WageWorks, Inc. Files Notification of Late Filing – WAGE Concludes It Has Material Weakness in Its Internal Control Over Financial Reporting
On March 1, 2018, WageWorks, Inc. (NYSE: WAGE), “a leader in administering Consumer-Directed Benefits,” issued an announcement disclosing that WAGE “is delaying its Annual Report on Form 10K for the year ended December 31, 2017 and its financial results and associated conference call for the fourth quarter of 2017.”
On this news, WAGE Stock Dropped $9.75, or more than 18%, to close at $42.70 per share on March 1, 2018.
WAGE’s Notification of Late Filing (SEC Form 12B-25)
On March 2, 2018, WageWorks filed a Notification of Late Filing with the SEC, which stated that WAGE
. . . is unable, without unreasonable effort or expense, to file its annual report on Form 10-K for the year ended December 31, 2017 within the prescribed time period because it requires additional time to complete its financial statements and its assessment of [WAGE’s] internal control over financial reporting; accordingly, [WAGE’s] independent registered accounting firm, KPMG LLP (“KPMG”), has not yet completed its audits of [WAGE’s] financial statements and [WAGE’s] internal control over financial reporting as of December 31, 2017. [WageWorks] does not currently expect to file its Annual Report on Form 10-K by the prescribed due date allowed pursuant to Rule 12b-25.
[WageWorks] has concluded that it has a material weakness in its internal control over financial reporting as of December 31, 2017 related to managing change and assessing risk in the areas of non-routine and complex transactions. As a result of the material weakness, [WageWorks] has concluded that its internal control over financial reporting and disclosure controls and procedures were ineffective as of December 31, 2017. [WageWorks] is in the process of designing processes and controls to address this material weakness. [WageWorks] intends to disclose more detailed description of this weakness, including a plan for remediating this deficiency, in the 2017 Form 10-K.
The Audit Committee of [WAGE’s] Board of Directors is conducting an independent investigation of [WAGE’s] internal control over financial reporting in fiscal 2016 and 2017. Among other matters, the investigation consists of a review of certain issues, including revenue recognition, related to the accounting for a government contract during fiscal 2016 and associated issues with whether there was an open flow of information and appropriate tone at the top for an effective control environment.
Additionally, the Audit Committee investigation of accounting and internal control matters is ongoing and may ultimately result in the identification of other accounting issues, further material weaknesses, and/or require the restatement of [WAGE’s] financial statements for previous periods. (Emphasis added)
WageWorks Investors & Shareholders
If you purchased, or otherwise acquired, WAGE stock shares and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].