Defendant Name: Akorn, Inc.

Defendant Type: Public Company
SIC Code: 2834
CUSIP: 00972810

Document Reference: comp24082

Document Details

Legal Case Name SEC v. Akorn, Inc., Timothy Dick, and David Hebeda
Document Name Complaint
Document Date 26-Mar-2018
Document Format Civil Proceeding
Case Number 18-cv-02150
Federal District Court Illinois, Northern District of Illinois
Allegation Type Issuer Reporting and Disclosure
Document Summary According to the SEC, "This is a case of financial reporting, books and records, and internal accounting controls violations by Akorn, Inc. ("Akorn"). In May 2016, Akorn restated its financial statements for fiscal year 2014. Its restatement, among other things, acknowledged material weaknesses in its internal control over financial reporting ("ICFR") and disclosed that previously reported net revenue for 2014 was overstated by approximately 7 percent and previously reported income from continuing operations before income taxes for 2014 was overstated by approximately 136 percent. Akorn's inaccurate 2014 financial statements resulted from various errors in Akorn's accrual of rebates and other contractual allowances using a process known as "gross-to-net" revenue accounting as well as its recognition of $2.9 million in revenue for a portion of a transaction with one of its wholesaler customers despite a lack of a basis on which to properly recognize such revenue in accordance with generally accepted accounting principles ("GAAP")."

Related Documents:

LR-24082 26-Mar-2018 Litigation Release
Pharmaceutical Company and its Former CFO and Controller Agree to Settle to Reporting and Accounting Control Violations
"According to the Commission's complaint, in May 2016, Akorn restated its financial statements for fiscal year 2014 acknowledging material weaknesses in its internal control over financial reporting related, in relevant part, to controls surrounding the company's gross-to-net reserve accounts and estimates. In its restatement, the company also disclosed that it overstated net revenue for 2014 by approximately 7 percent and income from continuing operations before income taxes for 2014 by approximately 136 percent. Akorn's material weaknesses persisted over multiple reporting periods and contributed to Akorn's materially inaccurate 2014 financial statements."
court_doc8_18-cv-02150 05-Apr-2018 Court Docket Document
Final Judgment as to Defendant Akorn, Inc.
The Court stated that: "The Securities and Exchange Commission having filed a Complaint and Defendant Akorn, Inc. ("Defendant") having entered a general appearance; consented to the Court's jurisdiction over Defendant and the subject matter of this action; consented to entry of this Final Judgment without admitting or denying the allegations of the Complaint (except as to jurisdiction); waived findings of fact and conclusions of law; and waived any right to appeal from this Final Judgment"

Other Defendants in Action:

David Hebeda
Timothy Dick