What: Shares of Brixmor Property Group (NYSE:BRX) are plummeting, down nearly 20% at 11:30 a.m. ET.
Three top insiders -- its chief executive officer, chief financial officer, and chief accounting officer -- stepped down as the company revealed its financial statements had been manipulated.
So what: Brixmor's audit committee engaged outside counsel and an independent forensic accounting firm to review the company's historical financial results. It concluded that personnel were directly involved or supervised others who were "involved in smoothing income items between reporting periods."
Brixmor was taken public in 2013 by Blackstone Group (NYSE:BX), which remains its largest shareholder. All three executives who stepped down today have served in their respective roles since Brixmor's IPO. Blackstone held nearly 122 million shares as of September 30, 2015.
Now what: Brixmor does not expect that it will need to restate its financial results as the impact of the accounting issues were immaterial to its performance. Furthermore, it believes that it will not "impact the Company's compliance with the financial covenants in its debt agreements."
Wall Street, however, is perfectly content to sell now and ask questions later. When a company's accounting comes into question, many investors prefer to simply walk away. That's exactly what's happening today, as shares are plunging on higher volume.