Litigation Release No. 24647 / October 17, 2019
Securities and Exchange Commission v. Philip R. Jacoby, et al., Civil Action No. 17-cv-03230-CCB (U.S. District Court for the District of Maryland)
On October 8, 2019, the U.S. District Court for the District of Maryland entered a final judgment against Bobby Dwayne Montgomery, a former executive of biotech company Osiris Therapeutics, Inc. for his role in Osiris’s fraudulent conduct.
The SEC’s action, filed November 2, 2017, charged Osiris with routinely overstating company performance and issuing fraudulent financial statements for a period of nearly two years, and charged several of its former officers for related misconduct. The SEC alleged that Montgomery, Osiris’s former chief business officer, caused Osiris to book fictitious revenue and provided false information to Osiris’s auditors.
Montgomery consented to a judgment enjoining him from future violations of the provisions of the federal securities laws that prohibit falsifying books and records and lying to auditors, and ordering him to pay a civil penalty of $40,000.
Osiris previously settled the SEC’s charges and paid a $1.5 million penalty. One of Osiris’s former chief financial officers, Gregory I. Law, was dismissed from the case in September 2019. The SEC’s litigation against Osiris’s former chief executive officer, Lode B. Debrabandere, and the other former chief financial officer, Philip R. Jacoby Jr., is ongoing.
The SEC’s investigation was conducted by Laura Ordaz, Anne Romero, and Danielle Voorhees and was supervised by Laura Metcalfe. The SEC’s litigation is being led by Nicholas Heinke, Zachary Carlyle, and Polly Atkinson.