According to the law firm press release, Orthofix, a medical device company headquartered in Curacao, Netherlands Antilles, designs, develops, manufactures, markets, and distributes medical equipment used principally by musculoskeletal medical specialists for spine and orthopedic applications. The company operates through two segments, Spine and Orthopedics.
The complaint alleges that, during the Class Period, defendants issued materially false and misleading statements regarding the Company’s financial performance and future prospects. In particular, defendants misrepresented or failed to disclose the following adverse facts, which were known to defendants or recklessly disregarded by them: (a) certain revenues recognized during 2011 and 2012 should not have been recognized or should not have been recognized during the periods in which they were recognized; (b) Orthofix’s previously issued consolidated financial statements as of and for the fiscal years ended December 31, 2011 and December 31, 2012 (as well as the interim quarterly periods within such years), and for the interim quarterly period ended March 31, 2013, should not be relied upon; (c) Orthofix’s financial statements during 2011, 2012, and the first quarter of 2013 were materially false and misleading and violated generally accepted accounting principles and Orthofix’s publicly disclosed policy of revenue recognition; (d) Orthofix’s Forms 10-Q and 10-K for fiscal years 2011 and 2012, as well as for the first quarter of 2013, failed to disclose then presently known trends, events or uncertainties associated with the Company’s revenues that were reasonably likely to have a material effect on Orthofix’s future operating results; (e) Orthofix’s disclosure controls and procedures over financial reporting were materially deficient and its representations concerning them during the Class Period, including certifications issued by defendants, were materially false and misleading; and (f) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company’s financial performance and outlook during the Class Period.
On July 29, 2013, Orthofix issued a press release announcing, among other things, that it was delaying the release of its financial results for the second quarter of 2013 and that additional time was needed to review matters relating to revenue recognition for prior periods. In response to this announcement, on July 29, 2013, the price of Orthofix shares declined from $27.40 per share prior to the announcement to $22.71 per share, or a drop of 17%, on July 30, 2013, on extremely heavy trading volume. Then, on August 6, 2013, Orthofix issued a press release stating that it would restate its financial statements for fiscal years 2011 and 2012 and the first quarter of 2013.
On November 26, 2013, the Court issued an Order appointing lead plaintiff and approving lead counsel. Lead Plaintiff filed an amended complaint on May 15, 2014. A second amended complaint was filed on July 21.
On March 6, 2015, the Court issued an Order granting in part and denying in part defendants' motions to dismiss. The claims against certain individual defendant were dismissed with prejudice, while the motion to dismiss was otherwise denied.
On December 7, 2015, the parties entered into a Stipulation of Settlement.