Labaton Sucharow’s Whistleblower Clients Credit Ability to Report Anonymously
SEC Awards Analysts For Reporting Misconduct At Orthofix International
FOR IMMEDIATE RELEASE – New York, NY – September 1, 2020 -- 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.
“These analysts could have ignored their hunches and remained silent—like so many others on Wall Street. Instead, they applied formidable analytical skills to connect the dots for the SEC and protect innocent investors. Imagine what would happen if others follow their lead,” remarked Jordan A. Thomas, an SEC veteran who chairs the whistleblower team at Labaton Sucharow. “In this case, the great mystery has always been where were the company’s lawyers, accountants and compliance professionals. Investors deserve more from gatekeepers.”
"We still can’t believe it. When we reported, we knew the numbers didn’t add up, but we doubted that the SEC would do anything about it,” noted the anonymous whistleblowers who used the aliases Mr. Smith and Mr.
Jones. “We were wrong about that. The SEC took our analysis and ran with it. Equally important, we were able to remain anonymous – which is crucial in our industry.”
Awards To Whistleblowers
The SEC has awarded approximately $510 million to whistleblowers since issuing its first award in 2012. All award payments are made from an investor protection fund that is financed by sanctions collected by the SEC. Whistleblowers who report to the SEC can do so anonymously when working with counsel.
A principal architect of the SEC Whistleblower Program, Thomas established Labaton Sucharow’s whistleblower practice in 2011, a team that today boasts more than 100 years of combined experience as senior SEC prosecutors. On behalf of corporate whistleblowers across the world, its attorneys have secured landmark results, including an $83 million bounty in a single action, the largest award in the program’s history; and have represented the first officer of a public company to win an SEC whistleblower award, the first SEC whistleblower given criminal immunity, and the first SEC whistleblower to receive an award due to retaliation. To date, the SEC has recovered more than $1 billion from misconduct reported by Labaton Sucharow clients.
About Labaton Sucharow LLP
For more than 50 years, Labaton Sucharow has been one of the country’s premier law firms representing businesses, institutional investors, and consumers in complex securities and business litigation. The firm established the first national practice exclusively focused on SEC whistleblowers under the leadership of a principal architect of the SEC’s whistleblower program. Consistently ranked among the top plaintiff litigation firms, more information about the firm is available at www.secwhistlebloweradvocate.com.