The case is unusual because company
whistleblowers are typically more likely to be insiders and
legal questions have been raised in the past as to whether
outsiders using public information can qualify for an award
under the SEC's landmark whistleblower program introduced
following the 2007-09 financial crisis.
"Detailed analysis by outsiders of companies can have a
significant impact on the enforcement of the federal securities
laws," Chief of the Office of the Whistleblower Jane Norberg
said in a statement.
In 2017, the Texas-based medical device maker, formerly known as
Orthofix International NV, paid $8.25 million to settle
https://www.sec.gov/news/
pressrelease/2017-18.html SEC accounting fraud charges. Between
2011 and 2013, the company materially inflated its earnings by
distributing more products than its customers needed, known as
"channel stuffing," among other inappropriate accounting
practices, the SEC said in 2017.
On Tuesday, the agency said it had issued the bounty but
declined to name the company or individuals concerned.
Jordan Thomas, an attorney for the whistleblowers with law firm
Labaton Sucharow, said the SEC reward resulted from the Orthofix
International 2017 case.
In 2012, Orthofix International first caught the attention of
the analysts, who declined to be identified. They regularly
swapped notes on company numbers they thought looked odd and
subsequently tipped off the regulator about irregularities in
Orthofix International's filings, Reuters reported https://www.reuters.com/article/sec-fraud-whistleblowers/rpt-not-an-inside-job-how-two-analysts-became-sec-whistleblowers-idUSL1N1HW19B
in 2017.
"These analysts could have ignored their hunches and remained
silent—like so many others on Wall Street," said Thomas.
(Reporting by Katanga Johnson; Editing by Marguerita Choy)
[© 2020 Thomson Reuters. All rights
reserved.] Copyright 2020 Reuters. All rights reserved. This material may not be published,
broadcast, rewritten or redistributed.
Thompson Reuters is solely responsible for this content.
|
|