An investigation on behalf of investors in MiMedx Group Inc (NASDAQ:MDXG) shares over potential wrongdoing at MiMedx Group Inc was announced and NASDAQ:MDXG stockholders should contact the Shareholders Foundation.
San Diego, CA -- (SBWIRE) -- 01/11/2017 -- An investigation on behalf of investors in shares of MiMedx Group Inc (NASDAQ:MDXG) was announced over potential breaches of fiduciary duties by certain officers and directors at MiMedx Group Inc.
Investors who purchased shares of MiMedx Group Inc (NASDAQ:MDXG) and currently hold any of those NASDAQ:MDXG shares have certain options and should contact the Shareholders Foundation at firstname.lastname@example.org or call 858-779-1554.
The investigation by a law firm concerns whether certain MiMedx Group Inc directors breached their fiduciary duties and caused damage to the company and its shareholders.
In December 2016 a lawsuit was filed by two former employees of MiMedx Group Inc in the U.S. District Court for the District of Minnesota against MiMedx Group over alleged violations of the Dodd-Frank Act. The plaintiffs allege that MiMedx Group Inc implemented a fraudulent revenue recognition scheme to allegedly artificially inflate quarterly revenue. According to the plaintiffs since at least 2014, MiMedx Group Inc engaged in an allegedly scheme of "channel stuffing," which MiMedx Group Inc used to fraudulently recognize revenue in its certified financial statements before the revenue had been realized and earned and that under the scheme, MiMedx Group Inc entered into a distribution agreement with a contractor which allowed MiMedx Group Inc to sell directly to government accounts. The plaintiff claims that MiMedx Group Inc would then send its products directly to the Department of Veteran's Affairs ("VA") hospitals, but neither the contractor nor the VA requested the orders. The plaintiff alleges that MiMedx Group Inc would then claim these orders as revenue to meet its quarterly forecasts, even though the VA hospitals were unaware of the channel-stuffing orders.
The complaint alleges that MiMedx Group Inc's revenue recognition scheme did not meet the conditions for recognizing revenue under Generally Accepted Accounting Principles. Further, the plaintiff claims that MiMedx Group Inc misleadingly categorized its revenue as government sales, even though the government is not a party to the initial "sale", that MiMedx Group Inc failed to provide any disclosures in financial statements that it accelerated material amounts of sales revenue as a business practice or discussed its financial implications for future periods, and that as a result, MiMedx Group Inc's revenue has been artificially inflated for several reporting periods.
In response to the December 2106 lawsuit MiMedx Group Inc said that the lawsuit is meritless. Furthermore, Chairman and CEO of MiMedx Group Inc said that in the process of the investigation into allegations raised by the two former employees it was revealed that these had been selling competitive products and other products for over a year and therefore their employment was terminated and lawsuits filed against them for their breach of their duty of loyalty and contractual obligations to the Company.
Those who purchased shares of MiMedx Group Inc have certain options and should contact the Shareholders Foundation.
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