SEC sends Wells notice to Business Objects
News not a big hit with investors
Business Objects, the French software company, admitted yesterday that it had received a Wells notice from the US Securities and Exchange Commission (SEC), recommending that charges be brought against the company for allegedly failing to disclose its order backlog.
The irony, of course, is that Business Objects is a maker of business intelligence software, named by The FT, business analysts and the company itself, as one of the key technology tools companies will need to help comply with corporate governance regulations.
The company confirmed it had received the notice, and said it would be responding in writing to defends its position.
In a statement, the company said its disclosures were "compliant with the security laws and are consistent with industry and general practice". It also pointed out that none of its executive staff will be named as defendants, and said it believed the inquiry was not into "revenue recognition" issues.
The SEC began investigating the company in May of this year, sending the stock price down to a 52 week low of $18.85. When the company completed its acquisition of Crystal Decisions in January this year, the value of share rose to over $38.
Yesterday's news nearly returned the stock to its lowest point as investors sold up. The shares lost 7.4 per cent of their value during trading in Paris. By midday, the shares were down six percent on the NASDAQ, hitting $19.48, but recovered slightly to close at $19.75, a loss of 4.69 per cent. ®