ArthroCare Corporation Dogged by Legal Woes

Austin Business Journal by Christopher Calnan, Staff Writer

Four years after an accounting scandal, medical device maker ArthroCare Corp. remains mired in legal battles despite healthy operating margins and market share. The relentless federal investigations and private litigation have kept profits out of reach — and it’s likely holding the company back from being acquired, analysts said.

The Austin-based company is being investigated by the U.S. Department of Justice for activities that include past sales, accounting and billing procedures related to the operation of its spine product sales. The DOJ is also reviewing ArthroCare’s (Nasdaq: ARTC) relationship with its DiscoCare Inc. division, according to filings with the U.S.