American Renal Associates Holdings, Inc. (ARA) Accused of Improper Accounting Practices

According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1934 between August 10, 2016 and March 27, 2019, American Renal Associates Holdings, Inc. (ARA) consistently asserted in SEC filings that its disclosures were accurate, but nevertheless failed to disclose to the investing public that there were issues with its accounting process and that it lacked adequate internal controls over financial reporting. The truth began to emerge on November 9, 2018 when American Renal disclosed in a 10Q that the SEC requested documents regarding revenue recognition, collections and related matters. On March 8, 2019, before the market opened, American Renal announced it would delay the filing of its earnings report for fiscal year 2018 to examine its accounting practices for 2018 and for previously reported years ranging from 2014 through 2017. On this news, American Renal’s shares fell over 16%. Less than a month later, American Renal announced the resignation of its CFO, and the need to restate its financial results for fiscal years 2014 through 2017. The investigation has yet to be finalized.  On this news, American Renal’s shares fell almost 40% to close at $6.01 on March 28, 2019.