According to the SEC: "Osiris is a biotechnology company that researches, develops and markets products for orthopedics, sports medicine, and wound care. During all four quarters of 2014 and the first three quarters of 2015, Osiris and its former senior officers engaged in a wide-ranging fraud to artificially inflate the company's reported revenue. In addition to directing the misstatement of Osiris' financial results, the company's former senior officers engaged in numerous other fraudulent and deceptive acts, including entering into undisclosed side agreements with distributors, recognizing revenue in direct contradiction to their disclosed accounting policies, lying to Osiris' independent registered public accounting firm ("Auditor"), using false pricing data, and backdating and falsifying documents. The misstatements and scheme were carried out by former officers of Osiris, including Jacoby who served as Osiris' chief financial officer and, subsequently, vice president of finance and principal accounting officer; Law who served as Osiris' vice president of finance and principal accounting officer and, subsequently, chief financial officer; Debrabandere who served as Osiris' chief executive officer; and Montgomery, who served as Osiris' general manager of orthopedics and sports medicine and, subsequently, its chief business officer."

In a litigation release published on November 3, 2017, the SEC stated that "Osiris Therapeutics routinely overstated company performance and issued fraudulent financial statements for a period of nearly two years. According to the SEC's complaint, the company improperly recognized revenue using artificially inflated prices, backdated documents to recognize revenue in earlier periods, and prematurely recognized revenue upon delivery of products to be held on consignment. Osiris Therapeutics and its executives also allegedly used pricing data that they knew was false and attempted to book revenue on a fictitious transaction, among other accounting improprieties."

On November 7, 2017, a federal district judge entered final judgment against Osiris Therapeutics, Inc. pursuant to the consent of Osiris Therapeutics, Inc.

The SEC stated: "On October 8, 2019, the U.S. District Court for the District of Maryland entered a final judgment against Bobby Dwayne Montgomery, a former executive of biotech company Osiris Therapeutics, Inc. for his role in Osiris's fraudulent conduct. . . . Osiris previously settled the SEC's charges and paid a $1.5 million penalty."