Schmitt Industries, Inc. (SMIT) Had Deficient Internal Controls Over Financial Reporting
A shareholder filed a class action on behalf of all persons who acquired shares of Schmitt Industries, Inc. (NASDAQ: SMIT) securities between September 1, 2020 and September 20, 2022, for violations of the Securities Exchange Act of 1934.
According to the complaint, defendants failed to disclose that: (1) Schmitt continuously downplayed its serious issues with internal controls; (2) Schmitt’s financial statements from August 31, 2021 to the present included “certain errors”; and (3) as a result, Schmitt would have to restate its previously filed financial statements for certain periods.
On September 20, 2022, Schmitt announced it would restate its financial statements from August 31, 2021 to the present, and expected to report at least one material weakness. Further, the Company’s financial statements from August 31, 2021 through February 28, 2022, should no longer be relied upon due to errors in the treatment of certain general and administrative expenses that were excluded from the statement of operations. On this news, Schmitt’s stock fell 17% to close at $3.12 per share on September 21, 2022.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Schmitt. Shareholders who want to be appointed lead plaintiff for the class must file their papers by December 12, 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.