NEW YORK (CNNfn) - The Securities and Exchange Commission has launched an informal probe of Sunbeam Corp., according to a published report Monday.
The agency is seeking to determine whether the ailing appliance maker's accountants may have tweaked the bottom line to make 1997 earnings look stronger than they actually were, the Wall Street Journal reported.
The investigation, which SEC officials declined to confirm or deny, is said to be in its early stages.
Speculation about questionable bookkeeping at Sunbeam gained force after an article appeared in the June 8 issue of Barron's alleging that accounting gimmicks may have helped disguise the extent of the company's financial woes.
On June 13, Sunbeam's independent board of directors ousted the firm's tough-talking chief executive officer, Albert Dunlap, citing concerns over his leadership ability and the company's deteriorating financial condition.
Dunlap had slashed about half of Sunbeam's workforce of 12,000 since his arrival at the company in July 1996. Yet his aggressive downsizing did little to make the company profitable. On the day they fired Dunlap, the directors also said they expected the company to incur a second-quarter operating loss, reversing a previous forecast.
Since March, Sunbeam's (SOC) stock has swooned, plummeting from a high of 53 to 8-3/4 in composite trading on the New York Stock Exchange Monday morning.
Sunbeam also has been the target of several shareholder lawsuits in recent months asserting that the company artificially inflated sales of barbecue grills to retailers in 1997.
Sunbeam says it is confident its accounting practices were in compliance with generally accepted accounting principles.