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Ex-OSIR CFO pleads guilty to fraud, SEC "misreporting"

https://www.biospace.com/article/sec-charges-osiris-four-former-execs-with-accounting-fraud-/

SEC Charges Osiris, Four Former Execs With Accounting Fraud

Published: Nov 03, 2017 By Alex Keown

Maryland-based Osiris Therapeutics has settled a case of accounting fraud with the U.S. Securities and Exchange Commission, but four former company executives will face charges for the alleged financial misreporting.

According to the SEC charges, Osiris routinely overstated company performance and issued fraudulent financial statements for a period of nearly two years. During this time, the SEC said Osiris executives “improperly recognized revenue using artificially inflated prices, backdated documents to recognize revenue in earlier periods, and prematurely recognized revenue upon delivery of products to be held on consignment.” Additionally, the SEC said the company and its executives allegedly and knowingly used false pricing data and “attempted to book revenue on a fictitious transaction,” as well as other improper accounting procedures.

“Corporate cultures cannot be so fixated on higher revenues that they use illegal accounting gimmicks to meet the financial numbers they desire,” Julie Lutz, director of the SEC’s Denver regional office, said in a statement.

On Thursday, the SEC charged former chief executive officer Lode Debrabandere, chief financial officers Philip Jacoby Jr. and Gregory Law, and chief business officer Bobby Dwayne Montgomery with accounting fraud. Debrabandere resigned from the company in 2016. Montgomery took over as interim CEO and was then appointed full-time to the position...

https://finance.yahoo.com/news/former-osiris-therapeutics-executive-pleads-224920048.html

Former OSIR CFO Philip Jacob pleaded guilty to making false statements to increase reported revenue.

Osiris separately agreed to pay $1.5 million to settle a related civil lawsuit by the U.S. Securities and Exchange Commission, court records showed...

As part of the plea, Jacoby and prosecutors agreed that an appropriate sentence under federal guidelines would be four to 10 months in prison and a fine of up to $5 million. Jacoby is scheduled to be sentenced on Feb. 2...

In a criminal information filed in Manhattan federal court on Thursday, prosecutors said that Jacoby recorded $1.1 million in revenue in the last quarter of 2014 from the sale of the company's Ovation bone matrix product, even though the product had actually been given to a distributor on consignment rather than sold at the time.