OrthoSynetics, Metairie, La, a provider of business services to orthodontic and dental practices, lauded the Securities and Exchange Commission’s (SEC) suit against Bart Palmisano, Jr, former chief financial officer and chief operating officer of OCA Inc. In conjunction with the filing of the complaint, Palmisano consented to the entry of an order imposing a $100,000 fine and a 10-year bar from serving as an officer or director of a public company. OrthoSynetics is the new trade name of OCA since OCA emerged from bankruptcy last year.
"We are pleased that the SEC has brought this suit and resolved its claims against Palmisano. This represents a closing chapter in the legacy of the old OCA," said Chris Roussos, president and CEO of OrthoSynetics. "The suit was expected and is consistent with the complaint we previously filed against the old OCA’s management and directors. We cooperated with the SEC throughout this process, and there were no surprises in their findings."
The SEC’s complaint alleges that Palmisano fraudulently manipulated OCA’s financial accounting systems to overstate OCA’s revenue to meet Wall Street expectations for every quarter from 1998 to September 2001. Palmisano’s manipulations, as set forth in the complaint, were to OCA’s corporate financial reporting. Neither the SEC nor the company has identified any instances that impacted the integrity of its affiliated doctors’ financial statements.
This complaint comes 1 year after the company emerged from bankruptcy. During the past year, OrthoSynetics has significantly overhauled its management team and its accounting systems. OrthoSynetics, which is now privately held, has an independent board of directors, a new management team, and a finance team. OrthoSynetics has also implemented new internal financial controls to prevent future financial irregularities.
"We have taken considerable steps to distance ourselves from the old OCA, strengthen the integrity of our company’s financial foundation, and position ourselves for future growth," said Roussos. "Our doctors can be confident in knowing that the board, leadership team, and financial safeguards now in place have made our company stronger to ensure the prosperity and growth of their practices. We also have taken steps to settle our own derivative lawsuit against former management, and we are in the process of settling those claims as well."
[PR Newswire, February 13, 2008]