Business information software company Business Objects SA has received a notice from the US Securities and Exchange Commission (SEC) that the federal regulator intends to recommend a civil action against the company for possible violation of U.S. securities law.
The notice is in relation to an investigation into whether Business Objects violated reporting requirements, according to Anne Guimard, the company's spokeswoman in Paris. The company has joint headquarters in San Jose, California, and Paris.
"The SEC is looking into the reporting policy of the company, regarding its backlog of unshipped orders," Guimard said Wednesday. "That is information that Business Objects does not release and no one in the software industry does." Guimard said Business Objects did not know what prompted the SEC investigation, but that the company would vigorously defend its position.
The company said on Wednesday it had received a "Wells Notice" from the SEC on Tuesday and now has two weeks to issue a written reply explaining why it believes the SEC should not bring an enforcement action.
The SEC investigation does not involve revenue recognition issues and the proposed action would not assert claims under the anti-fraud provisions of the securities laws, the company said.
Representatives from the SEC, in Washington, D.C., could not immediately be reached for comment.
According to an explanation of the Wells Process on the SEC Web site, after the SEC receives the written reply from individuals under investigation, SEC staff make a formal recommendation for or against civil action.