BOSTON, Jan. 11, 2016 /PRNewswire/ -- GW Pharmaceuticals plc ("GW Pharma" or the "Company") (NASDAQ: GWPH) has dropped precipitously in early trading. It was down as much as 10% after a Sunday Times report referred to weakness in the Company's accounting practices. GW Pharma had stated in its annual report that it "had a material weakness in our internal control over financial reporting for the year ended September 30, 2015."
The Company further stated that its:
management identified a material weakness and concluded that our internal controls over financial reporting were not effective as of September 30, 2015. … Our management determined that our control over the completeness and valuation of clinical trial accruals is not effective. Specifically, management does not have sufficiently precise controls to evaluate the completeness and accuracy of the calculation of clinical trial accruals due to the incorrect allocation of expenditure to clinical studies. Additionally, we have not established a sufficiently precise control to ensure completeness of clinical trial accruals in connection with contractual progress payment liabilities. A material weakness results in a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. In the event that the material weakness described above led to our financial statements not being prepared properly (which we currently do not believe to be the case), we would be required to restate our financial statements, which could result in a loss of investor confidence and a decline in the price of our ADSs.
Based on the recent announcements, Block & Leviton LLP (www.blockesq.com), a securities litigation firm representing investors nationwide, is investigating whether the Company and its officers and directors may have violated federal securities laws.
If you purchased or otherwise acquired GW Pharma ADRs on or before January 11, 2015, and have questions about your legal rights or possess information relevant to this investigation, please contact either attorney Steven Harte at (617) 398-5600 or email him at Steven@blockesq.com. Confidentiality to whistleblowers or others with relevant information is assured.
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