#USA #San Francisco #RCI Hospitality #Tax Fraud #Eric Langan

RCI Hospitality Holdings, Inc. Faces Legal Trouble Amid Major Indictment

In a stunning turn of events, RCI Hospitality Holdings, Inc. (NASDAQ: RICK) is now mired in a legal battle following serious accusations from the New York Attorney General's office. The recent indictment of the company, its CEO Eric Langan, CFO Bradley Chhay, and other executives has sent shockwaves through the investment community, leading to a significant stock price drop and a class action lawsuit filed by disgruntled shareholders.

The class action, titled Hernandez v. RCI Hospitality Holdings, Inc., et al., has emerged in the wake of revelations that the company faced charges of conspiracy, bribery, and criminal tax fraud—totaling an alarming 79 counts. The indictment asserts that RCI's executives bribed state auditors to avoid paying over $8 million in sales taxes from 2010 to 2024. Such actions not only raise ethical questions but also potentially violate federal regulations intended to uphold financial transparency and accountability.

Hagens Berman, a national shareholder rights firm, is spearheading the lawsuit with the intention of representing investors who either purchased RCI securities between December 15, 2021, and September 16, 2025, or who have suffered significant financial losses due to misleading actions by the company. The firm is investigating whether RCI deliberately misled investors about its compliance with tax regulations and the adequacy of its internal financial controls.

On September 16, 2025, as news of the indictment broke, RCI's stock took a hit, plummeting nearly 16%. This drop is a clear indicator of the investor community's reaction to the gravity of the allegations against the company. According to partner Reed Kathrein from Hagens Berman, the focus is on assessing potential investor losses and determining whether RCI misled its shareholders about its legal standing and adherence to necessary requirements.

Furthermore, the allegations include claims that RCI ensured its financial statements conformed to accounting rules, while simultaneously failing to disclose the risks associated with their operations. Investors are particularly concerned about the potential ramifications this scandal could have on the future prosperity of RCI.

Whistleblowers with non-public information can contribute to the investigation or even benefit from the SEC Whistleblower program, which offers compensation for original information that aids in recovering losses for investors.

The in-depth analysis into RCI's practices raises important questions about corporate governance in the hospitality sector, particularly the adherence to local, state, and federal laws when it comes to lucrative business operations. The fallout from this case could set significant precedents regarding how companies manage compliance and interact with governmental entities.

As the situation evolves, shareholders and investors are urged to stay informed and proactive in seeking resolution for their losses. Interested parties with further knowledge of RCI’s dealings are encouraged to contact Hagens Berman directly to assist in the ongoing investigation.

The implications of this case extend beyond RCI, highlighting potential vulnerabilities in corporate oversight within the hospitality sector and reminding investors of the critical importance of transparency. Moving forward, the resolution of this lawsuit will seek to ensure accountability and bolster confidence amongst stakeholders.

For victims of this potential fraud, being informed is key, and taking collective action against corporate misconduct can pave the way for a more equitable investment landscape in the future.