Law Firms Investigating Tile Shop After Report
New York, NY, Nov. 15, 2013 -- At least two law firms have said in separate press releases that they are investigating claims on behalf of investors that Tile Shop Holdings violated securities laws by inflating its earnings by 200%.
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Pomerantz Grossman Hufford Dahlstrom & Gross law firm and the offices of Howard G. Smith said that shares of Tile Shop declined sharply after a report released by investment firm Gotham Research stated that Tile Shop inflated 2013 earnings by 200% thanks to a China-based supplier Beijing Pingxiu.
The research report also alleges that Beijing Pingxiu accounts for 20-30% of Tile Shop's cost of goods sold, that it is controlled by a relative of a Tile Shop executive, and that the company "has used its China-based undisclosed related party and improper accounting to overstate profits."