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9/22/2017 12:11:25 AM
Posted: 9/27/2005 6:30:05 AM EDT
S.E.C. Widens Probe Into Taser

By REUTERS
Published: September 27, 2005
Filed at 8:32 a.m. ET

NEW YORK (Reuters) - Taser International Inc. (TASR.O) on Tuesday said U.S. regulators have stepped up their investigation into the stun gun maker and have expanded the probe into new activities.

Skip to next paragraph The U.S. Securities and Exchange Commission has now upgraded its probe to a formal investigation, allowing it to subpoena documents. The SEC had opened an informal probe of the company over statements about the safety of its stun guns and a distribution deal struck in December 2004.

Taser also said it understands the SEC is looking into the possible unauthorized acquisition of material nonpublic information by individuals outside the company in an effort to manipulate Taser's stock price.

Taser shares were down 8.6 percent to $6.68 Tuesday in premarket trading on the Inet electronic brokerage system.

Taser has stood by the safety of its weapons, saying the stun guns have never been named as the primary cause of death when suspects were in custody.

Taser Chief Executive Rick Smith said in a statement that he hoped the SEC probe would address ``all pertinent issues,'' including what he said was data indicating that ``there may be a large, improper, naked short position'' in the stock.

Short sellers profit when a stock falls by selling borrowed shares of a company, and buying the shares back later at a lower price for return to the lender -- and pocketing the price difference.

``Naked'' short selling happens when a person sells short a stock he hasn't borrowed, which can result in what's known as a ''fail to deliver'' after the settlement date.

In that scenario, the broker who executes the sale never receives the borrowed shares to deliver them to the buyer. These unsettled trades are often overlooked by brokerage houses.

Link Posted: 9/27/2005 6:32:42 AM EDT
I thought SEC had passed on. Piccolo?
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