Whitestone REIT (WSR) Accused of Misleading Investors
According to the complaint against Whitestone REIT (NYSE: WSR) for alleged violations of the Securities Exchange Act of 1934 between May 9, 2018 and February 27, 2019, Whitestone attested to the accuracy of its financial statements, effectiveness of internal controls, and the disclosure of all fraud. However, the truth was revealed in February 2019 when Whitestone announced that its 2018 financial results for the periods ending March 31, June 30, and September 30 could no longer be relied upon and would be restated. Specifically, Whitestone cited certain accounting errors relating to nonfinancial assets. On this news, over the course of two trading days, Whitestone’s price per common share of beneficial interest declined from a close of $14.25 on February 27, 2019, to a close of $13.01 on February 28, 2019. The next day, the stock continued to plummet, to close at $12.18 on March 1, 2019, an overall drop of over 14 percent. The stock has yet to recover.