West Marine, the boating supply retailer, received a “Wells Notice” from the Securities and Exchange Commission Monday saying that the federal regulatory agency’s staff intends to recommend that a civil action be brought against the Watsonville company related to an SEC investigation into its accounting for inventory in its 2003 fiscal year.
Those actions sometimes include recommendations that current or former employees be barred from working for public companies in the future.
In May 2007, West Marine completed a restatement for fiscal years 2002 through 2005 and for the first three quarters of fiscal year 2006 related to inventory issues. Three months later the SEC started an informal review of the matter, which it raised to a “formal order of investigation” in January 2008.
In April last year the company announced that its chief accounting officer Peter Van Handel would leave West Marine effective immediately.
West Marine says it intends to “seek discussions with the (SEC) to reach a prompt resolution of this matter” after it further evaluates the Wells Notice it received three days ago.