As Osiris moves on from fraudulent past, one exec settles up with SEC
Two years after the SEC charged four Osiris Therapeutics execs for cooking the books to fabricate a rosy picture at the company, federal regulators have handed down their first judgment.
Bobby Dwayne Montgomery, the former chief business officer at Osiris, has agreed to pay a civil penalty of $40,000 and be legally barred from future violations of securities laws, including those that prohibit falsifying books and records and lying to auditors.
“Our client is pleased to have resolved this matter on a no-admit no-deny basis, and looks forward to moving on with his life,” Stephen Crimmins, Montgomery’s lawyer, told Reuters.
Within the whole scheme to routinely overstate company performance and issue fraudulent financial statements — charges that Osiris has since paid $1.5 million to settle — the SEC specifically alleged that Montgomery “caused Osiris to book fictitious revenue and provided false information to Osiris’s auditors.”
In a statement, the SEC noted that Gregory Law, one of the former CFOs has been dismissed from the case while litigation against former CEO Lode Debrabandere and the other former CFO, Philip Jacoby, are pending.
Jacoby has previously pled guilty to duping auditors in a district court and was sentenced to a $10,000 fine, but the 67-year-old was spared from prison.
Osiris is a small but high profile player in the wound care and sports medicine field. It has since retained Ernst & Young to restate its numbers for 2015 and 2016, remade its top team, and secured an acquisition deal from British medtech manufacturer Smith+Nephew. That $660.5 million buyout valued Osiris shares at $19, just a couple dollars shy of its (illusory) 2015 high.