Polished.com Inc. (POL) Misled Investors Regarding its Internal Controls
A shareholder filed a class action on behalf of all persons or entities who purchased or otherwise acquired publicly traded shares of Polished.com Inc. (NYSE: POL) securities (i) pursuant and/or traceable to the registration statement and prospectus issued in connection with the Company’s 2020 initial public offering (“IPO”), and/or (ii) between July 27, 2020 and August 15, 2022. The complaint seeks damages under the Securities Act of 1933 and Securities Exchange Act of 1934.
According to the complaint, Polished held its IPO on July 27, 2020, selling shares at $9.00 per share. During the class period, defendants failed to disclose the truth regarding its lack of internal control over financial reporting. Further, the Registration Statement in support of the IPO was false and/or misleading and/or failed to disclose that: (1) the Company would restate certain financials; (2) the Company’s internal controls were inadequate; (3) the Company downplayed and obfuscated its internal controls issues; (4) as a result, the Company would engage in an independent investigation; (5) as a result of the investigation, the Company would, among other things, retain independent counsel and consultants, and delay its quarterly filings in violation of NYSE requirements of listing; and (6) following the commencement of the investigation, the Company’s CEO and CFO would leave the Company.
On March 29, 2021, the Company announced that the previously issued financial statements for the year ended December 31, 2019, for the quarters ended June 30, 2020 and 2019 included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2020, and for the quarters ended September 30, 2020 and 2019 included in the Company’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020, should no longer be relied upon. The Company’s stock price fell $0.37 per share, or 4%, on this news.
On August 15, 2022, Polished notified investors that it would not timely file its “quarterly report on Form 10-Q for the period ended June 30, 2022 within the prescribed time period” because the Company required additional time to complete a newly announced investigation “regarding certain allegations made by former employees related to the Company’s business operations.” On this news, the Company’s stock price fell 35% to close at $0.97 per share on August 16, 2022.
Then, on August 25, 2022, the Company announced it received notice from the NYSE that it was no longer in compliance with NYSE American rules and had engaged “a leading strategic consulting firm with retail and ecommerce operations expertise to augment its existing management, identify opportunities to accelerate long-term profitable growth and, separately, to potentially expedite the Audit Committee of the Board of Directors’ ongoing investigation.” On this news, the Company’s stock fell 7% to close at $0.74 per share on August 26, 2022.
What Now: Shareholders who purchased shares of Polished.com Inc. (i) pursuant to the registration statement and prospectus issued in connection with the Company’s IPO, or (ii) between July 27, 2020 and August 15, 2022, must file their papers to be appointed lead plaintiff for the class by December 30, 2022. A lead plaintiff is a representative party acting on behalf of other class members in directing the litigation. You do not have to participate in the case to be eligible for a recovery.
All representation is on a contingency fee basis. Shareholders pay no fees or expenses.