Investors punish Vascular Solutions following indictment

Investors Friday dumped shares of Maple Grove-based Vascular Solutions Inc. following news of a federal grand jury indictment against the company and its CEO.

The company's share price dropped about 20 percent in heavy trading Friday morning and afternoon.

The indictment accuses the company and its top executive of conspiring to market a medical device for unapproved uses to treat vein problems.

"Wall Street doesn't like surprises and they particularly don't like negative surprises," said Thom Gunderson, an analyst with the investment firm Piper Jaffray. "No matter what the facts turn out to be and who wins in the legal battle, the headline that a company and its CEO have been indicted by a federal grand jury just doesn't play well."

It was surprising that federal prosecutors focused on a product that accounted for just one tenth of one percent of the company's sales over seven years, he said, adding it could take years for the matter to be resolved.

Vascular Solutions says the allegations are false and stem from a misguided investigation.