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SALT LAKE CITY — A Cedar City doctor says in a federal lawsuit that a state senator bought his stock in a medical devices company last fall knowing it would be worth much more when the business sold a few months later.
Dr. Russell G. Olsen claims Sen. Jerry Stevenson, R-Layton, intentionally withheld information to deceive him and maximize his own profits in the sale of OrthoPro, a Utah-based maker of medical products and surgical implements.
Stevenson said Tuesday that he has not been served with the complaint or spoken to an attorney. He said he bought OrthoPro stock over several years and owned a 15 percent interest in the business.
"I had no idea the company was going to sell when it did," he said.
Stevenson said Olsen contacted him wanting to sell his shares last fall.
According to the lawsuit, Olsen agreed over the phone on Oct. 13 to sell his 4 percent interest in OrthoPro, amounting to 97,600 shares of stock to Stevenson for $2 a share. Six days later, Stevenson's daughter brought a check for $195,200 and a contract to Olsen, which he signed.
On Feb. 5, Wright Medical Group bought OrthoPro for $32.5 million or about $14.22 a share, the lawsuit says.
Stevenson disputes the stock value, saying it was closer to $8 a share.
If Dr. Olsen had known that, through the Wright acquisition, his shares would have been worth over $14 a share in February 2014, he would not have sold them in October 2013 to Mr. Stevenson for $2 a share.
–Lawsuit papers filed by Dr. Olsen's attorney
As a managing member of OrthoPro, Stevenson was aware of the prospect of the acquisition at the time he bought Olsen's stock, according to the lawsuit. Stevenson did not disclose the possibility of the sale at the time, even though it had a significant impact on the stock value, the lawsuit claims.
"If Dr. Olsen had known that, through the Wright acquisition, his shares would have been worth over $14 a share in February 2014, he would not have sold them in October 2013 to Mr. Stevenson for $2 a share," according to the lawsuit.
The contract states Stevenson was "purchasing the (shares) with the hope and expectation that he will be able to resell them in the immediate or near future for a substantial profit."
Olsen claims he lost nearly $1.4 million in the deal.
The lawsuit filed Monday in U.S. District Court seeks an unspecified amount in general, consequential and punitive damages.
