Case: 1:23-cv-00296 Document #: 1 Filed: 01/18/23 Page 1 of 48 PageID #:1

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION

LARRY HUETTEMAN, derivatively, on Case no. 1:23-cv-296

behalf of ABBOTT LABORATORIES INC.,

Plaintiff,
v.

ROBERT B. FORD, ROBERT E. FUNCK,

JR., JOSEPH MANNING,
ROBERT J. ALPERN, M.D., ROXANNE S.
AUSTIN, SALLY E. BLOUNT, PH.D.,
PAOLA GONZALEZ, MICHELLE A.
KUMBIER, DARREN W. MCDEW,
NANCY MCKINSTRY, WILLIAM A.
OSBORN, MICHAEL F. ROMAN, DANIEL
STARKS, JOHN G. STRATTON, GLENN F.
TILTON, CHRISTOPHER CALAMARI,
ANDREA WAINER, DANIEL
SALVADORI, ANDREW LANE, LOUIS
MORRONE, ROGER BIRD, JARED
WATKIN, WILLIAM WOODGRIFT,
MICHAEL DALE, SAMMY KARAM,
MICHAEL PEDERSON, GREGORY
AHLBERG, JOHN CAPEK, PHILIP
BOUDREAU, HUBERT L. ALLEN, and
CHRISTOPER SCROGGINS

Defendants,

ABBOTT LABORATORIES,

Nominal Defendant.

VERIFIED STOCKHOLDER DERIVATIVE COMPLAINT

By and through his undersigned counsel, Plaintiff Larry Huetteman (wPlaintiffx) brings

this shareholder derivative action on behalf of Nominal Defendant Abbott Laboratories

Corporation (wAbbottx or the wCompanyx) and against certain officers and directors of the

Company for breaches of their fiduciary duties as directors and/or officers of Abbott, under the

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Illinois Business Corporation Act (wIBCAx), 805 ILCS 5 (1983), insider trading, and for

violations of Section 10b and Rule 10b-5 of the Securities Exchange Act of 1934 (wExchange

Actx) and for contribution under Sections 10(b) and 21D of the Exchange Act. As for Plaintiffys

complaint against the Individual Defendants, Plaintiff alleges the following based upon personal

knowledge as to Plaintiff and Plaintiffys own acts, and information and belief as to all other

matters, based upon, inter alia, the investigation conducted by and through Plaintiffys attorneys,

which included, among other things, a review of Defendantsy public documents, analysts

conference calls, and announcements made by Defendants, United States Securities and

Exchange Commission (wSECx) filings, wire and press releases published by and regarding

Abbott, legal filings in various regulatory proceedings against Abbott, news reports, securities

analystsy reports and advisories about the Company, information readily obtainable on the

Internet, and review and analysis of court filings in the related securities class action lawsuit

alleging violations of federal securities law based on similar facts and circumstances alleged

herein, styled Pembroke Pines Firefighters & Police Officers Pension Fund v. Abbott

Laboratories, et al., Case No. 1:22-cv-4661 (the wSecurities Class Actionx), currently pending in

the United States District Court for the Northern District of Illinois. Plaintiff believes that

substantial evidentiary support will exist for the allegations set forth herein after a reasonable

opportunity for discovery.

I. NATURE OF THE ACTION

1. This is a shareholder derivative action that seeks to remedy wrongdoing

committed by Abbottys directors and officers from February 1, 2021 through June 8, 2022 (the

wRelevant Periodx).

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2. Abbott is an Illinois Corporation and Illinois based multinational medical devices

and health care company, selling medical devices, diagnostics, branded generic medicines and

nutritional products and generating revenues of $109 billion between 2019 and 2021.

3. The Companyys flagship products include infant nutritional product manufactured

at its facility in Sturgis, Michigan with common household names like Pedialyte, Similac, and

Ensure.

4. Abbottys primary manufacturing site for baby formula was located in Sturgis,

Michigan (wSturgisx). Prior to February 2022, Abbott had produced 40% of the United Statesy

baby formula and 40% of that amount was produced in Abbottys Sturgis plant which

manufactured infant formula feeding roughly one in six formula-fed babies in the United States.

5. This action describes Abbottys two decade long history of violations of FDA

regulations resulting in fines, consent decrees and other settlements with government agencies.

Despite repeated violations of compliance rules mandated by the Food and Drug Administration

(wFDAx), Abbottys directors failed, or refused, to implement, maintain and oversee any system of

reporting and controls that included the Sturgis facility despite repeated red flags. Abbottys latest

compliance failures allowed managementys scheme to maximize revenues at Sturgis, a major

provider of infant formula to the nation and a material source of revenue for Abbott from

government rebates for infant formula. Inflated infant formula revenues and concealment of

material adverse non-public information inflated Companyys stock price. The Defendant

Directors ignored lapses in infant formula manufacturing safety protocols that ultimately were

linked to serious infant illnesses and even deaths and concealed those risks in publicly filed SEC

filings which were signed by the Director Defendants. When the previously concealed facts were

revealed to the investing public, the market value of Abbott common stock declined.

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6. Throughout the Relevant Period and prior thereto, the Director Defendants, a

majority of whom were directors during Abbottys prior regulatory violation proceedings and

settlements, violated their fiduciary duties to ensure that Abbott had proper reporting systems

and adequate internal controls to detect and allow the Board to monitor the type of regulatory

non-compliance by Abbott which led to the recall of its baby formula products and a protracted

shutdown of the Sturgis facility in February 2022.1

7. Throughout the Relevant Period, the Individual Defendants made and/or caused

the Company to make false and misleading statements and omissions of material fact regarding

the compliance with FDA regulations regarding the safety and sanitation of Abbottys Sturgis

facility, widespread baby formula manufacturing deficiencies, the actual risk of regulatory

action, product recalls and plant shutdown presented by the conditions brought to Abbottys

executive officer and directorsy attention as early as February 2021.

8. Throughout the Relevant Period, due to the fact that the Director Defendants did

not create any operative information and control systems, Abbott management could operate

Sturgis to maximize production and profits at the expense of compliance. The Director

Defendants allowed Abbott to violate a prior agreement and consent decrees with the

Department of Justice.

9. The Defendants knew or should have known of a credible whistleblower

complaint provided to Abbott on or about February 19, 2021 but filed earlier. The whistleblower

had made a previous attempt to alert Abbott executives of regulatory violations. By at least

September 20, 2021, Abbott received complaints of infant deaths, conditions and practices at

Sturgis that were linked to Abbottys baby formula. Also on September 20, 2021, the United

1
See https://www.supplychaindive.com/news/timeline-infant-formula-shortage/624570/ (last visited January 13,
2023)

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States Food and Drug Administration (wFDAx) began a four-day inspection of the Sturgis facility

attended by nearly a dozen investigators and issued to Abbott a w483x Report which reported the

facility wdid not maintain a building used in the manufacturing, processing, packing or holding of

infant formula in a clean and sanitary condition.x The 483 report was ignored because when

inspectors returned in January 2022, the same violations were noted.

10. The FDA returned in January 2022 for follow-up inspections.

11. On February 17, 2022, the FDA publicly announced that it was investigating four

consumer complaints of infant illness related to powdered infant formula produced by Abbott in

Sturgis. The FDA stated that it had initiated an onsite inspection at the facility, and to date had

found several positive contamination results from environmental samples for a bacteria,

Cronobacter sakazakii (wCronobacterx), linked to infant illnesses and death. The FDA also

revealed that its review of Abbottys internal records indicated wenvironmental contamination

with Cronobacter and the firmys destruction of product due to the presence of Cronobacter.x

12. On the same day, Abbott issued a recall of certain baby formula products,

including the popular brands Similac, Alimentum and EleCare, all manufactured in Sturgis.

Abbott made no mention of the open FDA investigation. In the press release, Defendant

Manning, characterized Abbottys wvoluntaryx recall as wproactive,x stating: wWe know parents

depend on us to provide them with the highest quality nutrition formulas. Weyre taking this

action so parents know they can trust us to meet our high standards, as well as theirs.x

13. In the following days, Abbott was forced to close the Sturgis plant due to the

severe safety problems, shuttering one of the major sources of baby formula for the entire United

States, as well as certain Canadian and foreign markets. A nationwide shortage of baby formula

ensued. Without the Sturgis facility, the U.S. government was forced to take the unprecedented

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step of invoking the Defense Production Act to expedite production of infant formula and

authorize flights to import supply from overseas to keep the countryys most at risk population fed

and healthy.

14. After the whistleblower complaint was provided to the FDA and OSHA, the FDA

began an investigation including interviewing the whistleblower and gathering corroboration. A

redacted copy of the FDAys report of the whistleblower complaint was publicly disclosed in

April 2022 (the wReportx). That Report contained damning conclusions implicating Abbottys

directorsy dereliction of duties to ensure the creation, maintenance and functioning of

information and control systems: wEven though the acquisition [of Sturgis by Abbott] took place

many years ago, the Strugis site has never been fully integrated with Abbottys system and

internal controls.x The Report alleged that Abbottys management was aware of the issues at the

Sturgis facility well before the FDA 483 inspection. The Report stated that the whistleblower

complaint alleged that Abbott management falsified test records and released untested infant

formula to the market, and attempted to mislead the FDA during a 2019 inspection audit.

15. The FDA report concluded:

Abbottys inaction is also inconsistent with the Corporate Integrity

Agreement that it entered into with the Office of Inspector General
of the Department of Health and Human Services in May of 2012
as part of a plea agreement. United States v. Abbott Laboratories,
No. 12-cr-00026 (W.D. Va., filed May 7, 2012) [sometimes
hereinafter referred to as the wCIAx]. At the same time, Abbott also
entered into settlement agreements with various states. Thought
not directly applicable to Abbott Nutrition, the core concepts apply
in terms of the ongoing obligations on the part of Abbottys
management and board of directors. [Emphasis supplied]

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16. In addition, the Report stated complaint alleged that the Company used testing

procedures that management knew were deficient and that Abbott was unable to adequately trace

products subject to recall. The Report stated, inter alia:2

Most often, Complainant directed his concerns as to a lack of accountability to his

supervisor. But other members of management were involved, including officials
at the division level. His concerns were summarily dismissed as wpetty.x This
extended to situations where unaddressed PIRs were intentionally placed in batch
files after the release of a batch, thereby suggesting a regulatory violation.

At the Sturgis site, discipline is not applied consistently. Favored employees are
not disciplined in the same manner as those viewed as being outspoken as to
compliance issues. Enforcement is selective and inconsistent thereby signaling
retaliation to those who raise concerns.

More serious is the fact that members of management who are intimately involved
with circumventing what exist in terms of internal controls are not subject to any
discipline other than for failures to meet their metrics. These are individuals who
also repeatedly misled officials at the division and corporate level. These are
individuals who knowingly direct and approve of actions in direct violation of FDA
regulations. A culture of compliance does not exist at the Sturgis site as mandated
by the FDA and the Department of Justiceys guidance.

17. In June 2022, at Congressional hearings, House Appropriations Chair Rosa

DeLauro, who had publicly lambasted both Abbott and the FDA for the infant formula debacle in

recent months, praised the former employee for coming forward with new details about

conditions in the plant and questionable management and in an implicit endorsement of the

whistleblowerys claimsy veracity stated:

Their revelations highlight Abbottys investment in profit over people v as the

company time and time again seemed more interested in cornering its share of the
market instead of ensuring the product we give to our babies meets the highest food
safety standards,x DeLauro said in a statement to POLITICO.3

2
See https://www.marlerblog.com/files/2022/04/Redacted-Confidential-Disclosure-re-Abbott-Laboratories-10-19-
2021_Redacted-1-1.pdf (last visited October 25, 2022)
3
See https://www.politico.com/news/2022/08/04/baby-formula-plant-flaws-hidden-00049721

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18. Knowing that the whistleblower complaint and attendant regulatory attention and

inevitable 483 inspections could lead to the closure of the Sturgis facility, the largest baby

formula manufacturing facility in the U.S., and before disclosing it to the public, certain Abbott

insiders (referred to collectively as the Insider Trading Defendants) sold approximately $130

million worth of Abbott stock during the Relevant Period. These insiders had direct and

unfettered access to information about Sturgis violations and the incident and safety reports

concerning Sturgis, its shutdown, product recalls and federal law violations.

19. The Director Defendants violated their fiduciary duties and committed violations

of Section 10b-5 of the Securities Exchange Act of 1934 in an additional way by causing Abbott

to repurchase hundreds of millions of dollars of its own stock in the open market in the last

quarter of 2021 and first quarter of 2022 at artificially inflated prices.

20. Through this action, Plaintiff seeks to recover for Abbott its damages caused by

the Individual Defendantsy various breaches of fiduciary duties and violations of the federal

securities laws pled herein as well as disgorgement of insider trading profits. The Individual

Defendants owed and owe the highest fiduciary duties to Abbott and its stockholders. They were

aware of the violations of law occurring at a manufacturing facility that was of material

importance to the Company and its business prospects, as well as to the safety of consumers who

use the Companyys products. If the Director Defendants were not aware of events and

conductions at Sturgis since 2019 it was due to their failure to implement and maintain adequate

reporting and control systems and to oversee Abbottys and indeed the Boardys own compliance

with prior government orders, decrees and settlements. Likewise, the Individual Defendants were

aware of the requirement to provide truthful, accurate, and complete information pursuant to the

federal securities laws in SEC filings during the Relevant Period.

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21. Under the circumstances, demand upon the current board of directors would be

futile.

II. JURISDICTION AND VENUE

22. The Court has subject matter jurisdiction pursuant to 28 U.S.C. § 1331 and

Section 27 of the Securities Exchange Act of 1934 (the wExchange Actx) over the claims asserted

herein for, inter alia, violations of sections 10(b) of the Exchange Act and Rule 10b-5

promulgated thereunder (17 C.F.R.§240.10b-5) promulgated thereunder by the SEC.

23. This Court has supplemental jurisdiction over Plaintiffys state law claims pursuant

to 28 USC. §1367(a) diversity jurisdiction.

24. This Court has jurisdiction over each defendant named herein because each is

either a corporation that conducts business in and maintains operations in this District, is an

individual residing in this District, and/or is an individual non-resident who has sufficient

minimum contacts with this District to render the exercise of jurisdiction by the District courts

permissible under traditional notions of fair play and substantial justice.

25. Venue is proper in this Court in accordance with 28 U.S.C. §1391 because: (i)

Abbott maintains its principal place of business in this District; (ii) one or more of the

Defendants either resides in or maintains offices in this District; (iii) a substantial portion of the

transactions and wrongs complained of herein, including Defendantsy primary participation in

the wrongful acts detailed herein, occurred in this District; and (iv) Defendants have received

substantial compensation in this District by doing business here and engaging in numerous

activities that had an effect in this District.

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III. PARTIES

26. Plaintiff is a current stockholder of Abbott, was a stockholder of Abbott at the

time of the wrongdoing alleged herein, and continuously held Abbott stock at all relevant times.

A. Nominal Defendant

27. Nominal Defendant, Abbott is an Illinois corporation with principal executive

offices located in this District.

B. Current Director Defendants

28. The Current Director Defendants constitute of 12 of Abbottys current 13-member

board.

29. Robert B. Ford (wFordx) is Abbottys Chairman of the Board and Chief Executive

Officer. He has been a director since 2019 and assumed the role of Chairman in December 2021,

having been appointed President and Chief Executive Officer in March 2020. From 2018 to

2020, he was Abbottys President and Chief Operating Officer. He is currently a member and the

chair of the Executive Committee and was a member and the chair of the Executive Committee

during the Relevant Period.

30. Robert J. Alpern (wAlpernx) has been a director since 2008. He is currently a

member of the Public Policy Committee and the Nominations and Governance Committee and

was a member of the Public Policy Committee and the Nominations and Governance Committee

during the Relevant Period. He also sits on the Boards of Abbvie, Inc. and Tricida, Inc.

31. Sally E. Blount, PH.D. (wBlountx) has been a director since 2011. She is

currently a member of the Public Policy Committee and the Nominations and Governance

Committee and was a member of the Public Policy Committee and the Nominations and

Governance Committee during the Relevant Period. Ms. Blountys full-time employment appears

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to be as President and Chief Executive Officer, Catholic Charities of the Archdiocese of Chicago

and Professor at Northwestern University.

32. Paola Gonzalez (wGonzalezx) has been a director since 2021. She is currently a

member of the Audit Committee and was a member of the Audit Committee during the Relevant

Period. Gonzalezys full-time job is as Vice President and Treasurer of Clorox Company.

33. Michelle A. Kumbier (wKumbierx) has been a director since 2018. She is

currently a member of the Audit and Compensation Committee and was a member of Audit and

Compensation Committee during the Relevant Period. Kumbierys full-time job is President of

Briggs & Stratton LLC. She is also a director of Tennecco, Inc. and Teledyne Technologies Inc.

34. Darren W. McDew (wMcDewx) has been a director since 2019. He is currently a

member of the Nominations and Public Policy Committee and was a member of the Nominations

and Public Policy Committee during the Relevant Period. McDew also serves on the Board of

Rolls Royce, Inc; United Services Automobile Association and Boys & Girls Club of America.

35. Nancy McKinstry (wMcKinstryx) has been a director since 2011. She is currently

a member and chair of the Audit Committee and a member of the Compensation and Executive

Committee and was a member and chair of the Audit Committee and a member of the

Compensation and Executive Committee during the Relevant Period. McKinstryys full time job

is CEO and Chairman at Walter Klumers, N.V., she is also on the Board of Accenture, plc.

36. William A. Osborn (wOsbornx) has been a director since 2008. He is currently a

member and chair of the Nominations and Governance Committee and a member of the

Compensation and Executive Committees and was a member and chair of the Nominations and

Governance Committee and a member of the Compensation and Executive Committees during

the Relevant Period.

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37. Michael F. Roman (wRomanx) has been a director since 2021. He is currently a

member of the Nominations and Governance Committee and a member of the Compensation and

Executive Committees and was a member and chair of the Nominations and Governance

Committee and a member of the Compensation and Executive Committees during the Relevant

Period. Romanys full-time job is Chief President and CEO of 3M Company.

38. Daniel Starks (wStarksx) has been a director since 2017. He is currently a member

of the Public Policy Committee and was a member and of the Public Policy Committee a during

the Relevant Period.

39. John G. Stratton (wStrattonx) has been a director since 2017. He is currently a

member of the Audit and Public Policy Committees and was a member of the Audit and Public

Policy Committees a during the Relevant Period. Stratton is Executive Chairman at Frontier

Communications Parent Inc. and a board member at General Dynamics Corporation.

40. Glenn F. Tilton (wTiltonx) has been a director since 2007. He is currently a

member of the Audit, Public Policy and Executive Committees and was a member of the Audit

and Public Policy Committees a during the Relevant Period. Triton also serves on the Boards of

AbbeVie, Inc. and Philips 66.

C. Former Directors

41. Miles D. White (wWhitex) was a director from 1998 to December 2021. He is the

former CEO, and former chair of the Executive Committee and the Executive Chairman during

the Relevant Period.

42. Roxanne S. Austin (wAustinx) was a director from 2000 to April 2022.

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D. Officers

43. Defendant Robert E. Funck, Jr. (wFunckx) is Abbottys Chief Financial Officer and

Vice President, Finance. Funck assumed this role in March 2020. Prior to his appointment as

Chief Financial Officer, Funck served as Senior Vice President, Finance and Controller at

Abbott.

E. Vice Presidents

44. The Vice President Defendants all sold Abbott Labs stock during the Relevant

Period while in possession of material non-public information.

45. Christopher Calamari (wCalamarix) is Abbottys Senior Vice President, U.S.

Nutrition. He was appointed to this role in July 2021. Prior to assuming this role, Calamari

served as Vice President, Pediatric Nutrition. Calamari joined Abbott in 2005 and has held

marketing positions in the companyys Nutrition and Pharmaceuticals businesses.

46. Andrea Wainer (wWainerx) is Abbottys Executive Vice President, Rapid and

Molecular Diagnostics. She was appointed to this role in June 2019.

47. Daniel Salvadori (wSalvadorix) is Abbottys Executive Vice President and Group

President, Established Pharmaceuticals and Nutritional Products. He was appointed to this role in

December 2021.

48. Andrew Lane (wLanex) has been Executive Vice President, Established

Pharmaceuticals of Abbott Laboratories since 2017.

49. Louis Morrone (wMorronex) is Abbottys Senior Vice President, Rapid

Diagnostics. He was appointed to this role in July 2021. Prior to assuming his current role, he

served as Vice President, Transfusion Medicine.

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50. Roger Bird (wBirdx) is Abbottys Senior Vice President, U.S. Nutrition. He was

appointed to this role in February 2015.

51. Jared Watkin (wWatkiny) is Abbottys Senior Vice President, Diabetes Care. Prior

to assuming this role in June 2015, he served as Divisional Vice President, Technical Operations.

Watkin joined Abbott in 1996, when Abbott acquired Medisense, Inc.

52. Randell William Woodgrift (wWoodgriftx) is Abbottys Senior Vice President,

Cardiac Rhythm Management. He was appointed to this role in 2019. He previously served as

Vice President, Global Operations, Cardiovascular and Neuromodulation.

53. Michael Dale (wDalex) is Senior Vice President, Structural Heart Division. He

was appointed to this role in November 2019.

54. Sammy Karam (wKaramx) is a Senior Vice President, Emerging Markets in

Abbottys branded medicines business. Prior to assuming this position in February 2019, he

served as Divisional Vice President, Global Marketing and Commercial Execution.

55. Michael Pederson (wPedersonx) is Abbottys Senior Vice President,

Electrophysiology. He was appointed to this role in April 2020.

56. Greg Ahlberg (wAhlbergx) is Senior Vice President, Core Laboratory Diagnostics,

Commercial Operations. He was appointed to this role in October 2020.

57. Louis Morrone (wMorronex) is Abbottys Senior Vice President, Rapid

Diagnostics. He was appointed to this role in July 2021. Prior to assuming his current role, he

served as Vice President, Transfusion Medicine.

58. John Capek (wCapekx) is Executive Vice President, Ventures. Dr. Capek was

appointed to this role in June 2015. In this role, he leads Abbottys venture investment

organization as well as new ventures, including Abbott Electrophysiology. Previously, he had

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served as Executive Vice President, Medical Devices, and Senior Vice President, Abbott

Vascular.

59. Defendant Joseph Manning (wManningx) is Manning assumed this role in

December 2021.

60. Defendant Philip Boudreau (wBoudreaux) is Abbottys Executive Vice President

and Corporate Controller.

61. Defendant Hubert L. Allen (wAllenx) is and has served as Abbottys Executive

Vice President, General Counsel and Secretary since 2013.

62. Defendant Christopher Scoggins (wScogginsx) is or was Abbottys Executive Vice

President, General Counsel and Secretary since 2013.

IV. ABBOTT’S CORPORATE GOVERANCE

A. Abbott’s Code Of Business Conduct For Directors

63. Abbottys Code of Business Conduct for directors states in pertinent part:

XII. Code of Business Conduct

Directors shall adhere to the principles of Abbottys Code of

Business Conduct as it applies to Directors. Those obligations of
the directors are described below.

COMPLIANCE WITH LAWS

Directors shall comply with all laws, rules, and regulations

applicable to their capacity as directors of Abbott, including,
among others, the insider trading laws, rules and regulations.

REPORTING OF ANY ILLEGAL OR UNETHICAL

BEHAVIOR

Directors shall report violations of laws, rules, regulations of the

Code of Business Conduct to the Chairman of the Board, the Chief
Executive Officer, the Vice President and Compliance Officer, or
any other appropriate Abbott personnel.

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B. Abbott’s Code Of Business Conduct For Abbott Officers,

Employees, Contract Workers And Agents

64. Abbottys Code of Business Conduct for officers, employees, contract workers and

agents contains an introductory message by Defendant Ford, which states:

We create life-changing health technologies that help people live better, fuller lives.
Itys a privilege to do this work- and we need to do it in a way that lives up to the
nobility of our purpose, with the highest and most ethical of business practices.

***
The fundamental message of the Code is clear: itys up to us, as the people of Abbott,
to hold ourselves to the highest standards, to live up to our best ideals, and to operate
our business with the utmost integrity at all times. Our Code is here to help us do
so and to protect our most valuable asset as an organization - our reputation

65. With respect to Product Quality, The Code of Business Conduct states:

We produce and deliver safe, effective products that people trust.

We endeavor to maintain the highest level of quality throughout our business. This
effort starts with the sourcing of materials and the manufacture of our products and
moves through how we market, sell, and supply our products, including through
our business partners - delivering high quality is imperative every step of the way.
Our commitment to the health and safety of the people who use our products is
always at the forefront of everything we do.

***
Q What do I do if someone tells me about a product quality issue?

A If we become aware of an unfavorable user result that occurred while using an

Abbott product, we must report it to the appropriate individuals or groups within
Abbott. We must report adverse events with any of our products in the timeframe
required by our division procedures, even if we are not sure there is a cause-and
effect relationship between the product and the wevent.x

66. With respect to the Companyys compliance with applicable laws and regulations,

the Code of Business Conduct provides:

We adhere to all laws, regulations and Abbott requirements that apply to our
work.

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Every Abbott employee is expected to adhere to all laws and Abbottys policies,
procedures, principles and standards, including this Code. This is a fundamental
expectation and condition of employment. Abbottys policies and procedures cover
topics related to important aspects of our operations, including health care
compliance, quality, engineering, customs and trade, finance, security, purchasing,
human resources, and information systems, to help ensure that we comply with the
many laws and regulations governing our business. Such policies and procedures
enable us to detect, correct and prevent non-compliant activities.

67. The Individual Defendants violated the Code of Business Conduct by failing to

proactively monitor, test, upgrade and modernize the Sturgis facility, hiding the contamination

issues at the Sturgis, and the Companyys inability to accurately identify contaminated infant

formula products for recall. The Individual Defendants also violated the Code of Business

Conduct by engaging in or permitting the scheme to issue materially false and misleading

statements to the public and/or to fail to correct false and misleading statements regarding or

concerning Abbott, and by disguising his violations of law, including breaches of fiduciary duty,

insider trading, and the aiding and abetting thereof by the Individual Defendants, and failing to

report the same.

C. Abbott’s Board Committees

68. Abbottys has five standing committees of its Board of Directors: Audit

Committee; Compensation Committee; Executive Committee; the Nominations And Governance

Committee and Public Policy Committee. Both the Audit Committee and the Public Policy

Committee are responsible for compliance and risk management.

69. In 2021, Abbottys Audit Committee consisted of Defendants McKinstry (CH),

Gonzalez, Kumbier, Roman, Stratton and Tilton; Abbottys Public Policy Committee consisted of

Defendants Tilton (Ch); Alpern; Babineaux Fontenot (non-defendant); Blount; McDew; Starks

and Stratton. Defendants Tilton and Stratton sit on both committees. The Director Defendants

who were on those committees in 2021 constitute a majority of the current board.

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V. BACKGROUND

A. Abbott Labs’ Nutritional Product Business Is Material To Its Operations

70. Abbott is an Illinois corporation, incorporated in 1900. Abbottys principal

business is the discovery, development, manufacture, and sale of a broad and diversified line of

health care products.

71. In its 2021 10-K, Abbott describes its operations, in part as follows:

Abbott has four reportable segments: Established Pharmaceutical Products,

Diagnostic Products, Nutritional Products, and Medical Devices.

Nutritional Products
These products include a broad line of pediatric and adult nutritional products
manufactured, marketed, and sold worldwide. These products are generally
marketed and sold directly to consumers and to institutions, wholesalers, retailers,
health care facilities, government agencies, and third-party distributors from
Abbott-owned distribution centers or third-party distributors.

The principal products included in the Nutritional Products segment are:

€various forms of infant formula and follow-on formula, including Similac®, Similac® 360 Total
Care®, Similac Pro-Advance®, Similac® Advance®, Similac® Advance® Non-GMO, Similac
Pro-Sensitive®, Similac Sensitive®, Similac Sensitive® Non-GMO, Go&Grow by Similac®,
Similac® NeoSure®, Similac® Organic, Similac® Special Care®, Similac Total Comfort®,
Similac® For Supplementation, Isomil® Advance®, Isomil®, Alimentum®, Gainu, Growu,
Similac En Mei Liu, and Elevau;
€adult and other pediatric nutritional products, including Ensure®, Ensure Plus®, Ensure® Enlive®,
Ensure® (with NutriVigor®), Ensure® Max Protein, Ensure® High Protein, Glucerna®, Glucerna
Hunger Smart®, ProSureu, PediaSure®, PediaSure SideKicks®, PediaSure® Peptide, EleCare®,
Juven®, Aboundu, Pedialyte® and Zone Perfect®; and
€nutritional products used in enteral feeding in health care institutions, including Jevity®,
Glucerna® 1.2 Cal, Glucerna® 1.5 Cal, Osmolite®, Oxepa®, Freegou (Enteral Pump) and
Freegou sets, Nepro®, and Vital®.

Primary marketing efforts for nutritional products are directed toward consumers
or to securing the recommendation of Abbottys brand of products by physicians or
other health care professionals. In addition, nutritional products are also promoted
directly to the public by consumer marketing efforts in markets where permitted.
Competition for nutritional products in the segment is generally from other
diversified consumer and health care manufacturers. Competitive factors include

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consumer advertising, formulation, packaging, scientific innovation, price, retail

distribution, and availability of product forms. A significant aspect of competition
is the search for ingredient innovations. The introduction of new products by
competitors, changes in medical practices and procedures, and regulatory changes
can result in product obsolescence. In addition, private label and local
manufacturersy products may increase competitive pressure.

72. Abbott maintains 14 manufacturing facilities for its nutrition products globally.

73. Nutritional products were a major portion of Abbott revenues and earnings:

U.S. Pediatric Nutritionals 2,192 1,987 10 v 10

International Adult Nutritionals 2,632 2,228 18 1 17
U.S. Adult Nutritionals 1,364 1,292 6 v 6
Diagnostics v
Core Laboratory 5,128 4,475 15 3 12
Molecular 1,427 1,438 (1) 2 (3)
Point of Care 536 516 4 1 3
Rapid Diagnostics 8,553 4,376 95 2 93
Medical Devices v
Rhythm Management 2,198 1,914 15 2 13
Electrophysiology 1,907 1,578 21 2 19
Heart Failure 889 740 20 1 19
Vascular 2,654 2,339 14 3 11
Structural Heart 1,610 1,247 29 2 27
Neuromodulation 781 702 11 1 10
Diabetes Care 4,328 3,267 33 4 29

B. The Infant Formula Business Is Highly Regulated

74. Abbott is reportedly a major participant in the Special Supplemental Nutritional

Program for Women Infants and Children (wWIC Programx) which provides rebates to

manufacturers who supply infant formula and otherwise eligible. The benefits of the program to

Abbott are conditioned upon compliance with, inter alia, provisions of the Food Drug and

Cosmetic Act (21 U.S.C. 321) applicable to the production of infant formula at the Sturgis Plant.

75. Paramount to Abbottys manufacturing is its facility in Sturgis. The Sturgis facility

singlehandedly accounted for nearly half of its infant formula where Abbott manufactures,

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processes, packs, labels, holds and distributes infant formulas that are marketed under several

brand names throughout the United States.

76. Infant formula is a highly regulated food product that must be made in

compliance with the FDAys current good manufacturing practice (wCGMPx) requirements

established by FDA regulation. These regulations are designed to ensure the safety of infant

formula, and they require manufacturers to implement a system of controls to cover all stages of

manufacturing, including specific controls to prevent adulteration of infant formula from

microorganisms and bacteria.

77. The FDA has also implemented requirements for record-keeping, including a

requirement that manufacturers have procedures for handling all written and oral complaints.

78. Under these wInfant Formula Record Requirements,x manufactures must conduct

an investigation when a complaint shows a possible health hazard, and the failure to conduct

such an investigation renders infant formula produced under those conditions wadulteratedx

under the terms of the controlling statute.

C. Abbott’s Board Ignores Reports Of Compliance Failures At Sturgis

79. On or about February 16, 2021, OSHA received a whistleblower complaint

detailing unsafe manufacturing practices at Sturgis, and according to published reports sent a

copy three days later to the FDA and Abbott.

80. Abbott has a history of FDA violations of Abbottys manufacturing operations:

(a) In 1999, Abbott and the FDA entered into a consent decree wto ensure
[Abbottys] diagnostic manufacturing processes in Lake County Illinois
conform with FDAys current Quality Systems Regulationx Abbott Form 8-
K date November 2, 1999. Among other directives in the decree, Abbott
agreed to pay $100,000,000. That payment constituted approximately 18 of
Abbottys net earnings that quarter (ended September 30, 1999). The consent
decree and payment was the subject of a shareholder derivative action: In
Re Abbott Laboratories, U.S.D.C. N.D. Ill. (99 C 7246). The Seventh

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Circuit Court of Appeals held that given the circumstances, a shareholder

demand futility.

(b) In 1996 Abbott entered into a consent order with the Federal Trade
Commission which had alleged in a complaint that Abbott had
misrepresented the results of a survey of doctors as to recommendations of
Abbottys Ensure, an adult nutrition supplement and the nutritional value of
Ensure. The Consent Order would automatically terminate after 20 years,
or 2016 if there were no violations of the FTC consent decree.

(c) In 2010, the Sturgis site a beetle infestation which led to recalls and shut
down of the Plant. Report at 20, n. 57.

(d)(1) In May 2012, Abbott entered into a Corporate Litigation Agreement

(wCIAx) with the office of Inspector General of the Department of Health
and Human Services as part of a plea agreement. See e.g., U.S. v. Abbott
Laboratories, No. 12-cv-00026 (W.D. Va.) alleging that Abbott misbranded
and falsely marketed its Depakote product. The CIA required Abbott to pay
$500,000,000 fine and forfeit $198,000,000 in profits. Abbott was put on a
five year probation period through October 2017.

(d)(2) A condition of the CIA and plea agreement was an annual review of the
effectiveness of Abbottys wCompliance Programx as it relates to the
marketing, promotion, and sale of pharmaceutical products by Abbottys
Board.

(d)(3) Furthermore, Abbott was required to submit a quarterly report to the

probation officer of any wReportable Eventsx that occurred during any prior
quarters(s).

(d)(4) A wreportable eventx to be reported was not limited to Abbottys

Pharmaceutical products but was companywide and worldwide.

(d)(5) The probation terms defined wReportable Eventx as any matter that a
reasonable person would consider a probable violation of Food Drug and
Cosmetic Act FDCA 21 U.S.C. 331(a) or (c) related to the misbranding of
a pharmaceutical product within the meaning of 21 U.S.C. 352.

81. By no later than February 19, 2021, it was clear to Defendants that Abbottys

Sturgis facility was operating in an unsafe manner and in violation of numerous regulatory

requirements relative to the manufacture of infant formula and related products. It was also clear

to Defendants that these violations not only posed the threat of Abbottys rebates under the WIC

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program and regulatory enforcement and fines, but also presented grave risks to the health and

safety of the infants whose parents relied on Abbottys infant formula for their childys most

essential nutritional needs. When presented with these dire safety concerns, Defendants did

nothing to correct them.

82. The Director Defendantsy failures and omission were due in part to a lack of

execution of their duties but also due to the lack of information and control systems. The FDA

report of the whistleblower investigation noted: wThe ongoing reliance on paper records is

suggestive of inadequate corporate controls.x Id. at 28.

83. Only after infant deaths connected to Abbottys baby formula were reported to the

FDA, and after the FDA finally acted on the detailed accounts of a former Abbott employee, was

Abbott forced to recall its infant formula, cease all production at the Sturgis facility, and enter

into an onerous consent decree with the United States Department of Justice and FDA.

84. The OSHA Whistleblower Report in February 2021 was corroborated by another

similar whistleblower complaint in October 2021.

VI. MATERIALLY FALSE AND MISLEADING STATEMENTS

85. Throughout the Relevant Period, the Individual Defendants made and/or failed to

correct numerous materially false and misleading statements and/or material omissions that

concealed the wegregiously unsanitaryx conditions at the Sturgis facility, the extent to which

those issues were kept from regulators and the public, and the impact of those issues on Abbottys

business.

86. Defendants Ford, Alpern, Blunt, Austin, Gonzalez, Kumbier, McDew, Osborn,

McKinstry, Roman, Starks, Stratton and Tilton signed Abbottys materially false and misleading

Annual Report on Form 10-K for the Annual Periods ended December 31, 2020 and December

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31, 2021 (w2021 10-Kx) issued on February 18, 2022 but which failed to make any disclosure of

Abbottys problems at its Sturgis plant. Similarly, these Defendants caused Abbottys March 18,

2022 Proxy to conceal information about the problems and conditions and investigations at

Sturgis.

The 2020 10-K

87. On February 19, 2021, Abbott filed its annual report for the year ended December

31, 2020, with the SEC on Form 10-K (the w2020 Annual Reportx). The 2020 Annual Report

was signed by Defendants Ford and Funck.

88. In that Annual Report, Abbott stated that Total Nutritional Products sales (which

includes infant formula manufactured at Sturgis) increased 4.7% in 2020, and its U.S. Pediatric

Nutritional business sales (also including the formula produced at Sturgis) increased 5.8% in

2020. In the 2020 Annual Report, Abbott acknowledged:

Abbott is subject to numerous governmental regulations and it can be costly

to comply with these regulations and to develop compliant products and
processes.

Abbottys products are subject to rigorous regulation by the FDA and numerous
international, supranational, federal, and state authorities. The process of
obtaining regulatory approvals to market a drug, medical device, or diagnostic
product can be costly and time-consuming, and approvals might not be granted
for future products, or additional indications or uses of existing products, on a
timely basis, if at all. Delays in the receipt of, or failure to obtain, approvals for
future products, or new indications and uses, could result in delayed realization of
product revenues, reduction in revenues, and substantial additional costs.

In addition, no assurance can be given that Abbott will remain in compliance with
applicable FDA and other regulatory requirements once approval or marketing
authorization has been obtained for a product. These requirements include, among
other things, regulations regarding manufacturing practices, product labeling, and
advertising and post marketing reporting, including adverse event reports and
field alerts. Many of Abbottys facilities and procedures and those of Abbottys
suppliers are subject to ongoing regulation, including periodic inspection by the
FDA and other regulatory authorities. Abbott must incur expense and spend time
and effort to ensure compliance with these complex regulations. Possible

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regulatory actions for non-compliance could include warning letters, fines,

damages, injunctions, civil penalties, recalls, seizures of Abbottys products, and
criminal prosecution.

89. On April 20, 2021, the Company held its first-quarter 2021 earnings conference

call. During the call, Defendant Ford stated: wIn the US and several international markets, we

continue to capture share with our leading portfolio of infant formula and toddler brands.x

90. On July 16, 2021, Abbott issued its 2020 ESG Global Sustainability Report to

shareholders. That report stated, inter alia, that wAbbottys nutrition business ensures food safety

through a tightly controlled manufacturing process that encompasses all steps from accepting

materials from suppliers through to final product distribution. We monitor and verify

microbiology, packaging integrity, and nutrient and lot control. We complete extensive finished

product testing before releasing it for commercial distribution.x Abbottys 2020 ESG Global

Sustainability Report also touted the Companyys Code of Business Conduct and strict

compliance procedures that enabled employees to wreport any concernsx because wAbbott does

not tolerate illegal or unethical behavior in any aspect of our business and that employees are

required to ask questions and/or report any concerns.x

91. On July 22, 2021, the Company held its second-quarter 2021 earnings conference

call in which Defendants Ford and Funck participated. During the call, Ford stated: wIn Pediatric

Nutrition, sales grew nearly 4.5% in the quarter, led by growth of nearly 9% in the US, where we

continue to capture share with our leading portfolio of infant formula and toddler brands.

92. On October 20, 2021, the Company held its third-quarter 2021 earnings

conference call. During the call, Ford stated:

Iyll now summarize our third quarter results ... Iyll start with Nutrition where sales
increased 9% compared to last year. Strong growth in the quarter was led by US
Pediatric and International Adult Nutrition. In Pediatric Nutrition, sales grew over

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8.5% in the quarter, led by strong growth in the US from continued share gains in
our infant formula and toddler portfolio.

93. On January 26, 2022, the Company held its fourth-quarter and year-end 2021

earnings conference call in which Defendants Ford and Funck participated. During the call,

Defendant underscored the significance of the Companyys infant formula business:

In Pediatric Nutrition, US sales growth of more than 10% for the year was led by strong
growth of Pedialyte, our oral rehydration brand, and market share gains for Similac, our
market leading infant formula brand. During the past year, we continued to expand our
Nutrition portfolio with several new product and line extensions including the launch of
Similac 360 Total Care in the US and continued global expansion of our PediaSure,
Glucerna and Ensure brands with line extensions such as plant-based, lower sugar and high
protein products.

94. The above statements were materially false and misleading and/or omitted

information necessary to make the statements not materially false and misleading. The Individual

Defendants were aware of, but failed to disclose, the existence of manufacturing process and

contamination issues with its infant formula products which were related to infant deaths. In

addition, the violations of applicable health and safety regulations at Abbottys Sturgis facility

caused massive product recalls, exposed the Company to regulatory investigation and censure, as

well as potential class-wide liability in the Securities Action.

95. In addition, the statements in the Companyys February 17, 2022 press release

announcing the recall of Abbottys powdered infant formula, were materially false and

misleading. That press release stated that Abbott was winitiating a proactive, voluntary recall of

powder formulas, including Similac, Alimentum and EleCare manufactured in Sturgis, Mich.,

one of the companyys manufacturing facilities.x In addition, in the press release, Manning stated:

wWe know parents depend on us to provide them with the highest quality nutrition formulas.

Weyre taking this action so parents know they can trust us to meet our high standards, as well as

theirs. We deeply regret the concern and inconvenience this situation will cause parents,

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caregivers and health care professionals.x The Company failed to disclose, however, that the

recall was made at the insistence of the FDA based on information that was known to the

Individual Defendants for at least a year.

96. The February 17 press release reported that evidence of Cronobacter

contamination was found in wnonproduct contact areasx when, in fact, the FDA that the

contamination was found in areas directly contacting infant formula containers and the formula

product.

97. In May 25, 2022 testimony before the United States House of Representatives

Committee on Energy and Commerce, Subcommittee on Oversight and Investigations, regarding

the baby formula shortage, Defendant Calamari stated that Abbott was unaware of the

whistleblowerys complaints until late April 2022, when the complaint submitted to the FDA was

publicly disclosed by a member of Congress:

Abbott did not find out about it [the whistleblower complaint] until it was made
public in the end of April and it was the particular individual who raised the
complaint ... it was their choice to use that mechanism to raise the complaint.

98. This statement was materially false and misleading because, as disclosed two

weeks later, the whistleblower had filed a similar complaint with OSHA in February 2021.

Abbott not only received a copy of the complaint, but the Company filed a nonpublic response to

it in April 2021.

99. In the last quarter of 2021, Abbott repurchased an enormous quantity of its own

stock in the market (and publicly reporting same to investors as a sign of bullishness) pursuant to

a share repurchase program as follows:

100. On December 10, 2021, Abbottys board authorized the repurchase of up to $5

billion of Abbott common shares. Thereafter in January 2022, Abbott purchased 650,000 shares

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of its own stock at an average price of 127.26 per share. In February 2022, Abbott repurchased

8,500,000 shares of its own stock at an average price of $123.64 per share. In March 2022,

Abbott purchased 8,113,060 shares of its own stock at an average price of $118.34 per share.

VII. THE TRUTH IS REVEALED

101. On February 17, 2022, the FDA publicly announced that it was investigating four

consumer complaints of infant illness related to powdered infant formula manufactured by

Abbott at the Sturgis facility. The FDA stated that during its an onsite inspection of the facility, it

had found Cronobacter contamination in several environmental samples that was linked to infant

illness and death. The FDA also disclosed that Abbottys internal records indicated

wenvironmental contamination with Cronobacter and the firmys destruction of product due to the

presence of Cronobacter.x

102. On the same day, Abbott issued a recall of certain infant formula products

manufactured in Sturgis, including Similac, Alimentum, and EleCare.

103. On March 22, 2022, after the markets closed, the FDA released reports from three

inspections of the Sturgis facility conducted in September 2019, September 2021 and, most

recently, between January 31, 2022, and March 18, 2022. Among other things, the FDA

concluded that (a) Abbott failed to establish process controls wdesigned to ensure that infant

formula does not become adulterated due to the presence of microorganisms in the formula or in

the processing environmentx and (b) Abbott failed to wensure that all surfaces that contacted

infant formula were maintained to protect infant formula from being contaminated by any

source.x

104. On April 28, 2022, a redacted copy of a 34-page detailed whistleblower complaint

sent to the FDA in October 2021 was made public. The Complainant was a former employee of

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Abbott and his complaint was based on personal knowledge. The whistleblower complaint

revealed that Abbott was previously aware of the issues disclosed in February and March 2022.

In addition, the complaint alleged that Abbott management at the Sturgis facility had falsified

test records; released untested infant formula to the public; continued the use of testing

procedures known to be deficient; was unable to trace products in order to properly implement

product recalls; and attempted to mislead the FDA during a 2019 inspection audit.

105. Some of the most egregious violations, allegations, and findings in the Report

relevant hereto include, but are not limited to:

III. INADEQUATE INTERNAL CONTROLS

In countless ways, Abbott has failed to implement and actively enforce adequate
internal controls with respect to the Sturgis site. This failure does not appear to be
limited to the Sturgis site. Officials at the division level were aware of many of the
problems and failed to take corrective measures. Corporate policies and practices
were and are clearly inadequate. Indeed, there is evidence that some officials at the
division and corporate levels may also be complicit.

F. Fraud Against Shareholders.

But from the standpoint of investors, the implications of the violations are apt to be
material in ways that may not be fully appreciated at this point in time. Certainly,
the degree to which Abbott has falsely certified its compliance with the cGMPs is
apt to heighten the materiality to shareholders.

3. Inconsistent and Disparate Treatment

members of management who are intimately involved with circumventing what

exist in terms of internal controls are not subject to any discipline other than for
failures to meet their metrics. These are individuals who also repeatedly misled
officials at the division and corporate level. These are individuals who knowingly
direct and approve of actions in direct violation of FDA regulations. A culture of
compliance does not exist at the Sturgis site as mandated by the FDA and the
Department of Justiceys guidance.

D. HIGHLY QUESTIONABLE INCENTIVE STRUCTURE

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It is Complainantys understanding that management at the Sturgis site is rewarded

in terms of bonuses of some sort for meeting metrics vis-a-vis other production
sites. Productivity is tracked based upon meeting certain data points. Each site
provides the information. It was well known to the Complainant and others at the
Sturgis site that the information provided to evaluate productivity is frequently and,
at times, blatantly false.

IV. CONCLUSION

Even though Abbottys senior management is now aware of many of the alleged
regulatory violations referenced in the foregoing, no serious effort to remedy the
violations have been reported to date. Instead, the emphasis appears to be more
focused on identifying current employees at the Sturgis site who may have reported
concerns to the Complainant. Aside from the mandate of FDA regulations, Abbottys
inaction is directly at odds with the mandate of Sarbanes-Oxley mandating adequate
internal controls and the Department of Justiceys policy mandating effective
compliance programs.

Abbottys inaction is also inconsistent with the Corporate Integrity Agreement that
it entered into with the Office of Inspector General of the Department of Health and
Human Services in May of 2012 as part of a plea agreement. United States v. Abbott
Laboratories, No. 12-cr-00026 (W.D. Va., filed May 7, 2012). At the same time,
Abbott also entered into settlement agreements with various states. Though not
directly applicable to Abbott Nutrition, the core concepts apply in terms of the
ongoing obligations on the part of Abbottys management and board of directors.

Id. at 30-31.

106. On May 16, 2022, the U.S District Court for the Western District of Michigan

entered into a consent decree with Abbott.

107. Under the May 16, 2022 consent decree, Abbott agreed to take corrective actions

following an FDA inspection of its Sturgis. The consent decree obliges Abbott to take actions

that are expected to ultimately result in an increase of infant formula products, while ensuring

that the company undertakes certain actions that would ensure safe powdered infant formula is

produced at the facility. When the company decides to restart production at this facility, it must

conform with the provisions of the proposed consent decree and meet FDA food safety

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standards. If contamination is identified, the company must notify the FDA, identify the source

of the problem and conduct a root-cause investigation before resuming production.

108. This consent decree also required Abbott to retain an independent expert to

review the Sturgis facilityys operations to ensure compliance with the law, requirements for

testing products, as well as ceasing production, promptly notifying the FDA should

contamination be detected, and implementation of a sanitation plan, environmental monitoring

plan and employee training programs.

109. On June 8, 2022, it was publicly disclosed that Abbott was aware of the

whistleblowerys formal allegations no later than early 2021, when a complaint was sent to OSHA

and then forwarded to the FDA and Abbott. Investors also learned that Abbott submitted a

response to the OSHA complaint two months later.

VIII. HARM TO ABBOTT

110. As a direct and proximate result of the Individual Defendantsy misconduct, Abbott

has sustained millions of dollars in harm. Because of Abbottys violations at the Sturgis facility,

Abbott, and others, have been named as defendants in wrongful death actions resulting from

Similac contamination: Restad v. Abbott Laboratories, Inc., Case No. 1 :21-cv-00798-A WI-

SKO (E.D. Cal.); and from Alimentum contamination: Diebert v. Abbott Laboratories, Inc., Case

No. 1 :22-cv-01114-REB (D. Colo.) and the Securities Action. Abbott has had to close Sturgis

and to recall products manufactured there. Defendantsy actions also caused Abbott to waste

hundreds of millions of dollars on repurchasing its own stock through 2021 and the first quarter

of 2022.

111. In addition, the Company is not only paying the cost of defending itself in the

Securities Action and other actions, but it is exposed to massive potential liability for class-wide

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damages, especially in light of the recall. The Company has also incurred costs and expenses in

connection with the whistleblower complaint and the regulatory proceedings.

112. Abbott has also suffered and will continue to suffer a loss of reputation and

goodwill, and a wliarys discountx that will plague the Companyys stock in the future due to the

Individual Defendantsy misconduct and breach of their fiduciary duties.

IX. INSIDER SALES BY THE INSIDER SELLING DEFENDANTS

113. While the Companyys outside stockholders lost value, certain insiders did quite

well for themselves. In particular, defendants Lane, Capek, Salvadori, Watkin, Wainer, Starks,

Ahlberg, Woodgrift, Morrone, Bird, Karam, Pederson and Dale (the wInsider Selling

Defendantsx) sold approximately $130,000,000 worth of their stock collectively during the

Relevant Period when Abbottys stock price was at, or close to, its peak and with some sales

occurring just a few weeks before the truth was revealed.

114. While some stock sales may have allegedly been made pursuant to various 10b5-1

plans for the respective Insider Selling Defendants, 10b5-1 plans do not provide a defense or

immunity if the plan was adopted while the seller was in possession of material non-public

information or made the sale in bad faith as is alleged here. This is especially true here because

10b5-1 plans typically allow for an insider to sell a minimal amount of pre-determined stock

during regular intervals and here these sales appear to be one-off for tens of millions of dollars

with no other sales like it in the same time frame preceding the Relevant Period.

115. Rather than providing the market with correct information, the Insider Selling

Defendants used their knowledge of Abbottys material, nonpublic information to sell their

personal holdings while the Companyys stock was artificially inflated. The insider Selling

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Defendants were privy to material, nonpublic information about the Companyys true business

health.

A. Defendant Lane

116. While in possession of this knowledge, Defendant Lane sold 145,925 shares of his

personally held Abbott stock for proceeds of $18,355,279 as reflected in the chart below.

Trade Date Price Shares Sold Proceeds

2021-11-15 $130.01 10,000 $1,300,090
2021-08-27 $125.48 135,925 $17,055,189

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

117. Lane did not purchase any Abbott stock during the Relevant Period.

118. While these shares were purportedly sold pursuant to a 10b5-1plan, the Form 4

filed for that sale does not set forth the date of that 10b5-1plan.

B. Defendant Capek

119. While in possession of this knowledge, Defendant Capek sold 149,600 shares of

his personally held Abbott stock for proceeds of $20,203,704 as reflected in the chart below.

Trade Date Price Qty Value

2021-12-13 $135.05 149,600 $20,203,704

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

120. While these shares were purportedly sold pursuant to a 10b5-1plan, the Form 4

filed for that sale does not set forth the date of that 10b5-1plan.

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121. Capek did not purchase any Abbott stock during the Relevant Period.

C. Defendant Daniel Salvadori

122. While in possession of this knowledge, Defendant Salvadori sold 120,214 shares

of his personally held Abbott stock for proceeds of $16,471,365 as reflected in the chart below.

Trade Date Price Qty Value

2022-03-01 $118.17 1,550 $183,165
2021-12-23 $140.00 58,501 $8,190,140
2021-12-13 $135.00 58,499 $7,897,365
2021-03-01 $120.61 1,664 $200,695

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

123. While these shares were purportedly sold pursuant to a 10b5-1plan, the Form 4

filed for that sale does not set forth the date of that 10b5-1plan.

124. Salvadori did not purchase any Abbott stock during the Relevant Period.

D. Defendant Watkin

125. While in possession of this knowledge, Defendant Watkin sold 97,005 shares of

his personally held Abbott stock for proceeds of $11,507,499 as reflected in the chart below.

Trade Date Price Qty Value

2022-03-01 $118.10 -1,038 $122,589
2021-04-30 $119.90 -94,576 $11,339,739
2021-03-01 $120.61 -1,391 $167,769

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

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126. Per the Form 4 filed with the SEC in connection with the April 30, 2021 sale for

$11,339,739 worth of Abbott stock, this stock sale was not made pursuant to a previously

adopted 10b5-1plan.

127. Watkin did not purchase any Abbott stock during the Relevant Period.

E. Defendant Wainer

128. While in possession of this knowledge, Defendant Wainer sold 86,243 shares of

her personally held Abbott stock for proceeds of $11,361,423 as reflected in the chart below.

Trade Date Price Qty Owned ÅJof Value

2022-03-01 $118.13 -456 62,172 -1% -$53,866
2021-12-23 $140.47 -16,000 49,782 -24% -$2,247,500
2021-12-17 $137.54 -7,500 49,782 -13% -$1,031,550
2021-12-13 $135.00 -14,500 49,782 -23% -$1,957,500
2021-12-06 $132.50 -4,500 49,782 -8% -$596,250
2021-11-15 $130.01 -12,500 49,782 -20% -$1,625,111
2021-09-02 $127.50 -9,500 49,782 -16% -$1,211,250
2021-08-17 $125.00 -14,500 49,782 -23% -$1,812,500
2021-03-03 $121.79 -6,200 51,550 -11% -$755,098
2021-03-01 $120.61 -587 57,750 -1% -$70,798

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

129. Wainer did not purchase any Abbott stock during the Relevant Period.

F. Defendant Starks

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130. While in possession of this knowledge, Defendant Starks sold 50,000 shares of his

personally held Abbott stock for proceeds of $5,661,048 as reflected in the chart below.

Trade Date Price Qty Value

2022-05-03 $113.22 50,000 $5,661,048

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

131. Starks did not purchase any Abbott stock during the Relevant Period.

G. Defendant Ahlberg

132. While in possession of this knowledge, Defendant Ahlberg sold 27,624 shares of

his personally held Abbott stock for proceeds of $3,568,219 as reflected in the chart below.

Trade Date Price Qty Owned ÅJof Value

2022-03-01 $118.15 -1,099 44,099 -2% -$129,847
2021-11-15 $130.00 -25,473 36,033 -41% -$3,311,490
2021-03-01 $120.61 -1,052 24,712 -4% -$126,882

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

133. Ahlberg did not purchase any Abbott stock during the Relevant Period.

H. Defendant Woodgrift

134. While in possession of this knowledge, Defendant Woodgrift sold 32,348 shares

of his personally held Abbott stock for proceeds of $3,769,819 as reflected in the chart below.

Trade Date Price Qty Owned ÅJof Value

2022-05-04 $113.00 -24,000 51,177 -32% -$2,712,103

35
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Trade Date Price Qty Owned ÅJof Value

2022-03-01 $118.10 -964 52,498 -2% -$113,849
2021-09-03 $129.00 -6,350 46,960 -12% -$819,150
2021-03-01 $120.61 -1,034 53,548 -2% -$124,711

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

135. Woodgrift did not purchase any Abbott stock during the Relevant Period.

I. Defendant Morrone

136. While in possession of this knowledge, Defendant Morrone sold 30,621 shares of

his personally held Abbott stock for proceeds of $4,098,339 as reflected in the chart below.

Trade Date Price Qty Value

2022-03-01 $118.16 656 $77,513
2021-12-17 $137.54 9,988 $1,373,750
2021-12-06 $132.51 19,977 $2,647,076

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

137. Morrone did not purchase any Abbott stock during the Relevant Period.

J. Defendant Bird

138. While in possession of this knowledge, Defendant Bird sold 10,552 shares of his

personally held Abbott stock for proceeds of $1,151,558 as reflected in the chart below.

Trade Date Price Qty Value

2021-04-27 $122.00 9,439 $1,151,558

36
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Trade Date Price Qty Value

2021-03-01 $120.61 1,113 $134,23

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

139. Bird did not purchase any Abbott stock during the Relevant Period.

K. Defendant Karam

140. While in possession of this knowledge, Defendant Karam sold 28,700 shares of

his personally held Abbott stock for proceeds of $3,687,223 as reflected in the chart below.

Trade Date Price Qty Value

2021-12-23 $140.01 4,700 $658,023
2021-08-17 $125.00 8,000 $1,000,000
2021-08-03 $122.50 8,000 $980,000
2021-04-27 $122.00 8,600 $1,049,200

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

141. Karam did not purchase any Abbott stock during the Relevant Period.

L. Defendant Pederson

142. While in possession of this knowledge, Defendant Pederson sold 23,008 shares of

his personally held Abbott stock for proceeds of $2,969,173 as reflected in the chart below.

Trade Date Price Qty Value

2021-09-08 $129.05 23,008 $2,969,173

37
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His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

143. Peterson did not purchase any Abbott stock during the Relevant Period.

M. Defendant Dale

144. While in possession of this knowledge, Defendant Karam sold 24,128 shares of

his personally held Abbott stock for proceeds of $2,888,195 as reflected in the chart below.

Trade Date Price Qty Value

2022-03-08 $117.00 4,000 $468,001
2022-03-01 $118.15 1,053 $124,412
2021-07-28 $120.33 17,600 $2,117,882
2021-03-01 $120.61 1,475 $177,900
His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

145. Dale did not purchase any Abbott stock during the Relevant Period.

N. Defendant Boudreau

146. While in possession of this knowledge, Defendant Boudreau sold 8,000 shares of

his personally held Abbott stock for proceeds of $1,011,920 as reflected in the chart below.

Trade Date Price Qty Owned ÅJof Value

2021-10-25 $126.49 -8,000 17,214 -32% $1,011,920

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

38
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147. Boudreau did not purchase any Abbott stock during the Relevant Period.

O. Defendant Allen

148. While in possession of this knowledge, Defendant Allen sold 204,843 shares of

his personally held Abbott stock for proceeds of $25,284,600 as reflected in the chart below.

Trade Date Price Qty Owned ÅJof Value

2022-03-01 $118.17 -1,450 167,095 -1% $171,348
2021-02-01 $123.47 -203,393 151,896 -57% $25,113,252

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

149. Allen did not purchase any Abbott stock during the relevant period.

P. Defendant Scoggins

150. While in possession of this knowledge, Defendant Scoggins sold 45,000 shares of

his personally held Abbott stock for proceeds of $5,545,800 as reflected in the chart below.

Trade Date Price Qty Owned ÅJof Value

2021-02-01 $123.24 -45,000 39,706 -53% $5,545,800

His insider sales, made with knowledge of material nonpublic information, before the material

misstatements and omissions were exposed, demonstrate his motive in facilitating and

participating in the scheme.

151. Scoggins did not purchase any Abbott stock during the relevant period.

39
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X. DERIVATIVE AND DEMAND FUTILITY ALLEGATIONS

152. Plaintiff brings this action derivatively in the right and for the benefit of the

Company to redress injuries suffered and to be suffered as a direct and proximate result of the

breaches of fiduciary duties by the Individual Defendants.

153. Abbott is named solely as a nominal party in this action. This is not a collusive

action to confer jurisdiction on this Court that it would otherwise not have.

154. Plaintiff is a current shareholder of Abbott and was a continuous shareholder of

the Company during the period of the Individual Defendantsy wrongdoing alleged herein.

Plaintiff will adequately and fairly represent the interests of the Company in enforcing and

prosecuting its rights and retained counsel competent and experienced in derivative litigation.

155. Under the circumstances described herein, demand is excused as futile under 805

Ill. Comp. Stat. 5/780.

156. Seven of Abbottys 13 current directors were on Abbottys board during the five

year CIA probation period and were thus aware of the need to maintain and cultivate effective

reporting to the Board and yet failed to do so.

157. In spite of Abbottys stated commitment to safety, and notwithstanding that serious

injury or death could resultvand had resultedvthe Board completely abdicated its duty to

oversee the safety of those products and the members of its community.

158. Abbott is required to comply with regulations and establish controls to monitor

and manage sanitation, health hazards and contamination. Abbott, however, did not implement or

prioritize sanitation, health hazards and contamination at the requisite level of the corporate

pyramid.

40
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159. The Board utterly failed to implement any reporting, internal controls, or

information systems regarding sanitation, health hazards and contamination.

160. A pre-suit demand on the Board of Abbott is futile and, therefore, excused.

During the illegal and wrongful course of conduct at the Company, all of which is independently

verified and documented in the whistleblower complaint, and to the present, the Board consisted

of Defendants Ford, Alpern, Blount, Gonzalez, Kumbier, McDew, McKinstry, Osborn, Roman,

Starks, Stratton, and Tilton.

161. Defendants Ford, Alpern, Blount, Gonzalez, Kumbier, McDew, McKinstry,

Osborn, Roman, Starks, Stratton, and Tilton were also on the board at the time of the CIA.

162. Given the factual allegations set forth herein, Plaintiff has not made a demand on

the Board to bring this action against the Individual Defendants. A pre-suit demand on the Board

would be futile as there is reason to doubt that a majority of the members of the Board are

incapable of making an independent and/or disinterested decision to initiate and vigorously

pursue this action given the significant problem of Director Defendantsy own individual

unexculpated personal liability to Abbott.

163. The Individual Defendants either knew or should have known that of the health

and safety issues at the Sturgis facility, the danger posed by the contaminated infant formula, and

the false and misleading statements were material, paramount to the Companyys stock price and

issued on the Companyys behalf and took no steps in a good faith effort to prevent or remedy that

situation.

164. Each of the Individual Defendants approved and/or permitted the wrongs alleged

herein to have occurred and participated in efforts to conceal or disguise those wrongs from the

41
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Companyys stockholders or recklessly and/or with gross negligence disregarded the wrongs

complained of herein and are therefore not disinterested parties.

COUNT I

AGAINST DIRECTOR DEFENDANTS FOR CONTRIBUTION

UNDER 15 U.S.C. § 77 K(F) AND 21D(5)(A)-(D)
FOR VIOLATIONS OF SECTIONS 10(B) AND 21D OF THE EXCHANGE ACT

165. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

166. Plaintiff asserts this Count against the Director Defendants (the wContribution

Defendantsx) who are or will be named in the future as defendants in related securities class

actions. The conduct of these Defendants, as described herein, has exposed the Company to

significant liability under various federal securities laws by their disloyal acts.

167. The Company is named as a Defendant in related securities class actions that

allege acts and conduct which constitute violations of Section 10b5 of the Securities Exchange

Act and Section 10(b) of the Exchange Act. The Company is alleged to be liable to private

persons, entities, and/or classes by virtue of many of the same facts alleged herein. These suits

have caused the Company to incur substantial costs for defense and settlement. If the Company

is found liable for violating the federal securities laws, the Companyys liability will arise in

whole or in part from the intentional, knowing, or reckless acts or omission of all or some of the

Defendants as alleged herein, who have caused the Company to suffer substantial harm through

their disloyal acts. The Company is entitled to contribution and indemnification from the

Defendants in connection with all claims that have been, are, or may be asserted against the

Company by virtue of their wrongdoing.

168. As directors, Defendants had the power to ability to, and did, control over

influence, either directly or indirectly, the Companyys general affairs, including the content of its

42
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public statements, and has the power or ability to directly or indirectly control or influence the

specific corporate statements and conduct that violated Section 10(b) of the Exchange Act and

SEC Rule 10b-5.

169. The Defendants are liable under Section 77K(f) of the Securities Act and/or

section 21D of the Exchange Act, which provides for claims of contributions from the same

Defendants named herein.

170. The Defendants have damaged the Company and are liable to the Company for

contribution and/or indemnification. No adequate remedy at law exists for Plaintiff.

COUNT II

DERIVATIVELY ON BEHALF OF ABBOTT AGAINST THE

THE INSIDER SELLING DEFENDANTS FOR BREACH OF FIDUCIARY DUTY

171. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

172. By virtue of their positions as officers or directors, the insider selling defendants

owned fiduciary duties of loyalty and good faith to the company.

173. At the time the insider selling defendants initiated their sales of Abbott stock, they

knew the Sturgis facility had substantial defects, violations, and would close or was at risk of

being closed. The insider selling defendants knew these conditions, and the likelihood of having

to shutter the Sturgis facility, thereby severely undercutting potential revenue, were in direct

conflict with the bullishness expressed to the market weeks and months earlier.

174. The insider selling defendants also knew that this was information that the market

would consider material and that the announcement of the contaminated formula was virtually

certain to harm the Companyys stock price. Despite being in possession of this material

43
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nonpublic information, the insider selling defendants sold substantial Abbott stock during the

Relevant Period, in violation of their fiduciary duties.

175. By disposing of their stock while in possession of adverse, material nonpublic

information, the insider selling defendants exploited their position at Abbott, and breached their

fiduciary duties to Abbott. Because the insider selling defendants sold their stock before the

non-public information in their possession could be fully disclosed to the public and harm the

Companyys stock price, the insider selling defendants improperly benefited from this breach of

fiduciary duty.

176. Plaintiff, on behalf of Abbott, has no adequate remedy at law.

COUNT III

AGAINST THE DIRECTOR DEFENDANTS FOR BREACH OF FIDUCIARY DUTY

177. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

178. The Individual Defendants owed and owe Abbott fiduciary obligations. By

reason of their fiduciary relationships, the Individual Defendants owed and owe Abbott the

highest obligation of loyalty and good faith.

179. The Individual Defendants engaged in a sustained and systematic failure to

properly exercise their fiduciary duties. Among other things, the Individual Defendant breached

their fiduciary duties of loyalty and good faith by failing to adequately remediate the

contamination issues at the Companyys Sturgis facility; failing to maintain internal controls

adequate to enable Abbott to identify and effectively recall contaminated products; permitting

the use of inadequate practices and procedures to guide the truthful dissemination of Company

news to the investing public and to the Companyys shareholders; allowing or permitting false and

misleading statements to be disseminated in the Companyys SEC filings and other disclosures;

44
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and, otherwise failing to ensure that adequate internal controls were in place regarding the

serious business reporting issues and deficiencies described above. These actions could not have

been a good faith exercise of prudent business judgment to protect and promote the Companyys

corporate interests.

180. The Individual Defendants violated and breached their fiduciary duties by

engaging in the acts and omissions herein as well as by trading on material adverse non-public

information for the purpose of garnering profits and avoiding losses or failing to take action

against those who traded on material adverse non-public information.

181. As a direct and proximate result of the Individual Defendantsy breaches of their

fiduciary obligations, Abbott has sustained significant damages, as alleged herein. As a result of

the misconduct alleged herein, these defendants are liable to the Company.

182. Plaintiff, on behalf of Abbott, has no adequate remedy at law.

COUNT IV

AGAINST THE INDIVIDUAL DEFENDANTS FOR VIOLATIONS OF § 10(B)

OF THE EXCHANGE ACT, 15 U.S.C. § 78(J), AND RULE 10B-5, 17 C.F.R. §240.L0B-5

183. Plaintiff incorporates by reference and realleges each and every allegation

contained above, as though fully set forth herein.

184. The Individual Defendants violated § 10(b) of the Exchange Act, 15 U.S.C. §

78j(b), and Rule 10b-5 promulgated thereunder by the SEC.

185. The Individual Defendants, individually and in concert, directly or indirectly,

disseminated or approved the materially false statements specified above, which they knew or

deliberately disregarded were misleading in that they contained misrepresentations and failed to

disclose material facts necessary in order to make the statements made, in light of the

circumstances under which they were made, not misleading

45
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186. The Individual Defendants violated § 10(b) of the Exchange Act and Rule 10b-5

in that they: (i) employed devices, schemes and artifices to defraud; (ii) made untrue statements

of material facts or omitted to state material facts necessary in order to make the statements

made, in light of the circumstances under which they were made, not misleading; or (iii) engaged

in acts practices and a course of business that operated as a fraud or deceit upon Plaintiff in

connection with their purchases of Abbott common stock.

187. The Individual Defendants acted with scienter because they (a) knew that the

public documents and statements issued or disseminated in the name of Abbott were materially

false and misleading; (b) knew that such statements or documents would be issued or

disseminated to the investing public; and (c) knowingly and substantially participated, or

acquiesced in the issuance or dissemination of such statements or documents as primary

violations of the securities laws.

188. The Individual Defendants, by virtue of their receipt of information reflecting the

true facts of Abbott, their control over, and/or receipt and/or modification of Abbottys allegedly

materially misleading statements, and/or their associations with the Company which made them

privy to confidential proprietary information concerning Abbott, participated in the fraudulent

scheme alleged herein.

189. As a result of the foregoing, the market price of Abbott common stock was

artificially inflated during the Relevant Period. In ignorance of the falsity of the statements,

stockholders, including Plaintiff, relied on the statements described above and/or the integrity of

the market price of Abbott common stock in purchasing Abbott common stock at prices that

were artificially inflated as a result of these false and misleading statements and were damaged

thereby.

46
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190. In addition, as a result of the wrongful conduct alleged herein, the Company has

suffered significant damages, including the costs and expenses incurred in defending itself in the

Securities Action and reputational harm. The Individual Defendants, through their violation of §

10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule l0b-5, have exposed the Company to

millions of dollars in potential class-wide damages in the Securities Class Action.

PRAYER FOR RELIEF

WHEREFORE, Plaintiff demands judgment in the Companyys favor against all

Individual Defendants as follows:

A. Declaring that Plaintiff may maintain this action on behalf of Abbott, and that

Plaintiff is an adequate representative of the Company;

B. Declaring that the Individual Defendants have breached and/or aided and abetted

the breach of their fiduciary duties to Abbott;

C. Determining and awarding to Abbott the damages sustained by it as a result of the

violations set forth above from each of the Individual Defendants, jointly and severally, together

with pre-judgment and post-judgment interest thereon;

D. Directing Abbott and the Individual Defendants to take all necessary actions to

reform and improve its corporate governance and internal procedures to comply with applicable

laws and to protect and its shareholders from a repeat of the damaging events described herein,

including, but not limited to, putting forward for shareholder vote the following resolutions for

amendments to the Companyys Bylaws or Certificate of Incorporation and the following actions

as may be necessary to ensure proper corporate governance policies:

47
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1. a proposal to strengthen the Boardys supervision of operations and develop and

implement procedures for greater shareholder input into the policies and

guidelines of the Board;

2. a provision to permit the shareholders of Abbott to nominate at least two

candidates for election to the Board; and

3. a proposal to update the board election process;

4. a proposal to ensure the establishment of effective oversight of compliance with

applicable laws, rules, and regulations.

JURY DEMAND

Plaintiff demands a trial by jury.

Dated: January 18, 2023 /s/ Edward A. Wallace

Edward A. Wallace
Mark R. Miller
WALLACE MILLER
150 N. Wacker Drive, Suite 1100
Chicago, IL 60606
T. (312) 261-6193
E. [email protected]
[email protected]

Liaison Counsel for Plaintiff

Lee Squitieri
SQUITIERI & FEARON, LLP
305 Broadway, 7th Floor
New York, New York 10007
(212) 421-6492

Fletcher Moore
Justin Kuehn
MOORE KUEHN, PLLC
30 Wall Street, 8th Floor
New York, New York 10005
(212) 709-8245

Counsel for Plaintiff

48
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VERIFICATION

I, Larry Huetteman, am a plaintiff in the within action. I hereby verify that I am, and at all
relevant times relevant hereto, have been a stockholder of Abbott Laboratories. I have reviewed
the annexed Verified Shareholder Derivative Complaint, know the contents thereof, and I have
authorized counsel to file it on my behalf. To those allegations of which I do not have personal
knowledge, I rely upon my counsel and their investigation and believe them to be true.

I declare under penalty of perjury that the foregoing is true and correct. Executed on this 17
__
day of January 2023.

Larry Huetteman (Jan 17, 2023 15:08 CST)

Larry Huetteman
Case: 1:23-cv-00296 Document #: 1-1 Filed: 01/18/23 Page 2 of 2 PageID #:50
JS 44 (Rev. 04/21) Case: 1:23-cv-00296 Document
CIVIL #: 1-2 Filed:
COVER 01/18/23 Page 1 of 2 PageID #:51
SHEET
The JS 44 civil cover sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law, except as
provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is required for the use of the Clerk of Court for the
purpose of initiating the civil docket sheet. (SEE INSTRUCTIONS ON NEXT PAGE OF THIS FORM.)
I. (a) PLAINTIFFS DEFENDANTS
Larry Huetteman, derivatively, on behalf of Abbott ROBERT B. FORD, ROBERT E. FUNCK, JR., JOSEPH
Laboratories Inc. MANNING, ROBERT J. ALPERN, M.D., ROXANNE S.
(b) County of Residence of First Listed Plaintiff Cook, IL AUSTIN, SALLYof E.
County of Residence BLOUNT,
First PH.D.,Lake,
Listed Defendant PAOLAIL GONZALEZ,
(EXCEPT IN U.S. PLAINTIFF CASES) (IN U.S. PLAINTIFF CASES ONLY)
NOTE: IN LAND CONDEMNATION CASES, USE THE LOCATION OF
THE TRACT OF LAND INVOLVED.

(c) Attorneys (Firm Name, Address, and Telephone Number) Attorneys (If Known)
Edward A. Wallace, Wallace Miller, 150 N. Wacker Drive,
Suite 1100, Chicago, IL 60606. T. 312-261-6193
II. BASIS OF JURISDICTION (Place an “X” in One Box Only) III. CITIZENSHIP OF PRINCIPAL PARTIES (Place an “X” in One Box for Plaintiff
(For Diversity Cases Only) and One Box for Defendant)
1 U.S. Government 3 Federal Question PTF DEF PTF DEF
Plaintiff (U.S. Government Not a Party) Citizen of This State 1 1 Incorporated or Principal Place 4 4
of Business In This State

2 U.S. Government 4 Diversity Citizen of Another State 2 2 Incorporated and Principal Place 5 5
Defendant (Indicate Citizenship of Parties in Item III) of Business In Another State

Citizen or Subject of a 3 3 Foreign Nation 6 6

Foreign Country
IV. NATURE OF SUIT (Place an “X” in One Box Only) Click here for: Nature of Suit Code Descriptions.
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110 Insurance PERSONAL INJURY PERSONAL INJURY 625 Drug Related Seizure 422 Appeal 28 USC 158 375 False Claims Act
120 Marine 310 Airplane 365 Personal Injury - of Property 21 USC 881 423 Withdrawal 376 Qui Tam (31 USC
130 Miller Act 315 Airplane Product Product Liability 690 Other 28 USC 157 3729(a))
140 Negotiable Instrument Liability 367 Health Care/ INTELLECTUAL 400 State Reapportionment
150 Recovery of Overpayment 320 Assault, Libel & Pharmaceutical PROPERTY RIGHTS 410 Antitrust
& Enforcement of Judgment Slander Personal Injury 820 Copyrights 430 Banks and Banking
151 Medicare Act 330 Federal Employers’ Product Liability 830 Patent 450 Commerce
152 Recovery of Defaulted Liability 368 Asbestos Personal 835 Patent - Abbreviated 460 Deportation
Student Loans 340 Marine Injury Product New Drug Application 470 Racketeer Influenced and
(Excludes Veterans) 345 Marine Product Liability 840 Trademark Corrupt Organizations
153 Recovery of Overpayment Liability PERSONAL PROPERTY LABOR 880 Defend Trade Secrets 480 Consumer Credit
of Veteran’s Benefits 350 Motor Vehicle 370 Other Fraud 710 Fair Labor Standards Act of 2016 (15 USC 1681 or 1692)
160 Stockholders’ Suits 355 Motor Vehicle 371 Truth in Lending Act 485 Telephone Consumer
190 Other Contract Product Liability 380 Other Personal 720 Labor/Management SOCIAL SECURITY Protection Act
195 Contract Product Liability 360 Other Personal Property Damage Relations 861 HIA (1395ff) 490 Cable/Sat TV
196 Franchise Injury 385 Property Damage 740 Railway Labor Act 862 Black Lung (923) 850 Securities/Commodities/
362 Personal Injury - Product Liability 751 Family and Medical 863 DIWC/DIWW (405(g)) Exchange
Medical Malpractice Leave Act 864 SSID Title XVI 890 Other Statutory Actions
REAL PROPERTY CIVIL RIGHTS PRISONER PETITIONS 790 Other Labor Litigation 865 RSI (405(g)) 891 Agricultural Acts
210 Land Condemnation 440 Other Civil Rights Habeas Corpus: 791 Employee Retirement 893 Environmental Matters
220 Foreclosure 441 Voting 463 Alien Detainee Income Security Act FEDERAL TAX SUITS 895 Freedom of Information
230 Rent Lease & Ejectment 442 Employment 510 Motions to Vacate 870 Taxes (U.S. Plaintiff Act
240 Torts to Land 443 Housing/ Sentence or Defendant) 896 Arbitration
245 Tort Product Liability Accommodations 530 General 871 IRS—Third Party 899 Administrative Procedure
290 All Other Real Property 445 Amer. w/Disabilities - 535 Death Penalty IMMIGRATION 26 USC 7609 Act/Review or Appeal of
Employment Other: 462 Naturalization Application Agency Decision
446 Amer. w/Disabilities - 540 Mandamus & Other 465 Other Immigration 950 Constitutionality of
Other 550 Civil Rights Actions State Statutes
448 Education 555 Prison Condition
560 Civil Detainee -
Conditions of
Confinement
V. ORIGIN (Place an “X” in One Box Only)
1 Original 2 Removed from 3 Remanded from 4 Reinstated or 5 Transferred from 6 Multidistrict 8 Multidistrict
Proceeding State Court Appellate Court Reopened Another District Litigation - Litigation -
(specify) Transfer Direct File
Cite the U.S. Civil Statute under which you are filing (Do not cite jurisdictional statutes unless diversity):
15 U.S.C. §78(i)
VI. CAUSE OF ACTION Brief description of cause:
Manipulation of security prices
VII. REQUESTED IN CHECK IF THIS IS A CLASS ACTION DEMAND $ CHECK YES only if demanded in complaint:
COMPLAINT: UNDER RULE 23, F.R.Cv.P. JURY DEMAND: Yes No
VIII. RELATED CASE(S)
(See instructions):
IF ANY JUDGE Hon. Manish S. Shah & Hon. Steven C. Seeger DOCKET NUMBER 1:22-cv-05513, 1:22-cv-4661
DATE SIGNATURE OF ATTORNEY OF RECORD
1/18/2023 /s/ Edward A. Wallace
FOR OFFICE USE ONLY

RECEIPT # AMOUNT APPLYING IFP JUDGE MAG. JUDGE

 Case: 1:23-cv-00296 Document #: 1-2 Filed: 01/18/23 Page 2 of 2 PageID #:52
JS 44 Reverse (Rev. 04/21)

INSTRUCTIONS FOR ATTORNEYS COMPLETING CIVIL COVER SHEET FORM JS 44

Authority For Civil Cover Sheet

The JS 44 civil cover sheet and the information contained herein neither replaces nor supplements the filings and service of pleading or other papers as
required by law, except as provided by local rules of court. This form, approved by the Judicial Conference of the United States in September 1974, is
required for the use of the Clerk of Court for the purpose of initiating the civil docket sheet. Consequently, a civil cover sheet is submitted to the Clerk of
Court for each civil complaint filed. The attorney filing a case should complete the form as follows:

I.(a) Plaintiffs-Defendants. Enter names (last, first, middle initial) of plaintiff and defendant. If the plaintiff or defendant is a government agency, use
only the full name or standard abbreviations. If the plaintiff or defendant is an official within a government agency, identify first the agency and then
the official, giving both name and title.
(b) County of Residence. For each civil case filed, except U.S. plaintiff cases, enter the name of the county where the first listed plaintiff resides at the
time of filing. In U.S. plaintiff cases, enter the name of the county in which the first listed defendant resides at the time of filing. (NOTE: In land
condemnation cases, the county of residence of the "defendant" is the location of the tract of land involved.)
(c) Attorneys. Enter the firm name, address, telephone number, and attorney of record. If there are several attorneys, list them on an attachment, noting
in this section "(see attachment)".

II. Jurisdiction. The basis of jurisdiction is set forth under Rule 8(a), F.R.Cv.P., which requires that jurisdictions be shown in pleadings. Place an "X"
in one of the boxes. If there is more than one basis of jurisdiction, precedence is given in the order shown below.
United States plaintiff. (1) Jurisdiction based on 28 U.S.C. 1345 and 1348. Suits by agencies and officers of the United States are included here.
United States defendant. (2) When the plaintiff is suing the United States, its officers or agencies, place an "X" in this box.
Federal question. (3) This refers to suits under 28 U.S.C. 1331, where jurisdiction arises under the Constitution of the United States, an amendment
to the Constitution, an act of Congress or a treaty of the United States. In cases where the U.S. is a party, the U.S. plaintiff or defendant code takes
precedence, and box 1 or 2 should be marked.
Diversity of citizenship. (4) This refers to suits under 28 U.S.C. 1332, where parties are citizens of different states. When Box 4 is checked, the
citizenship of the different parties must be checked. (See Section III below; NOTE: federal question actions take precedence over diversity
cases.)

III. Residence (citizenship) of Principal Parties. This section of the JS 44 is to be completed if diversity of citizenship was indicated above. Mark this
section for each principal party.

IV. Nature of Suit. Place an "X" in the appropriate box. If there are multiple nature of suit codes associated with the case, pick the nature of suit code
that is most applicable. Click here for: Nature of Suit Code Descriptions.

V. Origin. Place an "X" in one of the seven boxes.

Original Proceedings. (1) Cases which originate in the United States district courts.
Removed from State Court. (2) Proceedings initiated in state courts may be removed to the district courts under Title 28 U.S.C., Section 1441.
Remanded from Appellate Court. (3) Check this box for cases remanded to the district court for further action. Use the date of remand as the filing
date.
Reinstated or Reopened. (4) Check this box for cases reinstated or reopened in the district court. Use the reopening date as the filing date.
Transferred from Another District. (5) For cases transferred under Title 28 U.S.C. Section 1404(a). Do not use this for within district transfers or
multidistrict litigation transfers.
Multidistrict Litigation – Transfer. (6) Check this box when a multidistrict case is transferred into the district under authority of Title 28 U.S.C.
Section 1407.
Multidistrict Litigation – Direct File. (8) Check this box when a multidistrict case is filed in the same district as the Master MDL docket.
PLEASE NOTE THAT THERE IS NOT AN ORIGIN CODE 7. Origin Code 7 was used for historical records and is no longer relevant due to
changes in statute.

VI. Cause of Action. Report the civil statute directly related to the cause of action and give a brief description of the cause. Do not cite jurisdictional
statutes unless diversity. Example: U.S. Civil Statute: 47 USC 553 Brief Description: Unauthorized reception of cable service.

VII. Requested in Complaint. Class Action. Place an "X" in this box if you are filing a class action under Rule 23, F.R.Cv.P.
Demand. In this space enter the actual dollar amount being demanded or indicate other demand, such as a preliminary injunction.
Jury Demand. Check the appropriate box to indicate whether or not a jury is being demanded.

VIII. Related Cases. This section of the JS 44 is used to reference related pending cases, if any. If there are related pending cases, insert the docket
numbers and the corresponding judge names for such cases.

Date and Attorney Signature. Date and sign the civil cover sheet.