Tuesday, January 3, 2006

Not the Quickest Disclosure

Alliance Gaming Corp., a Las Vegas company that manufacturers -- surprise -- machines used for gambling (what my mother called the one-armed bandits, but it's so much more sophisticated today, except for the bandit part) disclosed in its very late 10-K (here) filed at the end of the day on Friday, Dec. 30, that an informal SEC investigation of the company's disclosures had been bumped up to a formal investigation. The sharp eye of Footnoted.Org, a blog devoted to the interesting items buried in the SEC filings of public companies, found the change in status of the investigation, and noted the rather slow timing of the disclosure (see post here).  Alliance Gaming is a defendant in a putative securities fraud class action arising from "revised earnings guidance, declines in the stock price, and sales of stock by insiders," and the SEC investigation concerns the same issues.  According to Alliance Gaming's disclosure: "In February 2005, the SEC initiated an informal inquiry and requested documents and information regarding matters related to the allegations in the class actions and similar matters. In August 2005, the SEC notified the Company that its investigation had entered a formal phase, and has requested additional information from the Company covering the same general areas that were addressed in the informal inquiry. Management is cooperating fully with the SEC in this matter."  Gee, only four months to tell investors that the investigation is serious enough that the SEC has authorized the Division of Enforcement to issues civil subpoenas to gather information.  Can you say "material" anyone? (ph)


Investigations, Securities | Permalink

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