Quantum Corporation ($QMCO) Improper Revenue Recognition and Financial Restatement Case

Court: D. Colorado

Case: 1:25-cv-02770

• QMCO investors filed a claim against Quantum Corporation for improperly recognizing revenue, overstating its financial condition, and concealing material weaknesses in internal controls.
• After announcing delays in its annual filing, disclosing a $3.9 million revenue restatement, and losing its CFO amid accounting reviews, QMCO fell 23,8 from July 1, 2025, to August 19, 2025.
• QMCO investors can join this case to be notified about potential recovery.

Case Details:

Between November 15, 2024, and August 18, 2025, Quantum and its executives repeatedly assured investors that its financial statements fairly represented results despite known material weaknesses. In reality, the company improperly recognized service and subscription revenue in violation of ASC 606 and failed to apply proper standalone selling price allocation.

On June 30, 2025, Quantum filed a late 10-K notice, citing a review of revenue recognition practices. Its stock fell 10% the next day. On August 8, 2025, Quantum admitted its Q3 2024 financials could not be relied upon and would be restated, reducing revenue by $3.9 million and disclosing material control deficiencies. Finally, on August 18, 2025, Quantum revealed its CFO’s resignation after less than five months in the role, sending shares even lower.

Based on these events, QMCO investors filed a claim against Quantum, alleging the company:

• It misrepresented its financial results by improperly recognizing revenue.
• It concealed material weaknesses in financial reporting and disclosure controls.
• It artificially inflated its stock price through misleading assurances of accurate reporting.

Investors argue Quantum distorted its financial health to sustain its valuation until accounting failures and governance breakdowns became unavoidable.