St. Jude Medical is suing hedge fund Muddy Waters after the financial firm circulated claims that St. Jude’s pacemakers were vulnerable to cyber attacks, according to a press release Wednesday.
St. Jude claims that Muddy Waters is “intentionally disseminating false information,” in order to lower St. Jude’s stock price, according to the Financial Times. Stock prices for St. Jude fell 10.4 percent following the pacemaker allegations made by Muddy Waters in late August.
The hedge fund’s analysis found that St. Jude pacemakers were vulnerable to “two types of cyber attacks,” and that it would take at least two years to fix the problem, Muddy Waters reports. The pacemakers are susceptible to hacking from up to 50 feet away, according to Muddy Waters analysis.
Eliminating production and sales for two years as Muddy Waters suggests would reportedly cost St. Jude Medical at least half of their profits.
Muddy Waters told the press that St. Jude puts profits before patients, while St. Jude responded, saying that the claims made by Muddy Waters “demonstrates a total disregard for the patients whose lives depend on cardiac rhythm management devices and their conduct is indefensible,” the FT reports.
President and CEO of St. Jude Medical, Michael T. Rousseau, said the firm felt that legal action was “the best course of action to make sure those looking to profit by trying to frighten patients and caregivers, and by circumventing appropriate and established channels for raising cybersecurity concerns, do not use this avenue to do so again,” Zero Hedge reports.
This isn’t the first time that St. Jude Medical has faced such claims. A patient sued the company claiming their doctor advised them not to use the pacemaker, the FT reports.
The company’s top priority is “to reassure patients, caregivers and physicians who use our life-saving devices that we are committed to the security of our products and to ensure patients and their doctors maintain ongoing access to the proven clinical benefits of remote monitoring,” St. Jude Medical VP and CMO Mark Carlson said to Zero Hedge.
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