RTI Surgical Holdings, Inc. (RTIX) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between March 7, 2016 and March 16, 2020, from 2016 to 2019, RTI Surgical Holdings, Inc. (RTIX) continuously attested to its accuracy of financial reporting, disclosure of any material changes to its internal controls over financial reporting, and disclosure of all fraud. Regarding its revenue recognition, in January 2018, RTI assured investors that its results after adopting the new amended accounting standards implemented by the Financial Accounting Standards Board in 2016 were “substantially consistent with the Company’s current revenue recognition policies” and RTI did not expect a material impact on its financial position when recognizing revenue from its current contracts with the new standard. Despite assurances, on March 16, 2020, RTI announced that it would be unable to timely file its Form 10-K for fiscal year 2019, citing an internal investigation of the Company’s revenue recognition practices by its Audit Committee. RTI disclosed that its internal investigation had been precipitated by an SEC investigation related to the periods 2014 through 2016. On this news, shares of RTI fell over 14% to close at $2.35. The stock continues to decline.