Powell Industries, Inc.
Robbins Umeda LLP Announces an Investigation of Powell Industries, Inc.
Robbins Umeda LLP is investigating possible breaches of fiduciary duty and other violations of the law by certain officers and directors at Powell Industries, Inc. (NASDAQ: POWL). Concerned shareholders who would like more information about their rights and potential remedies can complete the form below and we will contact you directly. You can also contact attorney Gregory E. Del Gaizo at (800) 350-6003.
Robbins Umeda LLP’s investigation focuses on whether officials at Powell Industries breached their fiduciary duties to shareholders, maintained woefully inadequate controls, and wasted corporate assets to the detriment of the company and investors. In particular, the firm is investigating allegations that deficient internal controls at Powell Industries caused the company to issue financial statements that contained serious accounting improprieties. On November 8, 2011, Powell Industries disclosed that previously issued financial statements for the second and third quarters of fiscal year 2011 contained “certain accounting errors” and therefore should no longer be relied upon. Moreover, the company disclosed that these errors occurred at Powell Canada and were related to an inaccurate recording of customer change orders, an erroneous journal entry recorded in accounts payable, incorrect close-out of costs on certain jobs and the application of an incorrect manufacturing overhead rate. Powell Industries acknowledged that the “cumulative impact” of these accounting errors, growing margin pressure, project backlogs, and a non-recurring charge related to the departure of the company’s former president and Chief Executive Officer, would force the company to update its previous guidance for fiscal year 2011 to include downgraded revenue projections.
A potentially appropriate course of conduct for Powell Industries shareholders is filing a derivative action to hold officers and directors accountable for damaging the company. Remedies commonly sought in derivative actions include corporate governance reforms designed to prevent future misconduct, removal of officers or directors whose misconduct injured the corporation, and monetary payments in the form of damages and disgorgement of ill-gotten gains.
Robbins Umeda LLP is a nationally recognized leader in securities litigation and shareholder rights law. The firm represents individual and institutional investors in shareholder derivative and securities class action lawsuits, and has helped its clients realize more than $1 billion of value for themselves and the companies in which they have invested.