Ra Medical Systems, Inc. (RMED) Reveals Code of Ethics Violations
On October 31, 2019, Ra Medical Systems, Inc. announced that it had substantially completed its internal investigation of allegations raised by an employee. As a result of the investigation, the Audit Committee discovered “certain behaviors inconsistent with the Company’s Code of Ethics and Conduct and related policies involving certain current and former executive officers and employees.” Among these behaviors included the instruction of Ra Medical’s salespeople to characterize its DABRA catheter as performing atherectomy, despite atherectomy not being part of DABRA’s clearance, and a lack of documentation to support certain payments to physicians, including $300,000 of payments that could be perceived as an improper attempt to obtain business or gain special advantage. Additionally, in October 2019, the Department of Justice provided Ra Medical with a Civil Investigative Demand seeking information with respect to a False Claims Act investigation concerning whether it fraudulently obtained 510(k) marketing clearance for DABRA. Due to the investigations, on November 18, 2019, Ra Medical filed a Notification of Late Filing with the SEC for its Form 10-Q.