RCI Hospitality Holdings, Inc. (RICK) Faces Investor Scrutiny After Tax Fraud Indictment Against Company, CEO, & CFO -- Hagens Berman

Core Viewpoint - RCI Hospitality Holdings, Inc. experienced a significant decline in share price, nearly 16%, following a Grand Jury indictment by the New York Attorney General, which accused the company and its executives of multiple crimes, including bribery and tax fraud [1][4][7]. Group 1: Legal Issues - The New York Attorney General filed 79 charges against RCI and its executives, including CEO Eric Langan and CFO Bradley Chhay, related to bribery and conspiracy concerning tax audits of RCI-owned strip clubs [4][5]. - The indictment alleges that RCI attempted to influence a tax auditor to avoid penalties for unpaid sales taxes through various forms of remuneration [6]. Group 2: Investor Reaction - Following the indictment news, RCI's share price dropped almost 16%, indicating a severe market reaction to the legal developments [1][7]. - Hagens Berman, a national shareholders rights firm, has initiated an investigation into whether RCI misled investors regarding its compliance with laws and internal controls [2][3][7]. Group 3: Investigation Focus - The investigation by Hagens Berman is centered on RCI's assurances about the compliance of its financial statements with accounting rules and the adequacy of its internal controls over financial reporting [3][7]. - The firm is encouraging investors who suffered losses to come forward and assist in the investigation [2][7].