SEC Opened Investigation into TheStreet.com Earlier This Month

Thestreet.com announced earlier today that they would be delaying the filing of their annual report due to an investigation by the SEC.

The Notification of Late Filing for their Form 10-K included this snippet:

"As a result of the need for the Company and its independent registered public accounting firm to focus attention on matters related to the Company's previously-announced review of the accounting in its former Promotions.com subsidiary, which subsidiary the Company sold in December 2009 -- including matters related to the preparation and filing by the Company in February 2010 of a Form 10-K/A for the year ended December 31, 2008, a Form 10-Q/A for the quarter ended March 31, 2009 and Forms 10-Q for the quarters ended June 30, 2009 and September 30, 2009, respectively, and matters related to an investigation commenced by Securities and Exchange Commission in March 2010 -- the Company requires additional time  to prepare its financial statements, assess its internal controls and file its Form 10-K for the year ended December 31, 2009 ("2009 Form 10-K").  The Company expects that it will be able to file its 2009 Form 10-K on or before the fifteenth calendar day following the prescribed due date."

Basically - Thestreet.com used to own Promotions.com, which was sold this past December. Some accounting issues popped up (more specifically, issues with how revenues were being recorded). Thestreet.com announced that there would be an internal probe, which resulted in several quarters worth of earnings statements being delayed and previous results needing to be restated.

TheStreet.com concluded its review earlier this year and finally released its Q2/09 and Q3/09 earnings reports on January 25th, as well as a restatement of financial reports "for all of 2008".

However, the SEC decided that it wasn't satisfied with the results of the company's internal probe, and decided earlier this month that they wanted to launch their own investigation.

Thestreet.com is the home of Jim Cramer, star of "Mad Money" and former hedge fund manager. The site was founded in 1996, went public in May of 1999 and currently trades for $3.25.

Source: Thestreet.com - Thestreet Restatement Draws SEC Review

Filed under: General Market News