SEC CHARGES ORTHOFIX INTERNATIONAL WITH FCPA VIOLATIONS

FROM: U.S. SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission today charged Texas-based medical
device company Orthofix International N.V. with violating the Foreign Corrupt
Practices Act (FCPA) when a subsidiary paid routine bribes referred to as
chocolates to Mexican officials in order to obtain lucrative sales contracts
with government hospitals.

The SEC alleges that Orthofixâ's Mexican subsidiary Promeca S.A. de C.V.
bribed officials at Mexico’s government-owned health care and social services
institution Instituto Mexicano del Seguro Social (IMSS). The chocolates came
in the form of cash, laptop computers, televisions, and appliances that were
provided directly to Mexican government officials or indirectly through front
companies that the officials owned. The bribery scheme lasted for several years
and yielded nearly $5 million in illegal profits for the Orthofix
subsidiary.

Orthofix agreed to pay $5.2 million to settle the SEC’s charges.
According to the SEC's complaint filed in U.S. District Court for the Eastern
District of Texas, the bribes began in 2003 and continued until 2010. Initially,
Promeca falsely recorded the bribes as cash advances and falsified its invoices
to support the expenditures. Later, when the bribes got much larger, Promeca
falsely recorded them as promotional and training costs. Because of the bribery
scheme, Promeca's training and promotional expenses were significantly over
budget. Orthofix did launch an inquiry into these expenses, but did very little
to investigate or diminish the excessive spending. Later, upon discovery of the
bribe payments through a Promeca executive, Orthofix immediately self-reported
the matter to the SEC and implemented significant remedial measures. The company
terminated the Promeca executives who orchestrated the bribery scheme.

The SEC's proposed settlement is subject to court approval. Orthofix
consented to a final judgment ordering it to pay $4,983,644 in disgorgement and
more than $242,000 in prejudgment interest. The final judgment would permanently
enjoined the company from violating Sections 13(b)(2)(A) and 13(b)(2)(B) of the
Securities Exchange Act of 1934. Orthofix also agreed to certain undertakings,
including monitoring its FCPA compliance program and reporting back to the SEC
for a two-year period.

Orthofix also disclosed today in an 8-K filing that it has reached an
agreement with the U.S. Department of Justice to pay a $2.22 million penalty in
a related action.