Office Depot Settles With SEC

Office Depot, its CEO Stephen Odland, and former CFO Patricia McKay have agreed to pay more than $1 million to settle Securities and Exchange Commission charges that the company gave analysts and others a heads up that it would fall short of its Q2 2007 earnings estimates. No one is confirming or denying any wrongdoing.

“According to the SEC, company executives discussed how to encourage analysts to revisit their second quarter forecasts. The office supplier then signaled to analysts that it would not meet expectations, and analysts lowered their estimates,” Reuters reports.

In 2000, the S.E.C. adopted Regulation FD – fair disclosure rules – to prevent publicly-traded companies from sharing “material” information with a select few.

Because the officials did not directly contact analysts, “the Office Depot case represents a new front in enforcement of Regulation FD,” S.E.C. officials told the New York Times.