HAGENS BERMAN, NATIONAL TRIAL ATTORNEYS, Updates OrthoPediatrics (KIDS) Fraud Investigation in Light of New Culper Report, Encourages Investors to Contact Its Attorneys Now
SAN FRANCISCO, Dec. 15, 2020 /PRNewswire/ -- Hagens Berman urges OrthoPediatrics Corp. (NASDAQ: KIDS) investors to submit their losses now. The firm is investigating possible securities law violations.
Visit: www.hbsslaw.com/investor-fraud/KIDS
Contact An Attorney Now: [email protected]
844-916-0895
OrthoPediatrics Corp. (KIDS) Investigation:
The investigation centers on whether OrthoPediatrics artificially inflated reported revenues by engaging in an illegal channel stuffing scheme.
In past quarters, OrthoPediatrics touted its "consistent 20% plus growth rate," which in turn has allowed the Company to maintain a valuation at 11 times annual revenues. In doing so, OrthoPediatrics affirmed that it complied with GAAP, including by only recognizing revenue on products consigned to its distributors "when products are used in procedures."
But on Dec. 2, 2020, the veracity of OrthoPediatrics' growth story came into question when Culper Research published a scathing report.
Based on interviews with OrthoPediatrics distributors and former executives, Culper concludes: (1) OrthoPediatrics "has engaged in a channel stuffing scheme that has systematically and significantly overstated revenues," (2) "[w]e believe that the Company has abused its ability to book revenues upon shipment by selling and shipping excess product directly to its distributors, many of whom are exclusive to the Company," and (3) "distributors have been induced to buy excess product directly from the Company in exchange for (a) equity-based awards, (b) the opportunity to return product and/or (c) product discounts or increased commission schedules."
This news drove the price of OrthoPediatrics shares crashing lower.
Most recently, Culper published a follow up report on Dec. 14, 2020, that questions one sell-side analyst's reasons for siding with OrthoPediatrics management after Culper's channel stuffing report and reiterates "[w]e continue to believe that OrthoPediatrics is a structurally broken business which has relied on nefarious tactics to inflate its reported revenues."
"We're focused on investor losses and whether OrthoPediatrics engaged in revenue recognition fraud," said Reed Kathrein, the Hagens Berman partner leading the investigation.
If you are an OrthoPediatrics investor, click here to discuss your legal rights with Hagens Berman.
Whistleblowers: Persons with non-public information regarding OrthoPediatrics should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email [email protected].
About Hagens Berman
Hagens Berman is a national law firm with nine offices in eight cities around the country and eighty attorneys. The firm represents investors, whistleblowers, workers and consumers in complex litigation. More about the firm and its successes is located at hbsslaw.com. For the latest news visit our newsroom or follow us on Twitter at @classactionlaw.
Contact:
Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP
Related Links
WANT YOUR COMPANY'S NEWS FEATURED ON PRNEWSWIRE.COM?
Newsrooms &
Influencers
Digital Media
Outlets
Journalists
Opted In
Share this article