Wright Medical Group, Inc.
Robbins Umeda LLP Announces an Investigation of Wright Medical Group, Inc. for Shareholders
Robbins Umeda LLP, a shareholder rights litigation firm, has commenced an investigation into possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Wright Medical Group, Inc. (NASDAQGS: WMGI). WMGI is an orthopedic medical device company.
In September 2010, WMGI paid $7.9 million and entered into a deferred prosecution agreement (“DPA”) to resolve criminal and civil investigations into whether it paid kickbacks to induce doctors to use its hip and knee devices. Pursuant to a DPA, a company will be granted amnesty in exchange for agreeing to fulfill certain requirements, such as paying fines and implementing corporate reforms to ensure that the wrongdoing does not reoccur.
On April 5, 2011, WMGI announced that Gary D. Henley, the company’s Chief Executive Officer since 2006 and a director, resigned before a board of directors meeting called to discuss management’s oversight of the company’s “ongoing compliance program” related to the DPA. On the news of the CEO’s resignation, the company’s stock lost 12% of its value. The company further disclosed that it fired Frank S. Bono, WMGI’s Senior Vice President and Chief Technology Officer, “for failing to exhibit appropriate regard for the company’s ongoing compliance program.” Several additional executives, including the company’s General Counsel, have also resigned.
On May 5, 2011, in its first quarter earnings press release, Wright announced that it received a letter from the U.S. Attorney’s Office for the District of New Jersey stating that the U.S. Attorney’s Office believes WMGI knowingly and willfully breached material provisions of the DPA. Robbins Umeda LLP’s investigation focuses on whether the directors and officers of Wright harmed the company by breaching their fiduciary duties to shareholders by failing to comply with the DPA and failing to prosecute the wrongdoers.
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