TheGrantLawFirm Investigates Class Action Claims Against Hanger, Inc. and its Auditor Ernst & Young LLP
TheGrantLawFirm, PLLC is presently investigating whether the Board of Directors (the “Board”) of Hanger, Inc. (“Hanger” or the “Company”) (NYSE:HGR), breached its fiduciary duties in failing to oversee and prevent Hanger management from making allegedly false and misleading public statements which have subjected the Company to a securities fraud class action.
On June 9, 2015, the Company announced via a Form 8-K restated financials for years ended December 31 of 2009, 2010, 2011, 2012, and 2013; all interim periods for 2012 and 2013; and the interim periods ended March 31 and June 30, 2014 (the “Relevant Period”). According to the Company, the restatements were due to material errors in inventory valuation, lease accounting, and other adjustments. This investigation further focuses on the actions of PricewaterhouseCoopers LLP (“PwC”) in connection with the dissemination of materially false and misleading statements by Hanger in violations of the Securities Exchange Act of 1934 in relation to their audits of Hanger during the Relevant Period. During that time, PwC repeatedly issued clean audit opinions on Hanger’s financial statements filed on Form 10-K with the United States Securities and Exchange Commission (“SEC”), despite Hanger’s overstatement of pre-tax income of approximately $40 million or 10% during the Relevant Period. PwC also reviewed Hanger’s quarterly financial statements filed on Form 10-Q with the SEC.
Further, Hanger disclosed that it suffered from material weaknesses in its internal controls over financial reporting and that “these material weaknesses contributed to the [accounting] errors.”
As a consequence of this scheme, and PwC’s involvement, the Company’s stock has traded at significantly inflated prices through the Class Period, before the revelations of the alleged fraud was disclosed.
If you would like to discuss this investigation with us or believe that you may have been damaged by these acts, please contact Jorge Amador at firstname.lastname@example.org. Jorge Amador is a forensics accounting expert and class action attorney who is a native Spanish speaker.
Jorge Amador, 212-292-4449