Glancy Binkow & Goldberg LLP joined a host of other law firms investigating CannaVEST (OTCQB:CANV, Stock Forum), a Las Vegas-based firm engaged in developing, producing, marketing and selling hemp plant extract, Cannabidoil, to the nutriceutical industry, for possible violations of federal securities laws with respect to certain statements issued by the company concerning its financial performance when it was alleged to have overstated its sales by 17% for the quarter ending March 31, 2013 and then missed its goodwill at June 30, 2013 by more than 1300%. The company then announced on March 28,2014 that its previously released financial statements should no longer be relied upon. It seems the accounting department left its collective calculator at home.
Axesstel (OTCQB:AXST, Stock Forum), a San Diego California-based developer of fixed wireless voice and broadband access solutions for the global telecommunications market, continues to wade in hot water as Glancy Binkow & Goldberg LLP reminded purchasers of the company's securities between February 25, 2013 and March 31, 2014 that the deadline for lead plaintiff appointment arrives on June 23, 2014. It seems that Axesstel wasn't as transparent as it should have been as allegations arose that the company had made false and misleading statements or completely failed to disclose that Axesstel faced issues that negatively impacted the rollout of its new Home Alert product line followed by a laundry list of infractions including revenue recognition violations, revenue and financial result overstatements and failure to follow GAAP rules in its accounting practices. Rules, what rules, we have rules?
Bridgeport Education (NYSE:BPI, Stock Forum), a San Diego California-based provider of postsecondary education services, has been put into the spotlight by the Law Offices of Howard G. Smith and Block & Leviton LLP due to its announced failure to file its 10-Q for the quarter ending March 31, 2014. The reason for the delay was that the company began revising its accounting procedures and financial results as a response to receiving a comment letter from the SEC that stated the company's then current policies didn't make the cut. As a result of complying, the company's CFO, Daniel Devine, stated, “So that's the box you put it in.” I'm just kidding, what he really said was, “under the previous revenue recognition policy, revenues recognized subsequent to a student losing financial aid eligibility and not collected were included in our bad dept expense. Going forward, our policy will exclude these revenues, and will result in a corresponding decrease to our bad debt expense that will be realized over the subsequent three quarters.” The company quickly cautioned investors that further investigations into its books, might present the need to amend additional financial statements. Upon news of the accounting gaff, company market cap totals shed an approximate $85 million in the first few hours of trading and it continues to drop.
ON THE SCAM FRONT
Karatbars International, last known to be located in Stuttgart, Germany, was tagged in an investor alert by The Autorité des marchés financiers (“AMF”) as the regulatory body gave warning to Quebec residents regarding the company's shady pyramid-style Affiliates program. Now the BCSC has taken up the torch and is warning BC residents that Karatbars is not registered in BC to trade in, or advise on, securities or exchange contracts and that residents of the province should use extreme caution when dealing with companies of this ilk. And c'mon, who in their right mind would deal with a company called Karatbars, seriously.