The action brought on behalf of Osiris Therapeutics, Inc. (“Osiris”) alleged breach of fiduciary duty claims against certain officers and directors in connection with, among other things, their failure to adopt and implement adequate accounting and financial reporting systems and for allegedly causing the Company to make false and misleading statements regarding its financial condition. Specifically, the Company issued a restated 2014 Form 10-K and restated Forms 10-Q for the quarters ended March 31, 2015 and June 30, 2015, as the original financial reports were based on misleading accounting regarding distributor relationships. These restatements removed over $3 million of sales and shifted another $3.9 million in sales between the quarters. The restated financials showed the Company missing its sales targets for all three quarters. Hynes & Hernandez, LLC was part of the litigation team that negotiated a settlement conferring substantial benefits on Osiris.
The settlement included comprehensive reforms designed to enhance Osiris’s overall corporate governance practices, and specifically address management’s governance failures. These reforms included the adoption of a compensation claw-back policy, the adoption of a related-party transactions policy, enhancements to the Audit Committee of the Board’s oversight and compliance policies, annual review of the Corporate Governance Principles by the Board and other reforms designed to make Osiris’ officers and directors more effective and responsive fiduciaries. In sum, these reforms at both the Board and management levels left Osiris as a better governed company with stronger internal controls, enhanced communication and greater independent oversight, and made Osiris’ directors and officers more effective representatives of the stockholders.