Photo: Diego M. Radzinschi.

A Maryland biotechnology company that specializes in wound care has agreed to pay $1.5 million to settle allegations that it and four former executives violated securities law by misleading investors about revenue growth.

The U.S. Securities and Exchange Commission last week charged Osiris Therapeutics Inc. with several counts of accounting fraud. Also charged in federal court in Baltimore were former Osiris CEO Lode Debrabandere, CFOs Philip Jacoby Jr. and Gregory Law and chief business officer Bobby Montgomery.

According to the SEC, Columbia, Maryland-based Osiris and the ex-officials, from 2014-15, routinely overstated company performance and issued fraudulent financial statements. Specifically, the company and former executives improperly recognized revenue using artificially inflated prices, backdated documents to recognize revenue in earlier periods and used pricing data that they knew were false, among other accounting improprieties, the complaint alleges.

Osiris settled without admitting or denying the allegations.

Lawyers for Jacoby, Montgomery and Debrabandere did not immediately respond to emailed requests for comment. Law denied the allegations and said through his attorney Jacob Frenkel of Dickinson Wright that he “intends to contest fully all of the charges.”

“The commission turned a blind eye to mounds of exculpatory evidence to bring this case, and Greg has every reasonable expectation of full vindication and to restore his reputation,” Frenkel said in the statement, adding that his client cooperated early and fully with both the internal and government investigations.

Julie Lutz, director of the SEC's Denver regional office said in a statement that, “Osiris Therapeutics falsely portrayed to investors that its revenue was growing so rapidly that its performance was consistently exceeding expectations.” She added, “corporate cultures cannot be so fixated on higher revenues that they use illegal accounting gimmicks to meet the financial numbers they desire.”

In a statement, Peter Friedli, chairman of the board of Osiris, blamed the company's former management team for the activities that occurred.

“We have instituted broad remedial measures designed to detect and prevent the issues that led to the matter being resolved, and this resolution allows us to continue moving forward with the company's critical mission of making advances in the area of cellular and regenerative medicine,” according to the statement.

This case is not the first time in recent months that the feds have gone after a pharmaceutical biotech company and its former execs for misleading investors. Most notably, in February 2016, the SEC charged AVEO Pharmaceuticals Inc. and three of its former executives with fraud. Cambridge, Massachusetts-based AVEO agreed to pay $4 million to settle the allegations that the company and its ex-officials misled investors about their efforts to win U.S. Food and Drug Administration approval for the company's kidney cancer drug.