Investor Sues After GlobalSCAPE Forced to Restate 2016 Financial Results

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GlobalSCAPE, Inc. and two of the company’s top executives are facing a securities lawsuit filed on behalf of shareholders who purchased GlobalSCAPE common stock between January 26, 2017 and August 7, 2017. The suit is centered around the defendants’ allegedly misleading statements regarding the company’s 2016 fourth quarter financial results, which, on August 7, 2017, the company announced would be restated.

According to the suit, Global admitted that it was “conducting an investigation into certain transactions in the fourth quarter of 2016 involving improper arrangements with customers that circumvented the Company’s internal controls and their potential effect on previously reported revenue.” More specifically, the defendants informed the public that they had overstated their accounts receivable, license revenue, current assets, total assets, total stockholder equity, and total liability for the end of 2016, indirectly admitting that their internal controls over financial reporting were lacking, the suit says.

Upon the release of this news, GlobalSCAPE stock prices fell 17.66 percent, according to the complaint, causing investors “millions in losses.”