Pomerantz Law Firm Probes Securities Fraud Claims Against Movado Group, Inc.

Recent Investigation into Movado Group, Inc.

In recent developments, the Pomerantz Law Firm has initiated an investigation into claims regarding Movado Group, Inc. (NYSE: MOV). This inquiry is directed toward the allegations that certain actions by the company’s officers and directors may constitute securities fraud or other illicit business practices. As part of its efforts, the firm is urging those affected or having pertinent information to come forward and speak to representatives for further details.

On April 11, 2025, Movado Group disclosed important information to the U.S. Securities and Exchange Commission (SEC). The company reported that they became aware of allegations concerning misconduct within their Dubai branch, associated with the Swiss subsidiary, MGI Luxury Group Sárl. Allegations include significant concerns regarding transactions in the Middle East, India, and the Asia-Pacific region, collectively termed the "Affected Region."

As part of the investigation, Movado found that the former managing director of the Dubai branch, along with certain employees, were involved in wrongful actions leading to inflated sales figures and the inappropriate recognition of sales. Moreover, they underreported credits owed to customers during a span of roughly five years, stretching back to the fiscal year ending January 31, 2021. This improper behavior involved using a third-party warehouse without the knowledge of company management to facilitate these premature sales recognitions, alongside falsifying documents to bypass internal controls.

As an outcome, Movado's management has acknowledged a serious lapse in their financial controls, pinpointing a "material weakness" in their internal control processes over financial reporting. This specific failure stemmed from an inadequate risk assessment that didn’t sufficiently address the absence of functional segregation of duties at their Dubai facility. Given these findings, the company has decided to terminate the former managing director.

Consequently, Movado publicly acknowledged the need to restate its financial results for the fiscal years ending January 31, 2022, 2023, and 2024, alongside interim periods across the subsequent fiscal years. This revision is paramount to accurately reflect sales recognized and credits issued throughout the problematic time frame. The revised interim financial statements will also reveal a decrease in operating expenses due to the reversal of specific accruals which stemmed from the newly adjusted operational outcomes.

The public disclosure resulted in Movado's stock price taking a hit, experiencing a decline of $0.25 or about 1.81%, with shares closing at $13.56 each on the day these allegations surfaced.

Pomerantz Law Firm, renowned for its exceptional work in the realm of corporate, securities, and antitrust class action litigation, aims to uphold the rights of investors who may have fallen victim to fraud. Established over 80 years ago by Abraham L. Pomerantz, the firm has been at the forefront of securities class actions, striving to recover compensations for shareholders affected by corporate malfeasance.

The significance of this investigation is underscored by Movado’s historical context and its pivotal role in the luxury watch sector. With the potential for substantial repercussions, both financially and reputationally, the outcome of this inquiry could have transformative implications for the company moving forward. Investors and stakeholders remain vigilant, anticipating how both legal proceedings and corporate governance adjustments will unfold in response to these allegations.

This unfolding story is one of caution for investors, highlighting the potential pitfalls associated with corporate oversight and the critical importance of stringent internal controls within all sectors to prevent misconduct and maintain integrity in financial reporting.