Monday, February 21, 2005
Alcoa Inc. disclosed in its annual report (available here) filed on Friday, Feb. 18, that the SEC has begun an informal investigation of the company's accounting for "certain trade payables financing." The company paid some vendors through intermediaries, and the issue is whether the company classified properly its payments and any discounts received. Alcoa's annual report states:
On January 28, 2005, in the context of an informal investigation being conducted by the staff of the Securities and Exchange Commission (SEC) relating to certain trade payables financing, the company received a request for the voluntary provision of documents and related information concerning the classification and disclosure of certain trade accounts payable transactions for periods beginning after December 31, 2002 that involve, directly or indirectly, an intermediary. The SEC staff has advised the company that the inquiry should not be construed as an indication by the SEC or its staff that any violations of law have occurred, or as an adverse reflection upon any person or security. Alcoa is fully cooperating with this inquiry.
Jurist has additional information on the investigation. (ph)