Judge nixes $42M Orthofix, Justice Dept. settlement

September 7, 2012 by MassDevice staff

A federal judge in Massachusetts rejects a proposed settlement between Orthofix International and the U.S. Justice Dept. over charges that it illegally promoted its bone-growth stimulators.


A federal judge in Boston yesterday put the kaibosh on a $42 settlement deal between Orthofix (NSDQ:OFIX) and the U.S. Justice Dept. over charges that the medical device company illegally promoted its bone-growth stimulators.

Judge William Young of the U.S. District Court for Massachusetts rejected the proposed deal during a hearing yesterday, saying the agreement would limit his ability to impose further penalties, according to Bloomberg BusinessWeek.

"It seems in this case the court’s hands ought not be tied," Young said, according to the website. "I have extreme unease of treating corporate criminal conduct like a civil case."

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Orthofix president & CEO Robert Vaters said the company is still working with DoJ lawyers to put the case to bed.

"The company and the government stand behind their agreements and continue to discuss a resolution of the matter following the court's rejection of the plea," Vaters said in prepared remarks. "We remain confident that this matter will be resolved amicably and in a manner that is in the best interests of our shareholders."