Broadband equipment vendor Netopia Inc is to restate its financial results for the past two-and-a-half years after the discovery of revenue-recognition problems and a decision by KPMG to resign as its auditors.
Shares in the Emeryville, California-based company fell 30.99% to $1.96 on the news, and it is likely that Nasdaq will delist its stock because of late filing with the SEC. To add to its problems, the SEC is already investigating whether any security laws have been violated, and class action lawsuits are underway.
The resignation of KPMG is particularly damaging, but Netopia said the firm never qualified its annual reports. It does acknowledge a row with KPMG over access to certain documents that were not resolved by the time the company resigned.