J&J investors fault board for ignoring 'red flags'

Some Johnson & Johnson ($JNJ) investors have resorted to court action, saying that directors and executives not only ignored 'red flags' that something was rotten within J&J, but allowed the company's once-stellar reputation to be destroyed.

Some Johnson & Johnson ($JNJ) investors are fed up with recalls and government investigations. So they've resorted to court action, saying that directors and executives not only ignored "red flags" that something was rotten within J&J, but allowed the company's once-stellar reputation to be destroyed.

The legal complaint comes after a year of repeated recalls, failed FDA inspections, and criminal investigations. As reported by Bloomberg, the irate shareholders contend that J&J's board of directors were much too lax. Their "utter disregard for their fiduciary duties"--including fostering "a culture of systemic, calculated and widespread legal violations"--has destroyed J&J's image as "the gold standard for integrity and excellence," the shareholders claim.

As the investors tell it, J&J's quality control and compliance efforts didn't fall short beginning this year. Trouble has been brewing for years, and the board should have known that. There w