SAN FRANCISCO, Feb. 24, 2020 /PRNewswire/ -- Hagens Berman urges CPI Aerostructures, Inc. (NYSE: CVU) investors who have suffered significant losses to submit their loss now to learn if they qualify to recover their investment losses. CPI has admitted to improper revenue recognition and a securities fraud class action has been filed.
CPI Aerostructures, Inc. (CVU) Securities Class Action:
The Complaint alleges that during the Class Period, Defendants concealed that: (1) CPI Aero falsely applied generally accepted accounting principles and thus revenue, net income, retained earnings, and contract assets were overstated; (ii) as a result, CPI Aero's financial statements and annual report for 2018 and first three quarters of 2019 could no longer be relied upon and required restatement; and (iii) the Company lacked adequate internal controls over financial reporting and effective disclosure controls and procedures during the class period.
The Complaint alleges that the truth began to emerge on Feb. 8, 2019, when CPI Aero disclosed that its Q3 2018 financial statements could no longer be relied upon due to an "error . . . in the Company's billing process," which inflated the Company's reported revenue and income before provision for income taxes, net income, and EPS.
The Complaint further alleges that on Feb. 14, 2020, CPI Aero announced that its financial statements for fiscal year 2018 and first three quarters of 2019 should no longer be relied upon due to errors relating to the Company's recognition of revenue from customer contracts. The Company also disclosed that, contrary to prior representations, CPI Aero maintained ineffective internal control over financial reporting for 2018. CPI Aero further announced the resignation of recently appointed CFO Dan Azmon.
On this news, the CPI share priced dropped nearly 30%.
"We're focused on recovering investors' losses and proving that CPI Aerostructure's admitted accounting errors were intentional," said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding CPI Aerostructures should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email mailto:[email protected].
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Reed Kathrein, 844-916-0895
SOURCE Hagens Berman Sobol Shapiro LLP