Please help me analysis this article

SUMMARY

1. Advanced Drainage Systems, Inc. (ADS or the Company) is an Ohio-based manufacturer of corrugated plastic pipe and drainage systems. In July 2014, following an initial public offering (IPO) of its shares pursuant to a registration statement filed with the Commission, ADS became a public reporting company. In its registration statement and in quarterly and other reports filed with the Commission, ADS materially misstated its financial results for fiscal years 2013, 2014, and 2015, and its quarterly financial results for fiscal years 2014 and 2015. For example, ADS overstated its income before taxes in fiscal years 2013, 2014, and 2015 by $7.8 million (20%), $1.8 million (5%), and $22 million (90%), respectively. 2. As described below, these misstatements resulted from improper accounting, including unsupported journal entries directed or approved by the Companys Chief Financial Officer (CFO), Mark Sturgeon, and insufficient internal accounting controls. The CFO directed or approved unsupported journal entries to inventory, cost of goods sold, and other accounts that resulted in overstated Company earnings. ADS did not have sufficient internal accounting controls in place to provide reasonable assurance that, among other things, transactions were recorded as necessary to permit preparation of financial statements in conformity with generally accepting accounting principles (GAAP). 3. On March 29, 2016, ADS restated and revised its financial results for fiscal years 2013, 2014 and 2015, and its quarterly financial results for fiscal years 2014 and 2015, in a series of filings that included its first annual report on Form 10-K (the Restatement).4 4. As a result of the conduct described herein, ADS violated the antifraud provisions of Securities Act Sections 17(a)(2) and 17(a)(3), the reporting provisions of Exchange Act Section 13(a) and Rules 12b-20, 13a-11, and 13a-13 thereunder, the books and records provisions of Exchange Act Section 13(b)(2)(A), and the internal accounting control provisions of Exchange Act Section 13(b)(2)(B); and Sturgeon violated Securities Act Sections 17(a)(2) and 17(a)(3), Exchange Act Section 13(b)(5) and Rule 13b2-1, and caused ADS to violate Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Rules 12b-20, 13a-11 and 13a-13 thereunder. Sturgeon also violated Section 304(a) of the Sarbanes-Oxley Act of 2002 by failing to reimburse the Company for $173,970 in profits realized from his sale of ADS securities following the Companys filing of its 2015 quarterly reports on Form 10-Q, which required restatement.

RESPONDENTS 5. Advanced Drainage Systems, Inc. is a Delaware corporation with its principal place of business in Hilliard, Ohio. ADS is a manufacturer of corrugated plastic pipe and drainage systems. ADSs common stock is registered with the Commission under Section 12(b) of the Exchange Act and trades on the New York Stock Exchange under the ticker symbol WMS. 6. Mark B. Sturgeon, 63, is a resident of Columbus, Ohio. Sturgeon worked at ADS from 1981 until 2016 and was the Chief Financial Officer and Executive Vice President of ADS from 1994 until November 9, 2015. Sturgeon retired from ADS in March 2016. Sturgeon is a Certified Public Accountant and maintained an active license in Ohio from 1980 to 2011.