Dentsply Sirona Stock Climbs as SEC Ends Probe Without Action
The dental supply firm's shares rose after the regulator concluded a multi-year investigation into its accounting and financial reporting practices, removing a key overhang for investors.
Shares of Dentsply Sirona (NASDAQ: XRAY) gained ground after the company announced that the U.S. Securities and Exchange Commission (SEC) has concluded its investigation and does not intend to recommend any enforcement action. The news provides a resolution to a period of uncertainty that has shadowed the dental and consumable products manufacturer for more than two years, removing a significant legal and financial overhang.
The investigation, which , centered on the company's financial reporting and accounting practices. Specifically, the probe examined the use of incentives to sell products to distributors in late 2021 and whether their impact on sales was appropriately disclosed in the company's SEC filings. The inquiry also delved into whether certain members of senior management used these incentive programs to meet executive compensation targets.
The SEC's decision to close the case follows a turbulent period for Dentsply Sirona, which conducted its own internal investigation into the matter. The company's internal review, conducted by its Audit and Finance Committee with the help of outside counsel, led to significant leadership changes, including the dismissal of its CEO and the resignation of its CFO in the spring of 2022. The internal probe ultimately concluded that the company’s financial statements for the third quarter and full fiscal year of 2021 , prompting financial restatements.
Investors reacted favorably to the news, signaling relief that the company can move forward without the threat of federal enforcement action. The allows Dentsply Sirona, with a market capitalization of approximately $2.44 billion, to refocus on its core business operations and strategic growth initiatives. The resolution marks a critical step for the company as it works to restore investor confidence and stabilize its market position.