scientific data is that financial data and the question is what what  they represent to investors at the time so when they're talking about the data they're clearly talking about the click back about data being submitted to the f d a in support of the clinical trial now the strongest she says i'm sure that provide the intimate details of your f d a discussions but maybe give us a little bit more color more sense of comfort that there is not something else going on that there is no sort of red flag raised in terms of data that they saw the f d a saw i guess anything that you could give us that gives us any comfort that that would be helpful so you're reading they as being the f d a yes chris are you referring to and then he responds sure so the three reasons this is mcdermott there are three reasons that the agency so he he clearly understands that to be the f d a will typically consider sending a device to the panel is one if there is any new clinical issues of safety pool study that wasn't my question my question was did the statement follow the release of the liverpool so yes it's a little part of the study was published in april of two thousand and sixteen yes and he said and he made the point and that was that that was one year data  that was also the foremost formal study that have been conducted really by anybody was i mean it was a public it was a study was released publicly it was eighteen patients done by hospital based on the hospitals experience with now it's up to a year so it  was compared to the clinical data that the company had it was tiny in and i want to say in significant but of of no import because the company had six thousand patients by that time five hundred in clinical trials and five thousand five hundred in its commercial commercial use which tends to you specifically sense that they had the idea e p had twenty months data as of april two thousand and sixteen they had twenty one follow up data in the in the global registry trial so by august they had twenty four months follow up data for sure that's a june th thank you ok and where where in the complaint does it discuss that data  and twenty eight a confidential witness says that when mcdermott made made that those statements on that conference call st that one about not being any rate fled flags and everyone see the data and there's no issues there he also said i'm like no where the data based upon the idea results data from other international studies and our worldwide experience which now includes over six thousand patients so in that statement the company is saying that in response to the f questions they've given them there they've given him all the information and based on all the information including their id economical results data from other international studies and the world wide experience which now includes over six thousand europe what they were working collaboratively what's false in that statement because knowing that there's an urgent crisis with patients with migration and knowing that the f has been asking them about that problem and has asked for additional analysis because they because it's an issue was when he said on the on a conference call that follows me says oh there's nothing in the data there's nothing he specifically says there's nothing that could affect the provability if you go further down that paragraph he says he says he asked another analyst says can we talk a little bit about what type of additional data or questions your c v and he says oh yes i don't want to get to detail joan but what i can tell you is that none of the questions we got asked her what i would characterize as big surprises some clarification on things some request for additional analysis of some additional testing nothing that would suggest an arab view nothing that's pretty strong said nothing that would even suggest any question or risk of a provability or even risk of a provability now he knows at that point that this is a sticking early two thousand and sixteen revised a few protect patients he refused that refusal shows shows malice shows bad faith shows a lack of his his throwing patients under the bus to protect his market share is immoral and it's it's it it clearly shows a lack of of honesty a that is correct and i think there is an open question whether under the circumstances of this case where a nd and then a complaint is filed after the sole c w has disavowed the attributions whether under those circumstances the court's purview to address whether or not a trial court ought to consider a disavowal in determining what weight to put upon attributions to a c w that is not necessary to this quarter of you have it because again is what is the nature of the migration problem that's alleged in the complaint we have point to pockets of data the data comes from the r d clinical trial and it comes from the global registry the information coming from understand the sort of course theory of the plane it's that based on the longer term use in europe there was an erroneous in the company that remark where people have had this long enough the migration problem starts to show up therefore when you're doing a study last you from that that when you hit the two year mark it's going to hit the wall and to then being aware of that sort of bomb under the desk to just say everything's fine when you know that this is as the study runs long enough the problem's going to show up that's the basic theory of falsity tell me why that doesn't make well the it's not it's alien to the factual allegations in the complaint that the complaint establishes references to a stream of complaints it's not specific whether those reports are on label or off label it does not say whether those reports occur in the appeal so at that point in time the market informed of the restricted haitian population the company has imposed in response to the data and the id trial and what is the market do well according to plaintiff it yawns there is no that's not  legislative disclosure there's no that stock drop but perhaps even more critically as you know one hundred and fifty one and analysts asked mr mcdermott what about your commercial experience and he responds by saying we're seeing reports of migration and the single digits and there's nothing in the complaint to challenge that as being an accurate statement but what does that mean well if you take the plaintiff's allegation you have six thousand commercial patients having been treated and you see them perhaps even at the low end of a single digit percentage that's two percent we're body of the device of the replies i if you that's being discussed that same day but there's that the defendant's accurately describing the commercial experience of migration on top of that mr mcdermott goes on he says but we also understand there's under reporting in the commercial channel so the market that point is told that it actually is marketed in the in the commercial channel that's in the single digits of percentiles and that the market just assume that it's actually more than that because i'm reporting typically in the commercial setting it's not a clinical study where you have one for enter or a step is falsely the problem has the plan to score theory is disclosed on him her st with no market drop and therefore there cannot be a securities fraud played in this case champ and he said low single digit now that was untrue because if you look at the complaint and other excerpts of the record  it's two point three percent because the confidential witness i specifically said that there was a spike in fact the company admitted there was a spike after one year a spike between year one and your two a spike of migrations so if two three percent is less than a problem it meets the primary endpoint then clearly it's more than slows the two three percent it's more than low single digits so but  importantly is that on that not the st conference call the c e o said two critical things st he said it wasn't going to affect our market share because we because we'll just will we're just going to use our other devices the eve our device for these patients who who who fit outside the revised die if you number one number two he said it will not affect our timeline for f d a approval he specifically assured investors will have no effect and then two weeks later he doesn't about face and says it's going to it's going to be another year for approval and that's when the stock price drops and then the analysts who are in the complex pacifically said two weeks two or three weeks ago they just told us everything was fine there was a going to be the way and now we're hearing the situation is far far worse and there's a stock drop so he has been dissembling to investors entire time that he's on these conference calls downplaying and concealing serious problems that were affecting the risk the likelihood of provability of the approval of this product as well as concealing that the addressable market was going to be much much forty percent smaller so these are material facts under under matrix and under a reader these are facts the likelihood of a proof of approval is something investors would deftly want to want to know about the company it minute it was a top priority and the company concealed thank you council have let you go over