SiliconBeat

West Marine received notification from the SEC Jan. 14 that the agency’s informal inquiry begun in August into facts surrounding West Marine’s restatement of financial results “will continue under a formal order of investigation,” according to an 8-K filing Wednesday.

In May, West Marine completed a restatement financial results for fiscal years 2002 through 2005 and for the first three quarters of fiscal year 2006 related to inventory issues.

The SEC’s original informal inquiry began in August, and West Marine provided materials about the restatement to the agency in October, when we first flagged the news. The SEC staff then requested “additional materials relating to our inventory accounting practices from 2001 to 2006, among other things.”

West Marine shares are down 18 percent so far this year after losing nearly half their
value in 2007, as the company struggles with declining year-over-year sales for the past four quarters.