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Misonix alerts SEC, DOJ of possible violations

Misonix has alerted federal agencies that the company

Misonix has alerted federal agencies that the company may have known about practices by a distributor in China that "raise questions under the Foreign Corrupt Practices Act." Photo Credit: Ed Betz

Farmingdale medical device maker Misonix Inc. has alerted federal agencies that the company may have known about practices by a distributor in China that “raise questions under the Foreign Corrupt Practices Act.”

The act bars Americans from bribing foreign government officials to obtain or retain business, and requires publicly traded companies to maintain accounting standards that would reveal compliance with anti-bribery provisions.

In a filing with the Securities and Exchange Commission, Misonix said it had contacted that agency on Tuesday and the Department of Justice on Wednesday about the findings of an internal investigation. The distributor was described in the filing as an “independent Chinese entity.”

The filing was made after the stock market closed Wednesday. Shares of Misonix, down more than 40 percent year to date, rose one cent to close at $5.30 Thursday on the Nasdaq Stock Market.

Calls for comment Thursday afternoon were referred to an outside investor relations contact, who said the company would not elaborate on the SEC filing.

Earlier this month, Misonix disclosed that it would not be able to file its annual report on time and that the audit committee of the board of directors had determined that its internal controls over financial reporting were deficient as of June 30.

The company’s audit committee has hired outside counsel to conduct an investigation on “these and other matters,” Misonix said in its latest filing.

Misonix said that the company cannot make any predictions about the actions by the SEC, which regulates publicly traded companies, or the DOJ, but that a finding that laws were broken “could result in the imposition of fines, civil and criminal penalties, equitable remedies, including profit disgorgement, and injunctive relief.”

In August, Misonix announced that board member Stavros G. Vizirgianakis would take over as interim chief executive, replacing Michael McManus Jr., who served as CEO for 16 years. McManus also resigned from the board of directors.

Misonix makes ultrasonic medical devices used to remove damaged tissue from wounds and in spine surgery, neurosurgery and orthopedic surgery.

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