A short-selling firm on Monday stood by its allegation that cardiac implants manufactured by St. Jude Medical are vulnerable to cyberattacks, and submitted a 53-page legal filing aimed at substantiating the claim.
The filing, submitted to a federal Minnesota court by Muddy Water Capital, cited analysis conducted by cybersecurity firm Bishop Fox asserting the devices are faulty. The San Francisco-based investment firm, backed by cybersecurity research firm MedSec, warned against St. Jude’s pacemakers and defibrillators in August and told investors they could be sabotaged by hackers.
St. Jude filed suit against Muddy Water and MedSec on Sept. 7, and claimed they had intentionally disseminated false information in order to manipulate the company’s stock price. Shares in St. Jude dropped from $85 to $78 in a matter of days after the initial allegation, while federal officials in the Food and Drug Administration and Department of Homeland Security opened an investigation.
The FDA said in a statement that it did not have a position on the litigation, but advised patients to continue using the devices while the investigation continued. “The benefits of the devices far outweigh any potential cybersecurity vulnerabilities,” the agency said.
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The case has garnered additional attention as the result of a congressional bid by former St. Jude executive Angie Craig, a Democrat running for a House seat in Minnesota’s second congressional district. Craig has been the top recipient of contributions from the medical device industry this year — she received $126,675 from her former employer and an additional $14,250 from device manufacturer Medtronic.
The connection makes Craig a top prospect for an industry that has not traditionally been known for fielding congressional candidates. Republicans have sought to use the hacking allegations in her race, and state GOP chair Keith Downey has questioned what Craig “may have known” about the issue when she worked at the company.
Democrats have been mum on the issue. Craig did not respond to a request for comment from the Washington Examiner.
St. Jude spokeswoman Candace Steele Flippin claimed in an email to Reuters that those making the allegations were intentionally trying to mislead consumers. “We continue to feel this lawsuit is the best course of action to make sure those looking to profit by trying to frighten patients and caregivers are held accountable for their actions,” she wrote.
