Zicam Lawsuit Alleges Fraud

A new Zicam shareholder lawsuit filed last week in U.S. District Court in Phoenix Arizona claims Matrixx Initiatives’ executives withheld adverse safety reports from its shareholders as company executives dumped shares of Matrixx stock just prior to the FDA recall of some Zicam intranasal products. The lawsuit claims that company officials have known as far back as 1999 that the nasal products had safety issues.
Since the product recall, Matrixx has faced lawsuits claiming Zicam users have contracted anosmia, a loss of the sense of smell. The company has denied those claims and has been successful in fighting those claims in several federal court cases. However, a new study now links some Zicam products with anosmia.
The shareholder lawsuit claims that Matrixx CEO William Hemelt sold $379,000 in company stock while Timothy Clarot, vice president of research and development, sold $2,000,000 in stocks. According to the lawsuit, the two company executives sold the stock using knowledge of non-public information about Zicam.