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Home / Insurance / The SEC distributes $ 2.5 million to Orthofix Medical's external whistleblowers

The SEC distributes $ 2.5 million to Orthofix Medical's external whistleblowers



(Reuters) The US Securities and Exchange Commission on Tuesday awarded a joint $ 2.5 million allotment to two external analysts who flagged financial reporting abuses by Orthofix Medical Inc., the firm and the analysts' lawyers said in separate statements.

The case is unusual because corporate informants are often more likely to be insiders, and legal questions have been asked in the past about whether outsiders who use public information can qualify for an award under the SEC's Landmark Information Program. was introduced after the financial crisis of 2007-2009.

"Detailed analysis of outside companies can have a significant impact on the application of federal securities laws," Whistleblower head Jane Norberg said in a statement. [1

9659002] In 2017, the Texas-based manufacturer of medical devices, formerly known as Orthofix International NV, paid $ 8.25 million to settle SEC accounting fraud. Between 2011 and 2013, the company increased its revenue significantly by distributing more products than customers needed, so-called "channel stuffing", among other inappropriate accounting methods, said the SEC 2017.

On Tuesday, the agency said it had

Jordan Thomas , a whistleblower lawyer at the law firm Labaton Sucharow, said the SEC award stems from the Orthofix International 2017 case.

In 2012, Orthofix International first caught the attention of analysts, who refused to be identified. They regularly exchanged notes on company numbers that they thought looked odd and then tipped the regulator of irregularities in Orthofix International's reports, Reuters reported in 2017.

"These analysts could have ignored their proposals and remained silent – like so many others on Wall Street. In Thomas.


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