GlobalSCAPE Accused of Overstating Its Financial Figures

According to a class action complaint filed against GlobalSCAPE (GSB), Global officials assured investors of the effectiveness of the company's internal control over financial reporting in Global's public filings. In reality, Global had overstated accounts receivable, revenues, total assets, and total stockholder equity by hundreds of thousands of dollars. On August 7, 2017, Global disclosed that its audit committee was investigating transactions in 4Q 2016 related to improper arrangements with customers that circumvented the company's internal controls and their potential effect on previously reported revenue. Global further stated that it intends to restate prior financial statements in an amended Form 10-K for the year ended December 31, 2016, and an amended Form 10-Q for the quarter ended March 31, 2017. On this news, Global's stock fell over 17% to close at $3.87 per share on August 8, 2017. Since then, Global's stock has fallen even further, closing at only $3.56 per share on December 12, 2017.