While not yet implied, OCZ may have broken the law at some pointOCZ rather questionably delayed some financial reports, and published some press releases that raised red flags in regard to how well its finances have or have not been going. Thus, the SEC is getting involved.
SEC is the abbreviation for Securities and Exchange Commission, a federal agency whose role is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.”
OCZ entered its radar when it failed to provide some financial reports on time, and when it disclosed financial results much weaker than it foresaw.
SEC is essentially trying to find out if OCZ falsified or accidentally posted reports modified to maintain its image.
OCZ is, after all, one of the world's better-known suppliers of solid-state drives, and it wants to stay that way.
Fortunately, the SEC doesn't actually think any wrongdoings have taken place, which is arguably fortuitous, since the IT industry already has more than enough legal fights to give it flavor.
In fact, OCZ was the one that contacted the SEC and fully expected the investigation to take place.
“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,” said Ralph Schmitt, president and chief executive officer of OCZ.
The first instance when a law firm hypothesized that OCZ might have said some blatant lies in its financial disclosures was in October.
After the report on September 5, when the company announced much lower revenue than expected for the second quarter of Fiscal Year 2012 ($110 million versus $140). Its financial report should have come soon afterwards, but it was delayed until October 10, and then delayed again for some reason, as estimates further decreased.
There is no telling how things will go now that SEC has become involved.