ArthroCare updates on remaining federal issues

January 11, 2013 by Arezu Sarvestani

ArthroCare president & CEO David Fitzgerald updates on a U.S. Justice Dept. investigation into the company's spine product sales and a False Claims Act investigation that has just come to light.

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ArthroCare (NSDQ:ARTC) president & CEO David Fitzgerald provided highlights on the company's ongoing beef with federal investigators, telling an audience at the J.P. Morgan healthcare conference in San Francisco this week that at least 1 of the pair of remaining legacy issues may be closing soon.

The Texas-based surgical devices maker has had a spate of legal troubles in recent years, including an SEC investigation that closed in February 2011 and a derivatives matter that closed in December 2011, Fitzgerald told meeting attendees.

The company has yet to close the books on a U.S. Justice Dept. investigation into ArthroCare's sales & marketing pertaining to its spinal business, and is in the early stages of a False Claims Act investigation, he said.

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"The DOJ criminal investigation that began in December of 2008 is ongoing and we continue to actively cooperate with the investigation," Fitzgerald said this week. "Although the DOJ has not committed to an end date and may request future tolling agreements, we think it's possible that the DOJ investigation of the company may complete soon."

DOJ tolling agreements allow the federal agency to pursue investigations into matters that would otherwise be considered beyond the statute of limitations.

ArthroCare is also facing a FCA probe, although the company has yet to reveal many details.

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