RCI Announces Settlement of SEC Investigation

Rhea-AI Summary

RCI Hospitality Holdings, Inc. (Nasdaq: RICK) announced the settlement of a civil administrative proceeding with the SEC on September 22, 2020. CEO Eric Langan and former CFO Phillip Marshall were involved in the settlement, agreeing to a cease-and-desist order without admitting or denying findings related to the Securities Exchange Act. The company will pay a civil penalty of $400,000, while Langan and Marshall will pay $200,000 and $35,000, respectively. The SEC acknowledged RCI’s cooperation and implemented internal controls to enhance compliance and governance.

Positive

• RCI's settlement demonstrates proactive steps toward compliance with SEC regulations.
• Engaged outside counsel and third-party consultant for independent review and executive compensation process improvements.
• Implemented new internal controls and compliance policies enhancing overall corporate governance.

Negative

• Civil penalties totaling $400,000 for the company and $235,000 collectively for executives may impact financial resources.

HOUSTON, Sept. 22, 2020 /PRNewswire/ -- RCI Hospitality Holdings, Inc. (Nasdaq: RICK) today announced the settlement by the company, CEO Eric Langan, and former CFO Phillip Marshall of a civil administrative proceeding with the SEC and the conclusion of the previously disclosed SEC investigation.

The company, Mr. Langan and Mr. Marshall agreed, without admitting or denying the findings, to a cease-and-desist order regarding certain sections of the Securities Exchange Act of 1934 and certain rules promulgated thereunder. The SEC's administrative summary and order regarding its settlement with RCI, Mr. Langan and Mr. Marshall can be found at https://www.sec.gov/enforce/34-89935-s. As part of the settlement, the company agreed to a civil penalty in the amount of $400,000, and Mr. Langan and Mr. Marshall agreed to civil penalties in the amount of $200,000 and $35,000, respectively.

In accepting the settlement, the SEC considered remedial acts undertaken by RCI and cooperation afforded the Commission staff. Specifically, the company (i) engaged outside counsel to conduct an independent review; (ii) engaged a third-party consultant to assist in reviewing and revising its executive compensation process, policies and controls; and (iii) implemented new internal controls and compliance policies and procedures concerning perquisites, aircraft usage, expense reimbursement, travel, charitable contributions, related party transactions, and family employment.

Separately, the SEC also reached a settlement with Steve L. Jenkins, a former member of RCI's board of directors.

Media & Investor Contacts

Gary Fishman and Steven Anreder at 212-532-3232 or gary.fishman@anreder.com and steven.anreder@anreder.com

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SOURCE RCI Hospitality Holdings, Inc.

FAQ

What was the settlement amount for RCI Hospitality Holdings with the SEC?

RCI Hospitality Holdings agreed to a civil penalty of $400,000.

Who were the individuals involved in the SEC settlement with RCI?

CEO Eric Langan and former CFO Phillip Marshall were involved in the SEC settlement.

What compliance measures did RCI Hospitality implement after the SEC investigation?

RCI implemented new internal controls and compliance policies regarding various corporate governance aspects.

When did RCI announce the SEC settlement?

RCI announced the SEC settlement on September 22, 2020.

What is the ticker symbol for RCI Hospitality Holdings?

The ticker symbol for RCI Hospitality Holdings is RICK.