FORMER ARTHROCARE CEO INDICTED (Orthopedics This Week)
Former ArthroCare CEO and CFO surrender to officers after fraud charges (MedCityNews-Reuters)
Two former executives of ArthroCare Corp have been charged with a $400 million scheme to defraud investors by inflating the company's earnings, the U.S. Justice Department said on Wednesday.
Former chief executive officer Michael Baker and former chief financial officer Michael Gluk were charged in the federal indictment and surrendered to law enforcement officers, the Justice Department said in a statement.
A grand jury returned the indictment on Tuesday and it was unsealed on Wednesday in U.S. District Court for the Western District of Texas.
Prosecutors claim that ArthroCare, a maker of medical devices based in Austin, Texas, inflated earnings by shipping extra products to its distributors at the end of financial quarters, even though the shipments were not for actual orders, so ArthroCare could count the shipments as sales and meet earnings forecasts.
Distributors agreed to accept the shipments in exchange for cash commissions, the ability to return the products and other incentives, prosecutors said.
ArthroCare said in 2008 it was...
