SEC Probes Abercrombie Trading

The retailer also disclosed that several lawsuits have been filed against present and former board members ''alleging various breaches of the directors' fiduciary duty and seeking equitable and monetary relief.''

High-flying teen retailer Abercrombie & Fitch Co. disclosed that the Securities and Exchange Commission has launched an informal, non-public inquiry into trading in its stock.

According to a regulatory filing, the SEC informed Abercrombie that the inquiry should not be construed as an indication that any violations of law have occurred. The company added that it is cooperating fully with the commission.

The succinct reference in the company’s quarterly report did not specify the trades the SEC is looking into or who made them.

TheStreet.com pointed out that in July, chief executive officer Michael Jeffries sold about $120 million of stock. The transactions took place after the company delivered an “upbeat June sales update,” noted the website, but before it missed second-quarter earnings estimates about a month later.

The website noted that the stock dropped from the low $70s to the high $50s. The shares have since moved up to the low $60s.

Investor anger over his sales forced Jeffries to publicly defend the transactions as being part of a personal financial plan, added TheStreet.com. “I do not have control over the movement of the stock, nor can I predict how the stock price is going to fluctuate,” he reportedly said at the time.

Reuters pointed out that a federal lawsuit filed in September charged top Abercrombie executives with making false and misleading statements that inflated the company’s share price.

In its latest regulatory filing, the retailer also disclosed that several lawsuits have been filed against present and former board members “alleging various breaches of the directors’ fiduciary duty and seeking equitable and monetary relief.” The company added that it was a nominal defendant in each of the lawsuits.

In August, president and chief operating officer Robert S Singer resigned just 15 months into the job, citing differences regarding international expansion plans. His departure came four months after chief financial officer Susan Riley left the company, citing family reasons and a desire to return home to New York.

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