Wright Medical Group Inc., the artificial-joint maker that last year settled U.S. accusations it paid doctors to use its products, fell the most in more than two years after its chief executive officer resigned.
Wright fell $2.08, or 12 percent, to $15.05 at 4 p.m. in Nasdaq Stock Market composite trading, for its biggest one-day decline since March 2, 2009. The shares have fallen 15 percent in the past 12 months.
Gary D. Henley, CEO since 2006, resigned yesterday before a board meeting called to discuss management’s oversight of the company’s “ongoing compliance program,” Arlington, Tennessee-based Wright said in a statement today. David D. Stevens, the board chairman, has been appointed interim CEO until a replacement can be found, the company said.
Wright said Sept. 30 that it would pay $7.9 million to resolve criminal and civil investigations into whether it paid kickbacks to induce doctors to use its hip and knee devices. Prosecutors in Newark, New Jersey, agreed to drop the case in 12 months if a monitor agrees that Wright has reformed the way it hires consultants.
“Wright Medical is committed to maintaining the highest standards of ethical conduct and to complying strictly with the laws and regulations that govern our business practices,” Stevens said in the statement. “These leadership changes underscore that Wright Medical is committed to compliance at all levels of the organization and to exemplary corporate citizenship.”
The company said it had also fired Frank S. Bono, Wright’s senior vice-president and chief technology officer, “for failing to exhibit appropriate regard for the company’s ongoing compliance program.” Henley has also resigned his position on the board of directors.
A spokesman, Nicholas Lamplough, declined to discuss the moves further in a telephone interview.