Office Depot has reached a proposed settlement with the U.S. Securities and Exchange Commission to resolve an SEC inquiry that commenced in July of 2007.
According to an Office Depot SEC filing, the investigation focused on contacts and communications with financial analysts, inventory receipt and reserves, timing of vendor payments, certain intercompany loans, certain payments to foreign officials, inventory obsolescence and timing and recognition of vendor program funds.
Under the proposed settlement, Office Depot, without admitting or denying liability, has agreed to pay a civil penalty and to consent to a cease and desist order from committing or causing violations of Regulation FD and Sections 13(a) and 13(b) of the Securities Exchange Act of 1934 (and related rules) which require the maintenance of accurate books and records and internal controls.
Regulation FD was adopted by the SEC in 2000 with the goal of addressing the selective disclosure of information by publicly traded companies. Regulation FD provides that when an issuer discloses material nonpublic information to certain individuals or entities—generally, securities market professionals, such as stock analysts, or holders of the issuer’s securities who may well trade on the basis of the information—the issuer must make public disclosure of that information.
According to Office Depot, the proposed settlement is contingent on the review and approval of final documentation by the company and the SEC staff, and is subject to approval by the SEC Commissioners.