Thursday, March 18, 2010

Is There a Mole at Street.com Leaking to the SEC?

NyPo is reporting on an SEC investigation at Street.com:

The publicly traded company attracted the attention of regulators because of accounting woes at a former subsidiary called Promotions.com, TheStreet.com said yesterday...

Last summer, TheStreet.com announced there were "issues" related to how it had been recording revenue at Promotions.com, the marketing company it acquired in 2007. An internal probe ensued and resulted in several quarters of delayed earnings results for the parent company, frustrating investors.

In recent months, TheStreet.com seemed to be coming into the clear. In December, it announced that it had sold its "membership interest" in Promotions.com for $3.1 million in cash and notes. And in January, it filed its long-awaited second- and third-quarter results for 2009 after announcing it had finally concluded its review, which went back to 2008 earnings.


But just as things appeared to be getting back to normal, earlier this month the SEC asked to have a second look at the findings of TheStreet.com's internal probe, said a person close to the company.
If the SEC taking a "second look," this  to me means either that the SEC is out to get Cramer, or there is a snitch inside Street.com leaking dirt to the SEC. The chances that the SEC actually found something on their own in a routine, non-political, investigation is slim to none. The SEC wouldn't be able to find fog in San Francisco, on their own.

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