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BBAI.US
id: 1560
BigBear ($BBAI) GAAP Violations and Convertible Notes Disclosure Case
Investors can submit applications for the lead plaintiff role.
E.D. Virginia
Court1:25-cv-00623
Case number03/31/2022
Class period Start03/25/2025
Class period End06/10/2025
Lead Plaintiff motion deadline- $BBAI investors filed a claim against BigBear.ai for misclassifying convertible debt and overstating financials across multiple reporting periods.
- After announcing restatements for 2021–2024 and internal control failures, $BBAI fell 14.9% on March 18, 2025, and another 9.1% on March 26.
Case Details:
Between March 31, 2022 and March 25, 2025, BigBear.ai promoted itself as an AI-driven technology firm, emphasizing national security and enterprise AI solutions. The company completed a SPAC merger in late 2021 and issued $200 million in convertible notes, claiming they qualified for simplified accounting treatment under GAAP.
Throughout the period, BigBear certified its financial statements as GAAP-compliant and told investors that its internal controls were effective. However, the company failed to properly account for the convertible feature of its 2026 notes, violating U.S. accounting standards that require bifurcation and derivative classification.
On March 18, 2025, BigBear announced it would restate financial results dating back to 2021, citing errors in the classification of its convertible notes. It also warned investors that it couldn’t timely file its 2024 annual report due to the accounting review. The stock fell 14.9% on the news.
A week later, on March 25, 2025, BigBear filed the overdue 10-K, confirming the restatement and disclosing a material weakness in its internal controls. The company acknowledged that it failed to execute proper technical accounting reviews, especially for “non-routine or complex transactions.” On March 26, the stock dropped another 9.1%.
Based on these events, $BBAI investors filed a claim against BigBear.ai, accusing the company of the following:
- It misrepresented compliance with accounting standards and failed to properly classify convertible debt.
- It overstated financial results for years while certifying controls that were not effective.
Considering all the representations, investors believe BigBear concealed material weaknesses and accounting errors to preserve stock value during a volatile period.
Case Status
Lead Plaintiff Submission
Alleged Offence
Misleading Statements,
Financial Misrepresentation,
Omissions
Suspected Party
Directors,
Management
Security Type
Stocks
Trade Direction
Long
Shock Event Date
03/18/2025
Filing date
04/11/2025
Lead Plaintiff Deadline
06/10/2025