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MiMedx Group, Inc. Message Board

  • norgenheimer norgenheimer Mar 29, 2014 2:18 PM Flag

    SEC and MDXG

    January 2012 Case Involving Polygraph Test. The second case, brought against Earl Arrowood and Parker H. "Pete" Petit in federal court in Georgia, seems fairly straightforward. The Commission alleges that Mr. Arrowood received material non-public information about the potential sale of Matria Healthcare, Inc. ("Matria") (formerly a NASDAQ-listed company) from his friend Mr. Petit, who was, at the time, the Chairman and CEO of Matria.

    The unique twist in this case is detailed in the article in the Atlanta Business Chronicle, which states:

    Aaron Danzig, Petit’s attorney with Arnall Golden Gregory, said Petit has passed a polygraph test about the allegations.

    "We gave the SEC results of the expert’s polygraph test as specific evidence that Mr. Petit was truthful in stating he did not provide inside information, and that the SEC’s claims are groundless," said [Mr. Danzig].

    Danzig said the SEC asked Petit to submit to a second polygraph test that it would conduct. Petit agreed on the condition the SEC decline any enforcement action after he passed the second test. The SEC then sued Petit.

    Bruce Carton’s Compliance Week Enforcement Action Blog examines the case and, in particular, Mr. Danzig’s assertion:

    I am not surprised that from time-to-time, potential SEC defendants might offer to sit for polygraph tests. I just had no idea that the SEC ever took people up on such offers or actually conducted/supervised such tests. Can any SEC enforcement alumni or current SEC employees shed any light on this? Is taking an SEC-administered polygraph test actually on the menu of options for potential SEC defendants?

    The SEC did not comment on the polygraph issue in its Litigation Release.

    Sentiment: Buy

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