Tandy Leather Factory, Inc. (TLF) Accused of Material Misstatements Regarding its Financials
According to the complaint against the company for alleged violations of the Securities and Exchange Act of 1934, between March 7, 2018 and August 15, 2019, defendants attested to the accuracy of Tandy Leather Factory, Inc. financial reporting, but failed to disclose material adverse facts that certain costs of inventory had been improperly valued and expensed. On August 13, 2019, Tandy disclosed that its Audit Committee was investigating “certain aspects of the Company’s methods of valuation and expensing of costs of inventory and related issues regarding the Company’s business and operations.” On August 15, 2019, Tandy filed a Notification of Late Filing with the SEC, stating that it was unable to timely file the company’s quarterly reports for the period ended June 30, 2019, due to the Audit Committee’s investigation. As a result, between August 13 and August 16, 2019, Tandy’s stock declined almost 20%. Then, on August 18, 2019, Tandy revealed that certain financial statements should no longer be relied upon and that its Chief Financial Officer and Treasurer had resigned. The value of Tandy’s stock has yet to recover.
