SEC Charges Biotech Company and Executives With Accounting Fraud

The Securities and Exchange Commission today charged Georgia-based biotech company MiMedx Group Inc. and three former top executives with defrauding investors by misstating the company’s revenue and attempting to cover up their misconduct. MiMedx has agreed to a settlement to resolve the claims. The SEC alleges that from 2013 to 2017, MiMedx prematurely recognized revenue from sales to MiMedx’s distributors and exaggerated MiMedx’s revenue growth. According to the SEC’s complaint, MiMedx improperly recognized revenue because its former CEO Parker H. “Pete” Petit and former COO William C. Taylor entered into undisclosed side arrangements with five distributors. These side arrangements allowed distributors to return product to MiMedx or conditioned distributors’ payment obligations on sales to end users. Petit, Taylor, and former CFO Michael J.