On October 28, 2020, Rollins disclosed that a U.S. Securities and Exchange Commission (SEC) investigation had been initiated and believed the SEC’s focus to be how accruals and reserves were established at period ends and their impact on reported earnings going as far back as January 2015.
On February 26, 2021, Rollins announced that an internal investigation into the same matters found “a significant deficiency in the Company’s internal controls relating to the documentation and review of accounting entries for certain reserves and accruals.”
On April 18, 2022, the SEC announced that Rollins agreed to pay $8 million to settle the charges that Rollins made unsupported reductions to its accounting reserves to improperly boost its earnings per share.
On this news, Rollins share price fell $0.55, or approximately 1.6%, to close at $34.29 on April 18, 2022, damaging investors.
