Red flag for Jackson Hewitt investors
Thank goodness tax time is over. But the last two weeks have been a difficult time for investors and customers of Jackson Hewitt Tax Service (NYSE: JTX, BullBoards). On April 3, JTX stock plummeted 18% after it was disclosed that the US Department of Justice sued the operators of more than 125 Jackson Hewitt tax preparation offices accusing them of cheating the Treasury of more than $70 million through a "pervasive and massive series of tax-fraud schemes."
So, if you have just filed your taxes and indicated that Jackson Hewitt prepared your return, don't be surprised if the IRS takes a few extra minutes when they review your return.
Of course, it is JTX investors who are most affected, in particular those who purchased JTX shares between January 4, 2006 and April 3, 2007.
Houston-based Powell Industries (NASDAQ: POWL, BullBoards), a manufacturer of equipment to track and control electricity flow announced on April 13 after the close of trading that it plans to restate financial statements and its assessment of internal controls. The company explained that accounting errors were discovered in the course of a review of financial results by a new division controller.
Investors in payment processing company Electronic Clearing House, Inc. (NASDAQ: ECHO, BullBoards) have been stunned by recent developments. On March 27, the price of ECHO dropped more than one third after the company and financial software maker Intuit (NASDAQ: INTU, BullBoards) announced they were mutually terminating a $142 million merger agreement they had entered into in December. The company also disclosed that it had been cooperating as a witness in a federal investigation of Internet wallet providers, which provide services to online gaming participants. The company agreed to disgorge $2.3 million of its profit from processing and collection services for its Internet wallet customers since 2001. It appears that investors who purchased ECHO between December 14, 2006 and March 26, 2007 are affected.
Mark McNair is an attorney in private practice who represents investors in securities litigation and was formerly an attorney at the Securities and Exchange Commission. For additional information, go to securitiessleuth.com
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