Barnes & Noble (NYSE:BKS) shares plunged nearly 6% Friday in volatile action after the bookseller said its accounting is being probed by Wall Street's top cop.
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The New York-based company said in its quarterly 10Q filing released after the closing bell Thursday, the Securities and Exchange Commission's New York office has launched an investigation into its restatement of earnings announced on July 29.
Barnes & Noble spokesperson Mary Ellen Keating said the company "cannot comment on why the SEC is investigating the restatement." John Nester, a spokesperson for the SEC, also declined to describe the specifics, citing the commission's "practice to neither confirm or deny the existence or nonexistence of investigations."
In July, Barnes & Noble said several quarterly reports "should no longer be relied upon because of a material error contained in such financial statements." As a result, it had to restate the results for those quarters.
The SEC is also looking into a "separate matter related to a former non-executive employee’s allegation that the company improperly allocated certain information technology expenses between its NOOK and retail segments for purposes of segment reporting."
It wasn't immediately clear which employee made the allegation. Keating declined to comment on the matter.
The company said it is cooperating with the SEC's investigation, including requests for documents.
Shares of Barnes & Noble plummeted 97 cents, or 6%, to $15.38 in late-morning trading on the New York Stock Exchange.