Aceto Corporation

Aceto Corporation (ACET) Accused of Overstating Its Financial Guidance  

According to the complaint, Aceto Corporation (ACET) assured investors that the company’s internal control over financial reporting was effective. In reality, Aceto failed to implement proper internal control to identify the misapplication of cash. Aceto began to reveal its troubles on November 3, 2017, when it disclosed that the company’s system of internal control failed to generate a report to assure that the aging of trade receivables was accurate.  Aceto’s problems became more apparent on February 1, 2018, when the company revealed a net loss of $13.9 million, compared to a net loss of $0.6 million in the previous year’s comparable quarter.  Aceto finally announced on April 18, 2018, that its 2018 fiscal year earnings guidance should no longer be relied upon and that it anticipates recording non-cash intangible asset impairment charges in the range of $230 million to $260 million.  On this news, Aceto’s stock plummeted over 64% to close at $2.66 per share on April 19, 2018.

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