ArthroCare Execs Arrested Over $400M Stock Drop

Law360, Dallas (August 22, 2012, 8:12 PM EDT) -- Two former executives of surgical instrument maker ArthroCare Corp. were arrested Wednesday on charges that they ran a scheme to inflate company earnings by tens of millions of dollars and hid sales terms and commission payment information, leading to a $400 million loss for investors.

According to a 16-count indictment unsealed Wednesday, John Raffle and David Applegate ran the scheme for about three years, paying distributors commissions at the end of each quarter to take on extra medical supply product so the company could meet sales...
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