What is the timeline for the investigation and any expected disclosures or legal filings?

Investigation timeline & expected disclosures

BFA Law has publicly announced that it has opened an investigation into Simulations Plus (NASDAQ SLP) for possible federal securities‑law violations. When a securities‑law firm makes a public statement like this, the company is required to alert the market through a Form 8‑K filing within four business days of the event that makes the information material. Consequently, you can expect an 8‑K to hit the SEC’s EDGAR system within the next week (most likely by mid‑week, given the press release was issued on a business day).

After the initial 8‑K, the investigation will move into the standard SEC review phase. Historically, the SEC’s “pre‑complaint” or “ex‑‑complaint” process for securities‑fraud matters runs 30 – 60 calendar days from the first filing, during which the agency may request additional documents, interview management, or issue a “letter of inquiry.” If the agency decides to pursue a formal enforcement action, a Form 10‑K/10‑Q amendment or a Form 6‑K (for foreign‑issued securities) could be required later in the quarter, and a press release or court filing would follow the firm’s decision to file a class‑action lawsuit or settle the case.

Trading implications

• Immediate reaction: The market has already priced in the impairment charge and the auditor departure, but the pending 8‑K will likely trigger a fresh wave of volatility. Expect a short‑term sell‑off on the day of the filing, especially if the 8‑K reveals additional material weaknesses or pending litigation.
  
• Mid‑term outlook: If the SEC’s review extends into the 30‑60‑day window without a material adverse finding, the stock may stabilize and recover some of the lost ground, as the “unknown” factor is removed. Conversely, a formal enforcement action or a court‑filed class‑action complaint would reignite downside pressure and could push the share price toward new lows.
  
• Actionable step: Monitor the EDGAR 8‑K feed for Simulations Plus today and over the next 3‑5 business days. If the filing is more severe than the press release suggests (e.g., disclosure of internal control deficiencies, pending SEC inquiry, or a pending class‑action lawsuit), consider reducing exposure or short‑positioning on a tight stop‑loss. If the 8‑K is relatively benign (e.g., confirming the impairment charge but no further violations), the sell‑off may be short‑lived, presenting a buy‑the‑dip opportunity for longer‑term investors.
  

In short, the investigation will generate an SEC 8‑K filing within the next week, followed by a 30‑ to 60‑day SEC review period that could culminate in additional disclosures or a court‑filed class‑action suit. Traders should brace for heightened volatility around the 8‑K release and adjust positions accordingly.