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Apr 17

SEC clears Zale...again

Posted by Stephen Taub in Riskprepaid advertisingloss carryforwardscomplianceaccounting manipulationaccounting fraudAccounting

Stephen Taub

The Securities and Exchange Commission told Zale it has completed its investigation of the company and does not intend to recommend any enforcement action.

"We are glad to share with our investors and employees that this matter is now behind us as we continue to focus on returning our business to profitability," said Theo Killion, Chief Executive Officer of the jewelry retailer, in a statement.

The SEC launched the investigation after the company restated its results for 2008 and several quarters in 2009 due to accounting errors related to prepaid advertising and loss carryforwards.

This is not the company's first brush with regulators in recent years.

Back in September 2006, Zale said the SEC ended a probe of the jewelry retailer and that no enforcement action was recommended.

The company had announced in April of that year that the regulator was investigating the timing of certain vendor payments, as well as other matters including accounting for extended service agreements, leases, and accrued payroll; executive compensation and severance; earnings guidance; and stock trading.

In May 2006, Zale put senior vice president and chief financial officer Mark Lenz on administrative leave, alleging he had failed to disclose a delay in payments to vendors in a timely manner. At the time, the company named George Mihalko acting chief financial officer, acting chief administrative officer, and a member of the board of directors.

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