Skip to Content

Accounting Manipulation

U.S. companies, and certain foreign companies, that file periodic reports with the Securities and Exchange Commission (“SEC”) are obligated to prepare and publish their financial statements in accordance with Generally Accepted Accounting Principles, or “GAAP.”

If a company purports to publish its financial statements in conformity with GAAP, but fails to follow GAAP rules or principles, that may give rise to a claim of securities fraud under the U.S. securities laws.

For example, companies sometimes publishing false and inflated revenue because a company’s success so often depends on its revenue growth. GAAP requires that revenue only be recognized when collectability of funds is reasonably assured. This common sense rule prevents companies from claiming to have earned revenue when there is significant doubt whether the company will ever be paid. In other words, it prevents companies from recognizing speculative or merely anticipated income prematurely. Improper revenue recognition is typically revealed to the market when a company announces that it will revise previously issued financial reports to correct the improper recognition. Such disclosures may cause a company’s stock price to plummet, injuring investors that purchased shares during the periods the company was publishing false revenue figures, and giving rise to a claim for securities fraud.

For cases based on improper accounting, a skilled securities lawyer is necessary, since effective prosecution requires not only an understanding of the applicable securities laws, but also the financial acuity necessary to understand GAAP and identify the ways in which the Company violated GAAP rules.

The securities class action lawyers at GPM have a demonstrated that they possess the skill and experience necessary to prosecute such actions. If you believe a company has engaged in improper revenue recognition, or any other form of accounting manipulation, please contact GPM.

Securities

Get In Touch

Disclaimer: By providing my phone number to Glancy Prongay & Murray LLP, I agree and acknowledge that Glancy Prongay & Murray LLP may send text messages to my wireless phone number for any purpose. Message and data rates may apply. Message frequency will vary, and you will be able to Opt-out by replying “STOP.” For more information on how your data will be handled please visit https://www.glancylaw.com/privacy-policy/.

New Cases & Investigations
—

If you would like to learn more or become a part of any of our cases

Join Case Now

Court Recognition

“And without question, the Court is of the opinion that the value of benefit that’s been conferred to the class is extremely sizable and that this Court is certainly aware that the skill and efficiency of plaintiff’s counsel is what attributed to this settlement, and they are learned securities counsel. The Court is mindful of that, and as a result they were able to sort of weed their way through the complex issues in this case, and also to bring this about — bring about a settlement rather in short order as these matters go. So the Court certainly attributes that to counsel’s skill and efficiency, as well as the ability to work with the adversaries in this matter.”

–Hon. Susan D. Wigention, U.S. District Judge, District of New Jersey

“Class Counsel has conducted the litigation and achieved the Settlement in good faith and with skill, perseverance and diligent advocacy”

— Hon. Donovan W. Frank, U.S. District Judge, District of Minnesota

“The court finds that the Settlement Fund… created by Class Counsel is an exceptional result… The settlement is significantly above the average securities class action settlement when measured as a percentage of losses recovered… The court finds that Class Counsel, particularly Co-Lead Counsel, exerted tremendous effort on behalf of the class in the prosecution of this action… The Court finds that Class Counsel skillfully prosecuted this action, particularly given that this case was unusually complex relative to most securities fraud class actions. ”

–Hon. Dickran M. Tevrizian (Ret.), U.S. District Court Judge, Central District of California

More Testimonials