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SEC opens investigation of OCZ

Pressure builds
Thu Nov 22 2012, 17:42
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FLASH STORAGE VENDOR OCZ is the target of an inquiry by the US Securities and Exchange Commission (SEC) over its customer incentives programme.

OCZ recently announced that it would delay its quarterly financials and rapidly installed a new CEO to lead the firm as its stock price tanked. Now OCZ reports that it received of a letter from the SEC announcing an investigation of the firm.

According to OCZ, it received a letter and subpoena from the SEC requesting documents and press releases it issued on 5 September and 10 October along with financial reporting for its customer incentives programme. The firm said it received the letter on 15 November.

Ralph Schmitt, president and CEO of OCZ 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."

OCZ has had a troubled six months, with Schmitt announcing product cuts and a 28 percent reduction in the firm's headcount. The company also saw its stock price fall from highs of $7 in July to close at $1.19 before the Thanksgiving break.

In recent years OCZ has reinvented itself as a solid state disk (SSD) drive supplier and gained considerable popularity, thanks in no small part to its early adoption of Sandforce controllers. However the firm's recent internal troubles and now the news of an SEC investigation might dent its chances of winning high volume OEM business. µ

 

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