Investigation of PaySign, Inc.
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PaySign, Inc. (PAYS) Accused of Misleading Shareholders
According to the complaint for alleged violations of the Securities Exchange Act of 1934 between March 12, 2019 and March 15, 2020, on March 12, 2019, PaySign, Inc. (PAYS) attested to its accuracy over financial reporting in its Form 10-K for fiscal year 2018 and acknowledged the importance of its computer network systems in accurately and efficiently processing its transactions as well as the risks associated with these systems, but assured investors its internal controls were effective. These same statements were reiterated in its following quarterly reports for 1Q to 3Q 2019, each time affirming that there “were no changes in [its] internal controls over financial reporting that occurred during the quarter…that have materially affected, or are reasonably likely to materially affect, [its] internal control over financial reporting.” Contrary to PaySign’s assurances, on March 16, 2020, PaySign announced that it would be unable to timely file its annual report for fiscal year 2019, stating “the filing extension will provide the necessary time to complete [PaySign’s] financial audit” and revealing it had identified “material weaknesses related to its assessment of internal controls over financial reporting and information technology general controls.” On this news, shares of PaySign fell almost 17% to close at $4.59.