Overview
Cohen Milstein, as Lead Counsel, represents Southeastern Pennsylvania Transportation Authority (SEPTA), who brings securities fraud claims on behalf of all investors who purchased or acquired shares of Orthofix common stock between October 11, 2022 and September 12, 2023, inclusive in this securities fraud class action against Orthofix Medical Inc. and SeaSpine Holdings Corporation and certain of their senior executives
The plaintiffs also bring non-fraud claims sounding in negligence and strict liability on behalf of all former SeaSpine shareholders who acquired newly issued Orthofix common stock pursuant to certain offering documents issued in connection with the January 2023 stock-for-stock merger transaction between Orthofix and SeaSpine.
Investors claim that throughout the class period, beginning with the companies’ announcement of their merger agreement, the defendants made material false and misleading statements and/or failed to disclose adverse facts relating to the extent of discrimination and misconduct that had been occurring at SeSpine for years and the role that certain SeaSpine executives—who took on roles as CEO, CFO, and CLO at the post-Merger company—played in fostering a hostile and misogynistic workplace. On September 12, 2023, after the market learned that Orthofix had terminated the executives for cause for harassing and inappropriate conduct and statements, the stock plummeted by 30%.
Important Rulings
- On March 9, 2026, the court denied in part the defendants’ motions to dismiss, allowing the case to move forward under plaintiffs’ Securities Act claims based on certain statements contained in Orthofix and SeaSpine’s merger agreement, which the companies had incorporated into SEC filings. With respect to those same statements, the court also granted plaintiffs leave to file an amended complaint on the issue of loss causation, an element of Lead Plaintiff’s Exchange Act claims that the court had dismissed without prejudice. Plaintiffs filed a second amended complaint on April 8, 2026 that contained additional factual allegations supporting a finding of loss causation.
- On January 3, 2025, the court appointed Cohen Milstein sole lead counsel and SEPTA lead plaintiff in this securities class action.
Case Background
Orthofix is a global spine and orthopedics company that offers biologics, spinal hardware, bone growth therapies, and specialized orthopedic solutions, among other things, to healthcare professionals throughout the world.
On October 11, 2022, Orthofix and SeaSpine—a California-based global medical technology company focused on surgical solutions for the treatment of spinal disorders—announced that they had entered into a definitive merger agreement to combine in an all-stock merger of equals.
On January 4, 2023, Orthofix and SeaSpine announced the successful completion of the Merger, which became effective as of 12:01 AM EST on January 5, 2023. To effectuate the merger, Orthofix solicited and exchanged 16 million new shares of Orthofix common stock directly to former shareholders of SeaSpine.
Plaintiffs claim that beginning on the day that the merger agreement was announced, defendants made statements to investors that were knowingly or recklessly false and/or failed to disclose adverse facts relating to the extent of discrimination and misconduct that had been occurring at SeaSpine for years and the role that SeaSpine’s executives played in fostering such a hostile and misogynistic workplace—information that would have been readily available to Orthofix during the due diligence process, especially when Orthofix was purportedly vetting these very same executives to lead Orthofix post-merger.
Plaintiffs also claim that, separately, the merger offering documents contained false or misleading statements of material fact and omitted material facts, both required by governing regulations, necessary to make the statements made not misleading.
In truth, defendants concealed from investors the risk that SeaSpine’s executives posed to the post-Merger company. SeaSpine had a long-standing history of workplace discrimination and other forms of misconduct that belied defendants’ representations during the class period and in the offering documents. For years, SeaSpine’s CEO, CFO, and General Counsel engendered a “good old boys’ club” culture at SeaSpine where female employees were the targets of harassment, were paid less for equal work, and were silenced—and sometimes fired—when they tried to raise concerns.
All this information would have been readily available to Orthofix during due diligence, had it put in the effort to investigate.
When SeaSpine’s executives took over the leadership of Orthofix following the merger, they carried with them their problematic management style. Eventually, Orthofix’s Board of Directors could not turn a blind eye. On September 12, 2023, Orthofix publicly disclosed that it had terminated “for cause” the its three executives who came from SeaSpine: Keith Valentine (CEO), John Bostjancic (CFO), and Patrick Keran (CLO). The press release explained that the terminations were based on a unanimous decision by the Board’s independent directors following an internal investigation led by outside counsel, which revealed that each executive “engaged in repeated and offensive conduct that violated multiple code of conduct requirements.” Chair of the Orthofix Board Catherine Burzik indicated in the press release that the three executives’ behavior included “harassing [and] inappropriate conduct [and] statements.”
When the “for cause” terminations were disclosed to the market on September 12, 2023, the price of Orthofix common stock plummeted by more than 30% on unusually high trading volume, wiping out $206.5 million of market capitalization.