We are investigating Whitestone REIT (WSR) (“Whitestone” or the “Company”) for potential violations of the federal securities laws.
The investigation concerns whether Whitestone and certain of its officers and/or directors have engaged in securities fraud or other unlawful business practices.
On February 27, 2019, post-market, Whitestone announced that "the Company's unaudited consolidated financial statements as of and for the periods ended March 31, 2018, June 30, 2018 and September 30, 2018 (collectively, the 'Prior Period Financial Statements') included in the Company's Quarterly Reports on Form 10-Q for the quarterly periods ended March 31, 2018, June 30, 2018 and September 30, 2018, respectively, should be restated . . . and should no longer be relied upon." Whitestone specifically cited certain accounting errors relating to derecognition of nonfinancial assets."
On this news, Whitestone's stock price fell $2.07 per share, or 14.53%, over the following two trading sessions, closing at $12.18 per share on March 1, 2019.
Then, on March 15, 2019, post-market, Whitestone filed an annual report announcing the Company's financial and operating results for the quarter and year ended December 31, 2018. Therein, Whitestone disclosed that "[t]he Company identified a material weakness in its internal control over financial reporting as of December 31, 2018. As a result of the material weakness, management concluded that the Company's internal control over financial reporting was not effective as of December 31, 2018 and determined that its disclosure controls and procedures were not effective as of March 31, 2018, June 30, 2018, September 30, 2018 and December 31, 2018. The Company has implemented and continues to implement measures to remediate the material weakness."