Shareholders pound Orthofix with lawsuits over restated financials

August 21, 2013 by Brad Perriello

A raft of shareholders sue Orthofix after the medical device company's plan to restate its financials sends share prices down 16% in a day.

Shareholders pound Orthofix with lawsuits over restated financials

Shareholders of Orthofix (NSDQ:OFIX) piled a raft of lawsuits on the medical device company, accusing it of failing to warn investors that would have to restate its financial results going back to 2011.

The July 29 announcement sent OFIX shares down more than 16% to $22.63 apiece. Share prices have hovered at that level ever since, prompting a purported class-action lawsuit in the U.S. District Court for Southern New York.

Late last month Orthofix said an audit of its books is prompting it to restate its financial results for 2011, 2012 and Q1 2013 after discovering revenues that were improperly recognized. The lawsuits allege that Lewisville, Texas-based Orthofix and its management failed to disclose the revenues issue, meaning its communications with investors were false.

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The ongoing review by the Orthofix board of directors' audit committee means the Lewisville, Texas-based orthopedics company will be late in filing its results for the 2nd quarter, according to regulatory filings.

Orthofix said that "certain revenues recognized during 2011 and 2012, upon further evaluation, should not have been recognized or should not have been recognized during the periods in which they were recognized," according to the filings.

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