Shares of Northwest Pipe (NWPX) are down almost 17% today, on news that a previously announced investigation into revenue recognition practices has turned into a "formal investigation" by the Securities and Exchange Commission. The company is also delaying the filing of its 10k while they sort out these issues.
In a highly inappropriate move, the company did NOT release this news in a wire service press release, which would show up in headlines on Yahoo Finance for instance. Nor is there even a mention of it in the investor relations section of the company's website.
The 8k released yesterday is the only place this is disclosed:
|Item 8.01.||OTHER MATTERS|
As previously disclosed, the Audit Committee of the Board of Directors of Northwest Pipe Company (the “Company”), with the assistance of independent professionals, is conducting an ongoing internal investigation of certain accounting matters, including certain revenue recognition practices. Pending the completion of the Audit Committee’s investigation, the Company is unable to complete the preparation of its Annual Report on Form 10-K for the year ended December 31, 2009 (the “Form 10-K”), including the consolidated financial statements required to be presented in the Form 10-K. The Company plans to file the Form 10-K as soon as practicable after the completion of the Audit Committee’s investigation, the completion of any additional accounting work required as a result of the Audit Committee’s investigation, the completion of the Company’s consolidated financial statements for the year ended December 31, 2009 and the completion of the audit of such consolidated financial statements by the Company’s independent registered public accountants. The Company does not expect that the Form 10-K will be filed before the fifteenth calendar day following its original due date as prescribed by Rule 12b-25.
The Company has been advised by the staff of the Securities and Exchange Commission (the “SEC”) that the SEC has commenced a formal investigation. The Company intends to cooperate fully with the SEC investigation.
The company's troubles starter back in November, when in addition to announcing project cancellations, they delayed filing their 10q due to revenue recognition problems.
VANCOUVER, WA, Nov 12, 2009 (MARKETWIRE via COMTEX) -- Northwest Pipe Company (NASDAQ: NWPX) today announced its preliminary estimates of financial results for the third quarter ended September 30, 2009. The Company also announced that it has delayed the filing of its Quarterly Report on Form 10-Q for the quarter ended September 30, 2009, pending the conclusion of an ongoing internal investigation of certain accounting matters, including certain revenue recognition practices, being conducted by the Audit Committee of the Board of Directors with the assistance of independent professionals. The Company plans to file its Quarterly Report on Form 10-Q for the quarter ended September 30, 2009 and publish final third quarter results as soon as practicable after the completion of the Audit Committee's investigation and the completion of the additional accounting work, if any, required as a result of the Audit Committee's investigation. Until that time the preliminary estimates of financial results presented in this press release are preliminary and subject to change.
From there, the ambulance-chasers of the securities industry attacked with their "automated lawsuit robo-blasters."
Of all these legal-eagles, the award for creativity goes to Coughlin Stoia Geller. They advertise on their website a special "Portfolio Monitoring Program," where for no additional cost (so generous!) they will track an investment fund's stock positions and keep an eye out for losses which could warrant a lawsuit. And then they'll sue, take 40% on a settlement, and go on their merry way.
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