Sunlight Financial Holdings Inc. (SUNL) Lacked Effective Internal Controls Over Accounting and Reporting of Non-Cash Advance Receivables
A shareholder filed filed a class action on behalf of all investors who purchased or otherwise acquired Sunlight Financial Holdings Inc. (NYSE: SUNL) securities between January 25, 2021 and September 28, 2022, for violations of the Securities Exchange Act of 1934. Sunlight claims to be a business-to-business-to-consumer point-of-sale (“POS”) financial platform that provides residential solar and home improvement contractors the ability to offer seamless POS financing to their customers.
According to the complaint, Sunlight became a publicly traded company in July 2021 via business combination with Spartan Acquisition Corp. II. On September 28, 2022, Sunlight disclosed that it would record a “non-cash advance receivables impairment charge of $30 million to $33 million during the Company’s fiscal quarter ending September 30, 2022.” The same day, the Company issued a press release withdrawing its full-year 2022 outlook as a result. On this news, the Company’s stock price fell $1.44 per share, or over 57%, to close at $1.08 per share on September 29, 2022.
During the class period, defendants failed to disclose that the Company lacked: (1) effective underwriting and risk evaluation with respect to its contractor advance program; (2) the oversight and periodic monitoring systems necessary to timely detect bad debt associated with its contractor advance program; and (3) effective internal controls over accounting and reporting of non-cash advance receivables.
What Now: Similarly situated shareholders may be eligible to participate in the class action against Sunlight Financial Holdings Inc. Shareholders who want to act as lead plaintiff for the class must file their papers by February 14, 2023. 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.