I agree, it doesn't make sense, but although some people are very adept at acquiring companies and setting up the initial structure, they are just incompetent when it comes to keeping the company running.
They were up to date on all their SEC filings which is the most surprising thing to me, but the problem that flagged the SEC was they issued estimated profit, revenues, or values with no documentation to back it up. That was a big mistake.
Sterling failed CEO 101, lol