Orthofix to pay $14m to settle foreign bribery beef with SEC

The SEC said today that Orthofix (NSDQ:OFIX) has agreed to cough up more than $14 million to settle federal charges that it improperly booked revenue and made improper payments to doctors at government-owned hospitals in Brazil to increase sales. According to the SEC, the Texas-based medical device company improperly recorded some revenue as soon as a product was shipped, even if certain events had to occur first in order to receive payment. The company also immediately recorded revenue when it had provided its customers with significant time extensions to make payments. From 2011 to the 1st quarter of 2013, the company misstated certain financial statements because of these accounting failures, the SEC wrote. “Orthofix’s accounting failures were widespread and significant, causing Orthofix to make false statements to the public about its financial condition,” the SEC’s enforcement division’s associate director Antonia Chion said in prepared remarks. The SEC also found that Orthofix’s Brazilian subsidiary violated the Foreign Corrupt Practices Act by using high discounts and making improper payments through 3rd-party commercial reps and distributors to encourage doctors in government-funded hospitals to use the company’s products. “Orthofix did not have adequate internal controls across all its subsidiaries and failed to detect and prevent the improper payments in Brazil that were intended to boost sales,” the chief of the SE...
Source: Mass Device - Category: Medical Equipment Authors: Tags: Legal News Wall Street Beat Orthofix International Source Type: news