#United States #New Orleans #Kahn Swick #Charles Foti #NAPCO Security

Investigation of NAPCO Security Technologies

In recent developments that have raised alarms among investors, former Louisiana Attorney General Charles C. Foti, Jr. and his law firm Kahn Swick & Foti, LLC (KSF) are spearheading an investigation into NAPCO Security Technologies, Inc. (NASDAQ: NSSC). This investigation comes on the heels of troubling financial disclosures made by the company regarding significant deficiencies in its internal controls around financial reporting.

Background on NAPCO's Financial Issues

In an announcement from August 18, 2023, NAPCO disclosed the presence of a material weakness in its internal financial controls. This failure left the company unable to adequately manage its disclosures for the first three quarters of the fiscal year. Notably, NAPCO identified errors in calculating its cost of goods sold (COGS) and inventory figures for these quarters, which led to significant misrepresentations in its financial standing. Consequently, investors learned that NAPCO had overstated its gross profit, operating income, and net income due to these inaccuracies.

The severity of these financial misstatements was further confirmed on September 1, 2023, when NAPCO filed amended quarterly reports revealing that net income had been inflated by an astonishing 114.97%. Other metrics similarly showed alarming overstatements: income per share was exaggerated by 112.5%, operating income by 118.02%, and gross profit by as much as 35.59%.

Ongoing Legal Developments

Due to these revelations, NAPCO has faced a securities class action lawsuit, accused of failing to disclose crucial information and violating federal securities laws. A recent court ruling has allowed the case to progress, denying NAPCO's motion to dismiss. This unfolding legal landscape demonstrates the potential ramifications for the company and its management.

KSF's Focus on Accountability

As KSF's investigation unfolds, the legal team is diligently examining whether NAPCO’s officers or directors violated their fiduciary responsibilities towards shareholders. The investigation aims to determine if the executives acted in good faith or if their actions warrant legal repercussions under state or federal law.

Foti has urged any individuals with relevant information or those who have held NAPCO shares for a significant duration to reach out to KSF. The firm offers to discuss potential legal rights entailed in this situation without any financial obligation to the parties involved.

About Kahn Swick & Foti, LLC

Kahn Swick & Foti, LLC is recognized as a leading law firm specializing in securities litigation in the United States. With the guidance of Charles C. Foti, Jr., a former Louisiana Attorney General, KSF has secured notable positions among the nation’s top law firms based on settlement values. The firm serves a diverse range of clients, from public investors to institutional investors, striving to recover losses incurred due to corporate misconduct.

With offices located in various states including New York, California, and Louisiana, as well as a presence in Luxembourg, KSF remains committed to advocating for shareholders and ensuring corporate accountability.

Global markets will be keenly observing the developments surrounding NAPCO Security Technologies as this investigation could have significant implications for its financial health and reputation in the industry. Interested parties can visit KSF’s website for further information and updates regarding the case and their ongoing legal efforts.