The United States Securities and Exchange Commission (SEC) has awarded more than $4.5 million to a former orthopedic surgeon in Brazil who alerted it to an alleged kickback scheme operated by a subsidiary of Zimmer Biomet Holdings Inc.
SEC Awards $4.5 Million to Orthopedic Surgeon Whistleblower
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#zimmerbiometSecondary#whistleblower#securities&exchangecommision
The Brazilian whistleblower, who remains anonymous, sent a tip to the company that alleged significant wrongdoing. The whistleblower submitted the same information to the SEC within 120 days of reporting it to the company.
The company reviewed the whistleblower’s allegations of misconduct and reported the allegations to the SEC and another agency. The SEC opened its own investigation. The company completed its internal investigation, the results were reported to the SEC and the other agency.
The SEC announced the award without identifying the whistleblower or the company; however, the Wall Street Journal (WSJ) reported that the company was a subsidiary of Zimmer Biomet Holdings Inc., which in 2017 settled investigations by the SEC and the U.S. Department of Justice into alleged violations of the U.S. Foreign Corrupt Practices Act. (See Zimmer Biomet Finally Settles for $30.5 Million.)
The WSJ also identified the whistleblower as a former orthopedic surgeon who once served as president of the Brazilian Orthopedic Sports Medicine Society and the whistleblower’s attorneys, Christopher Connors of Connors Law Group LLC and Andy Rickman of Rickman Law Group LLP.
According to the SEC, this is the first time a claimant is receiving an award under the provision of whistleblower rules that incentivizes internal reporting by whistleblowers who also report to the SEC within 120 days.
Jane Norberg, chief of the SEC’s Office of the Whistleblower, said, “In this case, the whistleblower was credited with the results of the company’s internal investigation, which were reported to the SEC by the company and led to the Commission’s resulting enforcement action and the related action…. The whistleblower gets credit for the company’s internal investigation because the allegations were reported to the Commission within 120 days of the report to the company.”
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This is a fascinating development. In my practice we've seen similar outcomes with the revised protocol. The key differentiator seems to be patient selection criteria. Has anyone else noticed the correlation with BMI thresholds?
Great point. I'd push back slightly on the conclusion, the sample size in the cited study is too small to draw population-level inferences. That said, the directional signal is compelling and worth a larger RCT.
We implemented a similar approach last year. Early results are promising but we're still gathering 12-month follow-up data. Happy to share our protocol if anyone is interested.
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