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"We are pleased that the SEC has brought this suit and resolved its claimsagainst Palmisano, Jr. This represents a closing chapter in the legacy of theold OCA," said Chris Roussos, president and CEO of OrthoSynetics(TM). "Thesuit was expected and is consistent with the complaint we previously filedagainst the old OCA's management and directors. We cooperated with the SECthroughout this process and there were no surprises in their findings."
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The SEC's complaint alleges that Palmisano, Jr. fraudulently manipulatedOCA's financial accounting systems to overstate OCA's revenue to meet WallStreet expectations for every quarter from 1998 to September 2001. Mr.Palmisano, Jr.'s manipulations, as set forth in the complaint, were to OCA'scorporate financial reporting. Neither the SEC nor the company has identifiedany instances that impacted the integrity of its affiliated doctors' financialstatements.
This complaint comes just more than one year after the company emergedfrom bankruptcy. During the past year, OrthoSynetics(TM), has significantlyoverhauled its management team and its accounting systems. OrthoSynetics(TM), which is now privately held, has an independent board of directors, newmanagement team, and finance team. Moreover, OrthoSynetics(TM) hasimplemented new internal financial controls to prevent future financialirregularities.
"We have taken considerable steps to distance ourselves from the old OCA,strengthen the integrity of our company's financial foundation, and positionourselves for future growth," said Roussos. "Our doctors can be confident inknowing that the board, leadership team and financial safeguards now in placehave made our company stronger to ensure the prosperity and growth of theirpractices. We also have taken steps to settle our own derivative lawsuitagainst former management, and we are in the process of settling those claimsas well."
OrthoSynetics(TM) is an orthodontic practice services firm that managesthe business and marketing functions of orthodontics practices, includingadvertising, payroll processing, financial reporting, purchasing, technicalsupport and patient financial services. The company currently serves about350 Orthodontic Practice locations.
SOURCE OrthoSynetics
