A shareholder has filed a class action lawsuit against Orthofix for allegedly misleading investors amidst its acquisition of SeaSpine Holdings.
A merger between the two companies was completed Jan. 5, 2023, according to a Nov. 7 press release.
The lawsuit, filed on behalf of former SeaSpine Holdings Corporation shareholders that purchased or otherwise acquired newly issued Orthofix Medical stock in exchange for SeaSpine, claims that at the time of the merger, defendants failed to disclose that Orthofix lacked adequate internal controls.
The complaint also alleges that Orthofix leadership had deficient compliance and training programs, which resulted in "lax vetting of incoming executive hires; senior management and directors engaging in rampant harassment and other inappropriate misconduct in violation of the company's purported ethical and professional standards; prioritization of personal and financial incentives over ensuring that Orthofix and its management complied with applicable laws, regulations, and contracts," according to the release.
It also alleges that Orthofix's SEC filings and public disclosures had material misstatements.