Bill Gross warns on gold momentum as regional bank stocks tumble
Investing.com -- OSI Systems , Inc. (NASDAQ:OSIS) shares fell 5% following a report from Culper Research, which announced a short position in the company. Culper’s extensive research suggests that OSI Systems has significantly misrepresented its financial position and progress on a major contract with Mexico’s Ministry of Defense (SEDENA), which involves the installation of vehicle and cargo screening systems at border crossings.
Culper’s findings indicate that OSI Systems may have prematurely recognized a substantial portion of revenue from the SEDENA contract, despite evidence suggesting the company is far behind on its obligations. The research firm’s review included examining import authorization records, site visits, and interviews, revealing that only a fraction of the contracted systems are operational, with many missing or in disrepair.
Furthermore, Culper Research raises concerns about OSI Systems’ involvement in two separate cases of potential Foreign Corrupt Practices Act (FCPA) violations, citing DoJ subpoenas and investigations into the company’s business dealings in Mexico since 2020. The report also mentions the untimely death of an OSI employee previously indicted on charges related to financial crimes at a competitor company, which has seemingly intensified DoJ interest in OSI.
The short seller’s report also highlights significant insider selling, with OSI’s Chairman and CEO Deepak Chopra setting up a new stock sale plan just as he announced his retirement by the end of 2024. Over the past two years, Chopra has sold $39.4 million in stock, with insiders collectively selling $70.0 million.
OSI Systems has yet to fully disclose the nature of the DoJ’s investigations or address the allegations of its ties to corrupt networks, which could potentially lead to substantial legal and financial repercussions. Investors reacted to these revelations by shedding shares, reflecting concerns over the company’s future performance and potential regulatory issues.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.