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SEC: No plans to charge LI aerospace company

CPI Aerostructures of Edgewood said in an SEC

CPI Aerostructures of Edgewood said in an SEC filing Monday that the Securities and Exchange Commission indicated it does not intend to press charges in connection with an investigation. Credit: Google Maps

CPI Aerostructures Inc., whose records were subpoenaed by the Securities and Exchange Commission in May, said in a filing Monday that a letter from the agency indicated it does not intend to press charges in connection with an investigation into restated financial statements.

The Edgewood maker of assemblies and replacement parts for military and business aircraft, said in an SEC filing that the regulatory watchdog's staff had concluded its investigation and, based on current information, does not plan to recommend enforcement action.

Shares of CPI Aero shed 3% to close Monday at $4.60.

In an email, CPI Aero chief executive Douglas McCrosson described the SEC staff's letter as "positive news, but not unexpected."

In April 2020, the New York Stock Exchange issued a notice informing CPI Aero that it was out of compliance for continued listing because of delays in filing financial reports.

But McCrosson said that the company regained compliance when it filed results for the third quarter of 2020.

The company has acknowledged deficiencies in financial controls, monitoring and risk assessment.

In August 2020, the company restated its financial statements for the year ended Dec. 31, 2018.

In February 2020, CFO Dan Azmon resigned after serving in that role for about three months. The former executive at L3 Technologies Inc., joined CPI after the departure of longtime CFO Vincent Palazzolo in November 2019.

At the time that Azmon resigned, CPI Aero said that quarterly financial statements for several quarters were inaccurate because of how revenue was recorded.

Thomas Powers, a former executive at aerospace manufacturer Triumph Group, is serving as CPI Aero's acting CFO.

The filing Monday said that though no enforcement action is contemplated, the notice "must in no way be construed as indicating that the party has been exonerated or that no action may ultimately result from the staff's investigation."

As of August 2020, the company had 258 full-time employees.

In February, the company was awarded $2.7 million in state tax credits and a state capital grant of $1.05 million as an incentive to remain on Long Island and add 85 new full-time jobs over five years.

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