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Taser safety claims draw state scrutiny
by taser
Sunday, Jan. 09, 2005 at 7:48 AM
Taser safety claims draw state scrutiny
Taser safety claims draw state scrutiny
Robert Anglen and Dawn Gilbertson
The Arizona Republic
Jan. 7, 2005 08:37 PM
On the same day news of a federal inquiry sent Taser International stock into a sharp decline, the Arizona Attorney General's Office said it is looking into claims made by the electric stun gun company.
A spokesman for Attorney General Terry Goddard said Friday that his office shares the same concerns as the U.S. Securities and Exchange Commission about the Scottsdale company's statements regarding the safety of its stun gun.
Goddard met with Taser officials at his office this week before the company disclosed that the SEC had launched an informal inquiry.
"The attorney general has concerns about issues raised in media reports about Taser International, including questions about safety and alleged misrepresentation," Goddard spokesman Steve Wilson said. "The Attorney General's Office has not opened an investigation but is continuing to gather information."
The Attorney General's Office handles cases involving consumer complaints and has overlapping jurisdiction with the Arizona Corporation Commission involving cases of securities regulation.
In an e-mail Friday, Taser spokesman Steve Tuttle said the company is "referring all calls concerning our meeting with the Arizona Attorney General's Office directly to the office."
The SEC is investigating Taser's safety claims and the validity of an end-of-year sale to a Prescott firearms company that appears to have helped the company meet its annual sales projections.
The two inquiries and recent media scrutiny come as the company is enjoying a remarkable ride for a family business that went from the brink of bankruptcy to the nation's largest supplier of stun guns. It has armed nearly one-fifth of America's law enforcement agencies with Tasers and has made millions for investors over the past three years.
Police departments across the country credit the stun gun with reducing police shootings, lowering the number of suspect injuries and lawsuits.
Despite the company's claims that its guns have never caused a death or serious injury, an investigation by The Arizona Republic has linked the stun gun to 11 deaths and to several injuries involving police officers.
Word of the SEC's informal inquiry affected Taser stock Friday. The shares, which had zoomed to more than $30 from 34 cents in the past two years, fell nearly 18 percent in heavy trading on the Nasdaq Stock Market.
The stock closed at $22.72, down $4.90. It was as low as $21.29 at one point in the day. Combined with declines earlier in the week, Taser is down 28 percent since Monday.
An informal inquiry of a company is regulatory speak for a review by the SEC's enforcement division of potentially troublesome issues brought to its attention by investors who lost money, whistle-blowers, media reports and a host of other sources.
The staff is basically gathering information during the process. If people it needs to talk to are not forthcoming, it can ask the SEC commissioners for a formal investigation, which gives the staff subpoena power.
The end goal: deciding whether it needs to take legal action for violations of securities laws.
Brian Ruttenbur, who follows Taser for brokerage Morgan Keegan & Co., said in a report Friday that it is concerned about the SEC inquiry. But he kept his "hold" rating on the stock, meaning shareholders should not sell or buy Taser stock.
Taser built its success on selling to police departments.
More than 5,500 law enforcement agencies have armed their officers with Tasers.
The stun guns have been credited with reducing police shootings in cities across the country.
Police departments from Washington to Florida have reported dramatic drops in shootings since issuing Tasers to officers.
In 2003, for the first time in more than a decade, Seattle and Miami did not have a single fatal police shooting. In Phoenix, the officer-involved shooting rate in 2002 was 2 1/2 times the rate in Los Angeles. Phoenix police shot 28 people; 13 died. In 2003, the year Tasers were issued to all patrol officers, police shootings dropped 54 percent to 13, the lowest number since 1990.
Amnesty International has asked police departments across the country to stop using the gun until more independent medical studies are conducted. Amnesty spokesman Ed Jackson said Friday that the SEC inquiry underscores his agency's concerns.
"It has been a long time coming," Jackson said. "There have been questions raised consistently by Amnesty about the safety of (Taser's) guns."
Since the summer, reports in The Republic and the New York Times have brought to light contradictions about Taser's claims of safety.
For years, Taser maintained that its stun guns never caused a death or serious injury. As proof, Taser officials said no medical examiner had ever cited the weapon in an autopsy report.
But Taser did not have those autopsy reports and didn't start collecting them until April. Using computer searches, autopsy reports, police reports, media reports and Taser's own records, The Republic has identified 88 deaths after police Taser strikes in the United States and Canada since 1999.
Of those, 11 autopsy reports have linked deaths to the stun gun. Medical examiners cited Taser as a cause or contributing factor in eight deaths and could not rule it out as a cause in three others.
The Republic has also reported that several police officers have sustained career-ending injuries that they attribute to being shocked with Taser. In reports to bolster safety claims, Taser officials have said more than 100,000 police officers have been shocked during training exercises without suffering a serious injury.
In October, Taser issued a press release saying a Department of Defense study, whose full results have not yet been released, found that its guns were safe. But The Times reported that the Air Force researchers who conducted the study actually found that the guns could be dangerous and that more data was needed to evaluate their risks.