Original URL: https://www.theregister.com/2012/11/23/ocz_sec/

Troubled OCZ now has feds up ass with microscope

Harsh cawing of lawyers fills the air

By Chris Mellor

Posted in Storage, 23rd November 2012 10:29 GMT

Flash storage springbok OCZ, which suddenly lurched into the intensive care ward and ditched its founding CEO, now has less of a spring in its step; it's received news of an SEC probe into the company.

This is to do with OCZ's inability to file a required business report for its latest quarter - some background here - due to some customer incentive programmes which are hard to unravel. The SEC letter to OCZ mentioned other, unrevealed, matters as well.

New CEO Ralph Schmitt said:

"Since we delayed the filing of our second quarter 10-Q, we had proactively contacted the Commission and have been expecting them to conduct an investigation. We intend to cooperate fully regarding this non-public, fact-finding inquiry and are also continuing with our own internal investigation as previously announced."

Trading in OCZ shares was briefly suspended when the news came out.

Stifel Nicolaus' Aaron Rakers notes:

The company has recently stated that it would likely need additional financing. ... it is working on raising cash via inventory liquidation ... OCZ has announced a 28 per cent global workforce reduction, excluding production personnel, which has been reduced by 32 per cent including outside contractors. The company reduced its production from three shifts for six days a week to two shifts per day for five days a week. ... notification from Nasdaq provides the company until mid-December to be up to date on its financial filings.

With nearly two dozen ambulance chasing lawyers drumming up investor support for class action lawsuits against the company over share price falls when the CEO was ditched - trying to blame some improper actions by management - Schmitt has his work cut out to get OCZ back on an even keel and back to trading normally. ®