01.08.14
ArthroCare Corp. has entered into a deferred prosecution agreement to resolve a years-long U.S. Department of Justice investigation into allegations of a $400 million securities fraud scheme.
As part of the agreement, ArthroCare will pay a $30 million fine to the DOJ and maintain a compliance program that it must report on annually to the agency.
The probe was first announced in December 2008 and focused on allegations of securities and related fraud committed under a previous management team, the Austin, Texas-based company said.
Last year, former ArthroCare senior vice presidents John Raffle and David Applegate pleaded guilty to conspiracy to commit securities and wire fraud in connection with the fraud scheme, according to the Justice Department.
Raffle admitted to falsely inflating ArthroCare's sales by parking millions of dollars worth of ArthroCare's products with its distributors at the end of two quarters in 2007 and 2008, according to the Justice Department.
On Jan. 7, the Justice Department said the company's former chief executive, Michael Baker, and former chief financial officer, Michael Gluk, are scheduled to stand trial on related charges on May 5.
ArthroCare develops surgical devices, instruments and implants.
As part of the agreement, ArthroCare will pay a $30 million fine to the DOJ and maintain a compliance program that it must report on annually to the agency.
The probe was first announced in December 2008 and focused on allegations of securities and related fraud committed under a previous management team, the Austin, Texas-based company said.
Last year, former ArthroCare senior vice presidents John Raffle and David Applegate pleaded guilty to conspiracy to commit securities and wire fraud in connection with the fraud scheme, according to the Justice Department.
Raffle admitted to falsely inflating ArthroCare's sales by parking millions of dollars worth of ArthroCare's products with its distributors at the end of two quarters in 2007 and 2008, according to the Justice Department.
On Jan. 7, the Justice Department said the company's former chief executive, Michael Baker, and former chief financial officer, Michael Gluk, are scheduled to stand trial on related charges on May 5.
ArthroCare develops surgical devices, instruments and implants.