An investigation on behalf of investors in Johnson & Johnson (NYSE:JNJ) securities over possible violations of Federal Securities Laws by Johnson & Johnson was announced.

Johnson & Johnson, located in New Brunswick, New Jersey, is engaged in the research and development, manufacture and sale of a range of products in the health care field. Johnson & Johnson reported in 2007 Total Revenue of $61.095billion, in 2008 $63.747billion, and in 2009 $61.897billion.

According to the investigation by a law firm the investigation on behalf of investors in Johnson & Johnson (NYSE:JNJ) securities focuses on the following events. On May 27, 2010, it was reported that the Food and Drug Administration (FDA) is considering civil or criminal charges against Johnson & Johnson over conditions that led to the recall of childrens Tylenol and other liquid childrens medicines this spring. The news came out of a Congressional hearing on the recall relating to Johnson & Johnsons McNeil Consumer Healthcare plant in Fort Washington, Pa. The FDA has yet to prove a link between more than 700 reported cases of side effects that are being attributed to one of the recalled medicines. 30 deaths are also being investigated. The cases were reported between January 1, 2008 and April 30, 2010.

According to news reports, Deputy FDA Commissioner Joshua Sharfstein told the committee that the FDA had growing concerns about the quality of the companys manufacturing process before the April, 30 recall. McNeil on April 30 announced a voluntarily recall of products including a variety of liquid formulations of Tylenol, Motrin, Benadryl and Zyrtec. Johnson & Johnson recalled roughly 40 different types of their childrens medicines. The recall involved 70 percent of the market for those products. The recent recall followed an inspection of the Fort Washington plant, which temporarily suspended production May 4, by the FDA. That inspection, according to the agency, identified a series of quality control issues including the discovery of raw materials contaminated with bacteria in some of the recalled medicines. In the inspection report, the FDA observed the presence of Burkholderia cepacia bacteria. It was the third major recall of McNeill products in eight months due to quality problems. McNeil had two other infants' liquid medications product recalls in September 2009, again based upon the presence of Burkholderia cepacia bacteria. Burkholderia cepacia bacteria can cause pneumonia in immunocompromised individuals with an underlying lung condition. Infants and children with underlying lung conditions such as cystic fibrosis, obstructive lung disease, or chronic granulomatous disease may be particularly susceptible to pneumonia caused by these bacteria. Burkholderia cepacia bacteria are unfortunately resistant to some widely used antibiotics and can also survive topical antiseptics. In the worst case scenario, Burkholderia cepacia bacteria can cause lung function to become severely compromised, leading to the patient's death.

The FDA had cited the company several times in the last couple of years, but the McNeil plant was never officially closed. Johnson & Johnson has voluntarily closed the plant and is reportedly restructuring their staff and updating safety guidelines. But pressure is also growing on Johnson & Johnson to explain whether it sought to conceal an earlier recall of children's medicines in the US by requesting that a contractor discreetly buy suspect stocks from retailers. The Congressional committee reportedly has obtained an internal memorandum instructing a company to purchase on J&J's behalf all packs of a variety of Motrin IB caplets, a pain relief medicine, to send back to the manufacturer. The document is dated June 12 last year and tells employees of 'WIS . . . on behalf of Johnson & Johnson' to 'quickly enter each store, find all of the Motrin product described, make the purchase transaction, secure the receipt, and leave.' It reads: 'You should simply 'act' like a regular customer while making these purchases. There must be no mention of this being a recall of the product! ' The memo follows concerns identified as early as late 2008 at Johnson & Johnsons Puerto Rico factory about the 'dissolution profile' of the chemicals in Motrin which reportedly risked reducing its potency.

Colleen Goggins, worldwide chairman of the consumer group of Johnson & Johnson, said there was never any intent to mislead,' and Johnson & Johnson had used a third-party contractor to purchase packets of Motrin primarily sold in petrol stations but the Puerto Rico office of the FDA had been informed of its action. But Rep Edolphus Towns, chairman of the House committee, said the FDA had only learnt about the problems afterwards and expressed concern about the 'phantom recall' described in the memo. Since J&Js recall on April 30, J&J stock has declined approximately 10%. Shares of Johnson & Johnson (JNJ) traded recently at $58.30 per share, down from its 52weekHigh of $66.20 per share, and over $71 per share in 2008.