Shiloh Industries, Inc.
Robbins Arroyo LLP: Shiloh Industries, Inc. (SHLO) Misled Shareholders According to a Recently Filed Class Action
Robbins Arroyo LLP announces that a securities fraud class action complaint was filed in the U.S. District Court for the Southern District of New York. The complaint alleges that officers and directors of Shiloh Industries, Inc. (NASDAQGS: SHLO) violated the Securities Exchange Act of 1934 between March 9, 2015 and September 14, 2015, by making materially false and misleading statements about Shiloh’s business prospects. Shiloh, together with its subsidiaries, supplies light weighting, as well as noise, vibration, and harshness solutions to automotive, commercial vehicle, and other industrial markets in Europe, Mexico, and the United States.
Shiloh Fails to Disclose Inadequate Controls Over its Financial Reporting
According to the complaint, Shiloh officials failed to disclose that the company underreported the cost related to its manufacturing of products and that it engaged in irregular accounting practices related to surcharges assessed on steel at its facility in Wellington, Ohio. The complaint further alleges that the company lacked adequate controls over financial reporting, and as a result, its earnings and income were overstated.
On September 9, 2015, Shiloh announced that it would be unable to timely file its quarterly report for the period ending July 31, 2015, because of an ongoing internal investigation into the accounting for certain costs at its Wellington facility. The company further stated that it expected the aggregate impact on its net income to be between $2.2 and $2.5 million. On this news, Shiloh’s stock fell $1.84 per share, or 16.7%, to close at $9.15 per share on September 10, 2015.
Then, on September 14, 2015, the company issued a press release disclosing its financial results for the third quarter of 2015, stating that a material weakness existed in its internal control over its financial reporting and that it would need to restate its income for prior periods by over $2 million. On this news, Shiloh’s stock declined $1.68 per share, or 16%, to close at $8.58 per share on September 15, 2015.
Shiloh Shareholders Have Legal Options
Concerned shareholders who would like more information about their rights and potential remedies can contact attorney Darnell R. Donahue at (800) 350-6003, or you can complete the form below and we will contact you directly.