OSI Systems, Inc. (OSIS) Systems Accused of Obtaining Major Contract Through Bribery

According to the complaint, in August 2013, OSI announced that it had entered into a 15-year agreement – valued between $150 and $250 million – to provide turnkey cargo and vehicle security screening services in Albania.  OSI officials failed to disclose that OSI transferred 49% of its project company associated with the Albania contract—the entity to which all rights and obligations under the contract belong and therefore worth millions—to a holding company owned by an Albanian doctor for consideration of less than $5.00.

On December 6, 2017, Muddy Waters Research reported that OSI Systems, Inc. (OSIS) obtained the contract through corruption and accused OSI of engaging in improper sales and cash payments to government officials, making the company vulnerable to potential civil and criminal liability.  On February 1, 2018, OSI revealed that the U.S. Securities and Exchange Commission and the U.S. Attorney's Office for the Central District of California are investigating OSI's compliance with the Foreign Corrupt Practices Act and trading in OSI's securities. OSI's market capitalization has declined significantly since the Muddy Waters report was published—in November 2017, OSI had a market capitalization of $1.6 billion and it has since decreased to $1.264 billion as of April 12, 2018.

OSI Systems, Inc. (OSIS) Systems Shareholders Have Legal Options

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