Office Depot to Settle SEC Charges for $1 Million
Oct 21st 2010 7:30PM
Updated Oct 21st 2010 7:39PM
Office Depot (ODP) has agreed to pay $1 million to settle Securities and Exchange Commission charges that it improperly disclosed key financial information. The company's chief executive and the former chief financial officer also will pay $50,000 each for their alleged part in the lapse.
According to the SEC, Office Depot -- under the direction of CEO Stephen Odland and former CFO Patricia McKay -- in 2007 called some individual analysts, one on one, to indicate that the office-supply retailer wouldn't meet its second-quarter earnings expectations. The move prompted some analysts to lower their earnings forecasts.
"Office Depot executives selectively shared information with analysts and the company's largest shareholders in order to manage earnings expectations," said Robert Khuzami, director of the SEC's enforcement division, in a statement Thursday. "This gave an unfair advantage to favored investors at the expense of other investors and, as today's action shows, is illegal."
The company, which had sales of $12.1 billion last year, neither admitted nor denied the charges, the SEC says. While neither Odland nor McKay were present during the calls to analysts, they were fined $50,000 each for encouraging the calls, according to the SEC, which added that they agreed to the settlement without admitting or denying wrongdoing.
Office Depot representatives didn't immediately respond to a request for comment.