March 16, 2021 - An investor in shares of Sequential Brands Group, Inc. (NASDAQ: SQBG) filed a lawsuit in the U.S. District Court for the Central District of California over alleged violations of Federal Securities Laws by Sequential Brands Group, Inc. in connection with certain allegedly false and misleading statements made between November 3, 2016 and December 11, 2020.

New York based Sequential Brands Group, Inc., together with its subsidiaries, owns various consumer brands in the active and lifestyle categories. Sequential Brands Group, Inc. reported that its annual Total Revenue declined from $169.95 million in 2018 to $101.57 million in 2019, and that its EBIT decreased from $82.18 million in 2018 to $39.9 million in 2019.

On December 11, 2020, the U.S. Securities and Exchange Commission ("SEC") issued a press release entitled "SEC Charges Sequential Brands Group Inc. with Deceiving Investors by Failing to Timely Impair Goodwill."  According to the SEC's press release, "by avoiding an impairment to its goodwill in 2016, Sequential inflated its income from operations, created a false impression of its financial condition, and misstated its financial statements and reports for almost a year." 

Shares of Sequential Brands Group, Inc. (NASDAQ: SQBG) closed on December 11, 2020, at $16.20 per share.

According to the complaint the plaintiff alleges on behalf of purchasers of Sequential Brands Group, Inc. (NASDAQ: SQBG) common shares between November 3, 2016 and December 11, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between November 3, 2016 and December 11, 2020, the defendants made false and/or misleading statements and/or failed to disclose that in late 2016, the Company knew or should have known that its goodwill was likely impaired, that the Company avoided and delayed the material write down to goodwill in late 2016 through 2017, that the Company understated its operating expenses and net loss and also materially overstated its income from operations, goodwill, and assets from late 2016 through 2017, that the Company’s internal controls were deficient, that the Company has failed to restate, correct, or disclose relevant improprieties, deceptive conduct, misstatements, omissions, and control violations, that as a result of the foregoing, the Company was at greater risk of regulatory scrutiny and enforcement, and that as a result, defendants’ statements about its business, operations, and prospects, were materially false and misleading and/or lacked a reasonable basis at all relevant times.