Napco Security Technologies, Inc. (NSSC) Securities Fraud Class Action

The complaint alleges that Defendants made false and misleading statements and failed to disclose Napco: (1) had not addressed material weaknesses in internal controls over its financial reporting of its cost of goods sold (“COGS”) and inventory; (2) downplayed the severity of material weaknesses regarding its internal controls; (3) overstated inventory and understated COGS from Sept. 30, 2022 to the present; and (4) would need to restate certain of its previously filed unaudited financial statements.

The truth emerged on Aug. 18, 2023, when the company announced that investors should no longer rely on its previously filed financial statements covering the quarters ended Sept. 30 and Dec. 31, 2022 and the quarter ended Mar. 31, 2023. The company also said that it would restate those financial statements, admitting to its improper calculation of cost of goods sold and inventory.

In addition, Napco estimated that: (1) its net income for the quarter ended Sept. 30, 2022 was overstated by 120%; (2) its net income for the quarter ended Dec. 31, 2022 was overstated by 127%; and (3) its net income for the quarter ended Mar. 31, 2023 was overstated by 13%.

This news was followed by a wave of analyst downgrades and drove the price of Napco shares crashing lower.

If you invested in Napco Security Technologies and have substantial losses, or have knowledge that may assist the firm’s investigation, click here to discuss your legal rights with Hagens Berman.

Whistleblowers: Persons with non-public information regarding Napco Security Technologies should consider their options to help in the investigation or take advantage of the SEC Whistleblower program. Under the new program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, call Reed Kathrein at 844-916-0895 or email NSSC@hbsslaw.com.

FREQUENTLY ASKED QUESTIONS ABOUT THE CASE

What is the NSSC securities class-action case about?

This lawsuit on behalf of investors nationwide alleges that Napco Security Technologies, Inc. (NSSC) made false and misleading statements and failed to disclose to investors that it had not addressed material weaknesses in internal controls over its financial reporting of its cost of goods sold (“COGS”) and inventory; (2) downplayed the severity of material weaknesses regarding its internal controls; (3) overstated inventory and understated COGS from Sept. 30, 2022 to the present; and (4) would need to restate certain of its previously filed unaudited financial statements. This improper behavior caused the price of NSSC shares to drop, leaving many investors with huge losses. This class-action lawsuit aims to recover damages on behalf of affected investors and hold the company accountable for alleged securities law violations.

WHAT SHOULD I DO?

I worked at NSSC. What should I do?

If you were an employee of NSSC during the period relevant to the class-action case, you may have valuable information that could be relevant to the lawsuit. Hagens Berman is one of the nation’s top whistleblower law firms, and has successfully represented many individuals who come forward with information regarding corporate malfeasance. Under the new SEC Whistleblower program, whistleblowers who provide original information may receive rewards totaling up to 30 percent of any successful recovery made by the SEC. For more information, contact Reed Kathrein at 844-916-0895 or NSSC@hbsslaw.com.

There are multiple law firms participating, do I need to contact all of them?

No, you do not need to contact all participating law firms. Generally, class-action lawsuits are consolidated into a single case to streamline the legal process, and attorneys from only a few law firms are selected to serve in a leadership role on the consolidated case. Hagens Berman has a proven track record of being appointed to leadership roles in complex, multidistrict litigation regarding investor fraud and other consumer rights issues, and your claim will be handled by attorneys who have helped secure approximately $325 billion in class-action settlements on behalf of individuals who have suffered due to corporate malfeasance and the wrongdoing of other powerful institutions

AM I ELIGIBLE?

What is the threshold amount to be eligible? What are “substantial” losses?

The threshold amount and the definition of "substantial" losses may vary depending on a number of factors specific to the case, including the size of the company, market cap, shares outstanding and who holds them and the damages alleged by the fraud. In general, to be eligible to participate in a class-action lawsuit, you must be able to demonstrate that you suffered financial losses as a result of the alleged wrongdoing and that your losses meet the criteria set by the court or law firm. Fill out the form and submit your losses.

CAN I PARTICPATE?

Am I affected? What do I need to do to participate?

If you were an investor in NSSC during the relevant period specified in the class-action lawsuit, you may be affected and eligible to participate in the case. To determine your eligibility and potential involvement, fill out the form and submit your losses.

Can any NSSC investor participate?

In most class-action cases, any investor who meets the eligibility criteria, including purchasing the shares during the relevant period, can participate, regardless of the size of their investment. Fill out the form to find out your rights.

I bought on a non-U.S. Exchange. Can I participate?

No. This class-action only covers shares bought on a U.S. exchange, i.e. NASDAQ or NYSE. Fill out the form to find out your rights.

Am I included if I still hold my shares, or do I need to sell to participate?

Participation is based on purchasing shares during the relevant period, rather than your current holdings. Accordingly, you do not need to sell to participate. Fill out the form to find out your rights.