RCI Hospitality Holdings, Inc. (RICK) Securities Class Action Lawsuit Filed [October 16, 2025]

Introduction to RCI Hospitality Holdings, Inc. (RICK) Securities Class Action Lawsuit

A securities fraud class action has been filed against RCI Hospitality Holdings, Inc. (NASDAQ: RICK) covering the period from December 15, 2021 to September 16, 2025. Investors allege the company and senior executives misrepresented their disclosure of fraud and understated legal risks while engaging in tax fraud and bribery. The complaint says RCI Hospitality Holdings, Inc. repeatedly certified that any fraud involving management was disclosed and suggested only a limited issue involving a non-executive employee. On September 16, 2025, the New York Attorney General announced a criminal indictment alleging a years-long scheme to bribe a state tax auditor and evade more than $8 million in sales taxes. After the announcement, RCI Hospitality Holdings, Inc.'s stock fell sharply over two trading days, allegedly harming investors.

RCI Hospitality Holdings, Inc. (RICK) Securities Lawsuit Case Details

Case Name: Hernandez v. RCI Hospitality Holdings, Inc., et al.
Case No.: 4:25-cv-04477
Jurisdiction: U.S. District Court, Southern District of Texas, Houston Division
Filed on: September 21, 2025

RCI Hospitality Holdings, Inc. (RICK) Company Profile

RCI Hospitality Holdings, Inc. (“RCI”) owns and operates adult entertainment nightclubs across the U.S. under brands that include Rick's Cabaret, Tootsie's Cabaret, Vivid Cabaret, and others. RCI Hospitality Holdings, Inc. securities trade on The Nasdaq Global Market under the ticker symbol "RICK."

RCI Hospitality Holdings, Inc. (RICK) Securities Lawsuit Class Period

December 15, 2021–September 16, 2025, inclusive.

All persons other than defendants who acquired RCI Hospitality Holdings, Inc. securities publicly traded on NASDAQ during the Class Period, and who were damaged thereby may be eligible to join the RCI Hospitality Holdings, Inc. (RICK) class action lawsuit.

Allegations in the RCI Hospitality Holdings, Inc. (RICK) Securities Class Action Lawsuit

The lawsuit targets RCI Hospitality Holdings, Inc., its Chief Executive Officer Eric S. Langan, and its Chief Financial Officer and Principal Accounting Officer Bradley Chhay. According to the complaint, throughout the class period they represented that management disclosed "any fraud" to auditors and the audit committee and presented their legal risks and internal controls as sound.

The narrative begins on December 14, 2021, when the Company filed its 2021 Annual Report on Form 10-K, and attached to the Annual Report were SOX Certifications signed by Defendants Langan and Chhay stating that management disclosed any fraud involving those with significant roles in internal control over financial reporting. Similar SOX Certifications followed on the 2022 Annual Report on Form 10-K filed December 14, 2022 and the 2023 Annual Report on Form 10-K filed December 14, 2023, repeating the assurances referenced in the complaint. Accompanying the 2024 Annual Report on Form 10-K filed on December 16, 2024, Defendants again provided substantially similar SOX Certifications.

Meanwhile, on December 16, 2024, RCI management issued risk disclosures that, by only revealing a "non-executive corporate employee" had been placed on administrative leave, allegedly understated the likelihood of material legal consequences. During this period, investors were told about the company's business, operations, and prospects without the risks alleged in the complaint being fully disclosed.

Investors allege that, behind these statements, defendants engaged in tax fraud and committed bribery to cover it up. As a result, the complaint alleges the company understated legal risk and made materially false or misleading statements about its business, operations, and prospects throughout the class period.

The Truth Emerges

On September 16, 2025, the New York State Attorney General announced a 79-count indictment unsealed against RCI Hospitality Holdings, Inc., five executives, and three RCI-owned Manhattan clubs. The announcement stated that RCI executives bribed an auditor with the New York Department of Taxation and Finance to avoid paying over $8 million in sales taxes to New York City and the state from 2010 to 2024. The complaint highlights a June 2023 message attributed to Chhay—"Tim [Winata] got the guy to $47k in Vivid New York. But owes him a couple trips"—as an example of the alleged scheme that surfaced with the indictment.

These revelations, according to the complaint, directly contradicted years of SOX Certifications about disclosing "any fraud" and the company's representations about internal controls and legal risks. The single major disclosure event exposed what investors allege was concealed for years.

Market Reaction

On this news, the price of RCI stock fell 16%, or by $5.53 per share to close at $28.79 on September 16, 2025. The next day, the stock fell a further 10.38%, or by $2.99 per share to close at $25.80 on September 17, 2025, for a two-day decline of $8.52.

Next Steps

• Submissions for lead plaintiff are due November 20, 2025. 
• The Court will issue its order for lead plaintiff and counsel in the weeks after submissions are due.
• The Court will then consider motion for class certification.
• The Court will later consider a Motion to Dismiss.

To learn if you are eligible for recovery under the RICK securities class action lawsuit, visit the case submission page here.

Disclaimer: This shareholder alert is for informational purposes only and does not constitute legal advice. Consult a qualified attorney for personalized guidance. No specific outcomes are guaranteed.