CPI Aerostructures, Inc. (CVU) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between May 15, 2018 and February 14, 2020, on November 13 2018, CPI Aerostructures, Inc. (CVU) filed its Form 10-Q for 3Q 2018, touting net income of $1,328,153 and revenue of $19,944,558 and attesting to the Company’s accuracy of financial reporting. Contrary to these assurances, on February 8, 2019, CPI reported to the SEC that its 3Q 2018 10-Q should no longer be relied upon, disclosing that its revenue was overstated by $900,000 to $950,000, and net income was overstated by $725,000 to $775,000 due to the Company’s material weakness in its internal control over financial reporting. Then, in CPI’s following SEC filings from April 1, 2019 to November 8, 2019, the Company once again attested to its accuracy of financial reporting and effective disclosure controls. However, on February 14, 2020, CPI released a press release stating that its financial statements for the fiscal year 2018 and year to date 2019 could no longer be relied upon, again citing a material weakness in the Company’s control over financial reporting. On this news, CPI’s stock fell 27% to close at $4.87 per share. The stock continues to decline.
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