Friedman's Receives SEC Warning On Possible Court Action
March 25, 04
U.S. retail jeweler Friedman's Inc said the Securities and Exchange Commission (SEC) is considering recommending a civil enforcement action in federal court against the firm, alleging it violated certain provisions of the 1933 Securities Act and the Securities Exchange Act of 1934.
Friedman's said it has received a notice from SEC's Division of Enforcement stating it may seek a permanent injunction, disgorgement with prejudgment, interest and civil money penalties.
Last November the SEC had launched a formal investigation into the company's allowance for doubtful accounts and other financial matters.
The investigation seeks to determine whether Friedman's may have issued materially false or misleading disclosures from January 1, 2000 onwards. In addition, the company is being investigated by the U.S. Justice Department.
The jeweler said last November that its historical financial statements for at least the fiscal years 2000, 2001 and 2002 and for the first three quarters of fiscal year 2003 would have to be restated.