A securities class action has been filed against Schmitt Industries, Inc. (SMIT) on behalf of all persons and entities who purchased or otherwise acquired Schmitt securities between September 1, 2020 through September 20, 2022. This case has been filed in the USDC – OR.
On September 20, 2022, after the market closed, Schmitt announced that its previous financial statements “should no longer be relied upon” and would require restating, estimating that “the errors were cumulatively material, resulting in an understatement of $330,203 in expenses for the first three quarters of the fiscal year.
On this news, Schmitt stock fell $0.68, or 17.9%, to close at $3.12 per share on September 21, 2022, hurting investors.
According to the lawsuit, defendants throughout the Class Period made false and/or misleading statements and/or failed to disclose that: (1) Schmitt Industries continuously downplayed its serious issues with internal controls; (2) Schmitt Industries’ financial statements from August 31, 2021, to the present included “certain errors”; (3) as a result, Schmitt Industries would need to restate its previously filed financial statements for certain periods; and (4) 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.