Many in the work comp industry are familiar with the employer servicing company Barrett Business Services Inc. (BBSI), as they provide services to many comp carriers. They are a staffing company but also help businesses with payroll and workers’ compensation coverage.

They are now under investigation for possibly giving their investors misleading information and violating security laws.

Auditors found inconsistencies in the company’s workers’ compensation reserves in the company’s second quarter report for 2014. Moss Adams, an independent auditor, said that they found evidence that a possible “illegal act has or may have occurred with respect to BBSI’s workers’ compensation expense reserve”, and they recommended another investigation. The SEC is investigating the company, and BBSI has hired law firm Stoll Berne of Portland, OR to conduct an investigation into their workers’ compensation reserve. In the third quarter of 2014, the company charged $80 million that BBSI says was to help them comply with California’s work comp reform laws and boost their comp reserve.

Since the news about this investigation broke shares in the company have fallen dramatically, and several shareholder rights law firms are planning to do their own investigations.

Prior to 2014 BBSI was self-insured for workers’ compensation claims, and when California made their reforms their California policies were moved to the ACE Group. Heather Gould, BBSI’s executive director of strategic alignment, said that those workers’ comp claims will still be paid as they set up a surety bond to cover claims before that move. There is a trust fund with ACE for claims filed in 2015 and beyond. The company has been cooperative with all investigative efforts and says they are taking the allegations seriously.