NEW YORK, June 01, 2026 (GLOBE NEWSWIRE) -- Levi & Korsinsky, LLP reminds purchasers of Veritone, Inc. (NASDAQ: VERI) securities of a pending securities class action.
THE CASE: A class action seeks to recover damages for investors who purchased VERI securities between October 14, 2025 and April 14, 2026.
YOUR OPTIONS: You may be entitled to compensation without payment of any out-of-pocket fees. See if you can recover losses or contact Joseph E. Levi, Esq. at jlevi@levikorsinsky.com or (212) 363-7500.
VERI shares fell $0.77 per share (29.5%) on March 27, 2026, followed by additional declines of 9.14% and 8.3% on subsequent corrective disclosures. Investors have until July 20, 2026 to seek lead plaintiff status.
How Veritone Allegedly Turned a Software License Into $13 Million in Revenue
An AI software company cannot recognize revenue on a non-monetary exchange simply by assigning its own negotiated price to the deal. Under ASC 606, the transaction must be measured at the fair value of what was actually received or given up. The lawsuit contends Veritone did the opposite: the Company sold an on-premise software license in exchange for certain intangible rights at a negotiated price of $13.0 million, despite the software's estimated standalone selling price ranging from just $0.4 million to $11.3 million. This gap of up to $12.6 million between the negotiated price and the estimated fair value sits at the heart of the accounting questions that ultimately forced a restatement.
Agent-vs.-Principal Misclassification and Its Alleged Impact
The filing states that Veritone recorded gross revenue and costs on transactions where it acted as an agent rather than a principal. Under ASC 606, an agent recognizes only its net fee as revenue. By booking the full gross amount, the Company allegedly inflated both its revenue line and cost of revenue, creating the appearance of a larger business than the underlying economics supported. The April 14, 2026 Form 8-K confirmed this misclassification affected both the three-month and nine-month periods ended September 30, 2025.
Alleged Barter Revenue Impact by the Numbers
- The $2.2 million revenue overstatement from the on-premise software valuation error represented approximately 8% of Q3 2025 reported revenue of $29.1 million
- Accounts receivable were overstated by $0.9 million (approximately 3% of the reported balance)
- Accumulated other comprehensive income was overstated by $1.5 million, a 246% overstatement of the reported figure
- Additional billing and recognition errors added approximately $0.2 million in further Q3 revenue overstatement
- Cost of revenue misstatements included a $0.4 million overstatement for the nine-month period
- Royalties payable were overstated by $0.7 million, classified within accrued expenses
Calculate your potential recovery or call (212) 363-7500.
"The complaint raises serious questions about whether investors received accurate information about revenue derived from non-standard transactions that required careful accounting judgment under ASC 606." -- Joseph E. Levi, Esq.
About Levi & Korsinsky, LLP
Levi & Korsinsky, LLP -- Top 50 securities litigation firm (ISS, seven consecutive years). Over 70 professionals. Hundreds of millions recovered.
Frequently Asked Questions About the VERI Lawsuit
Q: What specific misstatements does the VERI lawsuit allege? A: The complaint alleges Veritone made materially false or misleading statements regarding its revenue recognition practices, internal controls, and financial results during the class period. When the true state of its accounting was revealed through three successive corrective disclosures, the stock price declined sharply.
Q: How much did VERI stock drop? A: Shares fell approximately 29.5% -- a decline of $0.77 per share -- after the Company first disclosed it was finalizing accounting determinations for certain revenue transactions under ASC 606. Additional declines of 9.14% and 8.3% followed on subsequent disclosures regarding restatement and unreliable financial statements.
Q: What do VERI investors need to do right now? A: Gather brokerage records including purchase dates, share quantities, and prices paid. Contact Levi & Korsinsky for a free, no-obligation evaluation at jlevi@levikorsinsky.com or (212) 363-7500. No immediate action is required to remain eligible as a class member.
Q: What does it cost me to participate? A: Nothing. Securities class actions are handled on a pure contingency basis. No upfront fees, no retainer, no out-of-pocket costs.
Q: What if I already sold my VERI shares -- can I still recover losses? A: Yes. Eligibility is based on when you purchased, not whether you still hold them. Investors who bought during the class period and sold at a loss may still participate.
Q: What if I missed the lead plaintiff deadline? A: The deadline applies only to investors seeking lead plaintiff appointment. Class members who miss it can still participate in any settlement or recovery.
Q: Has Levi & Korsinsky handled similar cases before? A: Yes, including securities class actions involving revenue inflation, earnings guidance fraud, dividend misrepresentation, and executive misconduct across numerous industries.
CONTACT:
Levi & Korsinsky, LLP
Joseph E. Levi, Esq.
Ed Korsinsky, Esq.
33 Whitehall Street, 27th Floor
New York, NY 10004
jlevi@levikorsinsky.com
Tel: (212) 363-7500
Fax: (212) 363-7171
