A securities class action has been filed against NAPCO Security Technologies, Inc. (NSSC) on behalf of purchasers of the securities of NAPCO between November 7, 2022 through August 18, 2023. The lawsuit seeks to recover damages for NAPCO investors under the federal securities laws. The complaint was filed in the E.D.N.Y.
According to the lawsuit, throughout the Class Period, defendants made materially false and/or misleading statements and/or failed to disclose that: (1) NAPCO failed to address any material weaknesses with internal controls regarding COGS and inventory; (2) NAPCO downplayed the severity of material weaknesses regarding their internal controls; (3) NAPCO’s unaudited financial statements from September 30, 2022 to the present included “certain errors” such as overstating inventory and understanding net COGS, resulting in overstated gross profit, operating income and net income for each period; (4) as a result, NAPCO would need to restate its previously filed unaudited financial statements for certain periods; and (5) as a result, Defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times. When the true details entered the market, the lawsuit claims that investors suffered damages.