The Securities and Exchange Commission today announced that it awarded two financial analysts more than $2.5 million for reporting misconduct at Orthofix International N.V. As a result of the whistleblowers’ high-quality tip, in 2017, Orthofix and three former executives settled with the SEC for $8.37 million, to be distributed to harmed investors. The outside analysts were granted 30% of the monetary sanctions collected, the maximum amount permitted under the SEC’s program.
The whistleblowers conducted sophisticated analyses of publicly available information to support their suspicions that Orthofix, a leading medical device company, was engaging in widespread accounting fraud. Labaton Sucharow used private investigators to corroborate their clients’ findings. According to the SEC’s final order, from 2011-2013, Orthofix engaged in “channel stuffing,” materially inflating its earnings by distributing more product than its customers needed. The company also engaged in various other forms of improper accounting in separate transactions.
‘Enforcement 40’ for 2020
Join Us On LinkedIn
Join the Securities Litigation and Enforcement Group on LinkedIn