Medical device manufacturer Orthofix announced Tuesday its independent board of directors terminated for cause CFO John Bostjancic, CEO Keith Valentine, and chief legal officer (CLO) Patrick Keran. Via company press release, the Lewisville, Texas, company’s board also will immediately begin a search for permanent successors.
The decision follows an independent outside legal counsel’s investigation, overseen and directed by Orthofix’s independent directors. As a result, the board “determined that each of these executives engaged in repeated inappropriate and offensive conduct that violated multiple code of conduct requirements and was inconsistent with the company’s values and culture.”
In the immediate term, Orthofix announced that Catherine Burzik, Chair of the Orthofix Board of Directors, has been appointed as interim CEO. Geoffrey Gillespie, currently vice president and corporate controller, will act as interim CFO, and Puja Leekha, senior vice president, chief ethics, and compliance officer, will assume the interim role of CLO.
The release stated the investigation and consequent actions are not related to, nor impact, Orthofix’s strategy or performance.
Interim CFO Gillespie has held his current role since May 2021, preceded by nearly 10 years with the company as senior director of U.S. accounting and consolidations. Previously, he held numerous roles at Flowserve and began his career with Deloitte.
The C-suite shakeup comes less than a year after Orthofix and medical manufacturer SeaSpine merged which, according to Medical Design and Sourcing, makes them as of 2022 the 88th largest medical device company in the world, and eighth largest orthopedic manufacturer as of 2023 (pending a Q3 merger between NuVasive and Globus Medical).
Though unconnected to the current C-suite shakeup, Orthofix has faced allegations of impropriety in the past. In 2017, pre-dating the SeaSpine merger which initially brought Bostjancic, Valentine, and Keran into their roles, Orthofix settled charges with the SEC which resulted in more than $14M in penalties. Orthofix admitted wrongdoing in its settlement related to accounting violations and foreign bribery. And in 2012, the company agreed to enter into a deferred-prosecution agreement, paying the SEC $7.4M over allegations of bribes paid to Mexico officials.