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Globus Medical Issues Multiple New Bribery & Fraud Warnings

Never before used language suggests medical device maker is newly aware of how federal fraud laws are applied.

February 22, 2024

Globus Medical Inc. (GMED), a medical device maker for musculoskeletal disorders, inserted new language in its latest annual report that suggests the company is seemingly more sensitive to the intricacies of federal bribery and fraud statutes.

In addition to boilerplate language regarding anti-kickback laws, Globus Medical included new language suggesting a bribe may be defined as something other than cash:

“The term “remuneration” has been interpreted broadly to include anything of value.”

Regarding the False Claims Act (FCA), which prohibits presenting fraudulent claims for payment to the federal government, Globus included a new warning regarding another scenario in which the company might run afoul of the FCA other than making a false statement to get a false claim paid:

“...or knowingly avoiding, decreasing or concealing an obligation to pay money to the federal government.”

In what some might perceive as management attempting to distance itself from any future potential trouble, Globus also added new language that warns investors the company could find itself in violation of the FCA without meaning to commit fraud:

“Intent to deceive is not required to establish liability under the civil False Claims Act. Rather, a claim may be false for deliberate ignorance of the truth or falsity of the information provided or for acts in reckless disregard of the truth or falsity of that information.”

Lastly, while explaining how federal fraud suits are generally filed after a whistleblower comes forward, Globus inserted new language warning such action may also result in non-government entities pursuing legal action:

“In addition, private payers have been filing follow-on lawsuits alleging fraudulent misrepresentation, although establishing liability and damages in these cases is more difficult than under the FCA.”

The new language does not appear in any of Globus Medical’s five previous annual reports.

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