February 24, 2020 - An amended complaint was filed.
May 21, 2019 - An investor in shares of RCI Hospitality Holdings, Inc. (NASDAQ: RICK) filed a lawsuit in the U.S. District Court for the Southern District of Texas over alleged violations of Federal Securities Laws by RCI Hospitality Holdings, Inc. in connection with certain allegedly false and misleading statements made between February 14, 2018 and May 10, 2019.
Houston, TX based RCI Hospitality Holdings, Inc., through its subsidiaries, engages in the hospitality and related businesses in the United States. RCI Hospitality Holdings, Inc. reported that its Total Revenue rose from $144.89 million for the 12 months period that ended on September 30, 2017 to $165.74 million for the 12 months period that ended on September 30, 2018 and that its Net Income over those time periods increased from $8.25 million to $21.7 million.
On May 10, 2019, RCI Hospitality Holdings, Inc. announced that it would not be able to timely file its Form 10-Q for the period ended March 31, 2019 due to investigations regarding “a series of negative articles about RCI” anonymously published in forums in mid- and late 2018.
Shares of RCI Hospitality Holdings, Inc. (NASDAQ: RICK) declined from $24.10 per share on April 5, 2019 to as low as $18.75 per share on May 20, 2019.
According to the complaint the plaintiff alleges on behalf of purchasers of RCI Hospitality Holdings, Inc. (NASDAQ: RICK) common shares between February 14, 2018 and May 10, 2019, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between February 14, 2018 and May 10, 2019, the Defendants failed to disclose to investors that the Company engaged in numerous transactions with the CEO, including lending him significant sums of money, that these practices were reasonably likely to lead to regulatory scrutiny of the Company, that, as a result of investigations into the Company’s governance, the Company would be unable to timely file its financial statements, and that, as a result of the foregoing, Defendants’ positive statements about the Company’s business, operations, and prospects were materially false and/or misleading and/or lacked a reasonable basis.