San Francisco, California–(Newsfile Corp. – April 20, 2020) – Hagens Berman urges CPI Aerostructures, Inc. (NYSE: CVU) investors who have suffered significant losses to submit their loss now. CPI has admitted to improper revenue recognition and the April 24, 2020 lead plaintiff deadline in a securities fraud class action is fast approaching.
CPI Aerostructures, Inc. (CVU) Securities Class Action:
The Complaint alleges that during the Class Period, Defendants concealed that: (1) CPI falsely applied generally accepted accounting principles and thus revenue, net income, retained earnings, and contract assets were overstated; (ii) as a result, CPI’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) CPI 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 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 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 maintained ineffective internal control over financial reporting for 2018. CPI further announced the resignation of recently appointed CFO Dan Azmon. On this news, CPI’s share price dropped nearly 30%.
Subsequently, on Mar. 16, 2020, CPI announced that, in light of its ongoing review of its revenue recognition procedures from customer contracts for 2018-2019, the Company would not be timely filing its Annual Report for the year ended December 31, 2019, placing CPI in jeopardy of being delisted.
“We’re focused on recovering investors’ losses and proving that CPI’s admitted accounting errors were intentional,” said Reed Kathrein, the Hagens Berman partner leading the investigation.
Whistleblowers: Persons with non-public information regarding CPI 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 CVU@hbsslaw.com.
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Reed Kathrein, 844-916-0895