Probes Reporter Research Update - November 05, 2018

Probes Reporter® research reports provide commentary and analysis on public company interactions with investors and with the SEC. They are heavily reliant on our expertise in using the Freedom of Information Act

Companies in Today’s Research Update

  • A10 Networks, Inc. – ATEN
  • Freeport-McMoRan Inc. – FCX
  • Hain Celestial Group, The – HAIN
  • MiMedx Group Inc. – MDXG
  • Pyxus International, Inc., fka, Alliance One International, Inc. – PYX/AOI
  • Sony Corp. – SNE
  • World Acceptance Corp. – WRLD

Today’s Focus Companies

A10 Networks Inc. – ATENDisclosed SEC investigation(s) confirmed as ongoing.  In our opinion, A10 Networks is a troubled company headed by a management team playing Disclosure Games® regarding an SEC investigation.  More in today’s report.

Pyxus International, Inc., fka, Alliance One International, Inc. – PYX/AOI:  It is rare we get the kind of documents we received on a closed SEC investigation of Alliance One.  If you’ve read more than one of our reports, you’ve seen us complain that the SEC doesn’t usually release even one word from its Case Closing Recommendations.  This is the report that explains why the investigation was opened, what work was done, and the conclusions reached.  Well, we got one on Alliance One.   Even if you don’t have an interest in this company you should take a look at this document.  Today’s report also updates on where things stand on a separate, disclosed, formal SEC investigation which is now protracted.

Company Comments & Watch List Updates

Freeport-McMoRan Inc. – FCX:      Undisclosed SEC investigation is again confirmed. We note FCPA investigations are common among the mining companies.  Details and history in today’s report.

Hain Celestial Group, The – HAIN:   Disclosed SEC investigation(s) confirmed as on-going.  It looks like Hain Celestial resolved a two-year SEC accounting investigation.  Not so fast.  There is a subtlety in language used by the company that could blow-up on investors if not verified.  We explain in today’s report.

MiMedx Group Inc. – MDXG:  Disclosed SEC investigation(s) confirmed as on-going.  Inadequate disclosures make it impossible to assess this material and on-going risk.  Details in today’s report.

Sony Corp. – SNE:  Involvement in a previously undisclosed SEC investigation now appears over – Removed from Watch List of companies with undisclosed SEC investigations – Documents released.  Sony appears to us as one of those companies that has yet to meet an SEC investigation it thinks needs to be disclosed.  There is now a well-documented and long history we’ve compiled over the years that supports this conclusion.  We recently received a set of analytically-rich documents from a formal SEC investigation into a wide range of accounting matters that spanned the better part of 2016 and 2017.  Today’s report updates the history and gives suggestions on what an investor is to do about this.

World Acceptance Corp. – WRLD:  Disclosed SEC investigation(s) confirmed as ongoing.  World Acceptance Corp. has been disclosing an SEC investigation related to the Foreign Corrupt Practices Act since Jun-2017. The related disclosures are cut-and-paste with occasional incremental information.  Throughout the duration, we did find the company consistently misled investors with this statement, “Because this is an ongoing investigation, we are not able to provide additional information about the investigation or answer any additional questions about the investigation at this time.”  There’s plenty of questions companies can answer about their SEC investigations.  Don’t buy this line.  The lasting danger from an FCPA investigation is not found in the fines paid, if any …

To learn more on our process and what our findings mean, click here.

Disclosure Games® is a term we use to highlight those public companies engaging in disclosure practices that in our opinion may be misleading, confusing, evasive, or otherwise lacking the transparency needed for investors to make well-informed investment decisions regarding a potentially material exposure. 

material exposure. 

Notes: New SEC investigative activity could theoretically begin or end after the date covered by the latest information in this report which would not be reflected here.  All companies we identify as having undisclosed SEC investigations are maintained on our Watch List of companies with undisclosed SEC probes if we learn about them at the time the investigation(s) are ongoing.  The SEC did not disclose the details on investigations referenced herein. All we know is that they somehow pertain to the conduct, transactions, and/or disclosures of the companies referenced above.  Documents released by the SEC can provide additional insights but, as always, should only be viewed as a piece of your overall investment mosaic. The SEC reminds us that its assertion of the law enforcement exemption should not be construed as an indication by the Commission or its staff that any violations of law have occurred with respect to any person, entity, or security. 

To learn more about our research process, including how to best use this information in your own decision-making, click here.

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