Barnes & Noble Reveals SEC Probe, Stock Down

(RTTNews) - Barnes & Noble Inc. (BKS) revealed that the Securities and Exchange Commission commenced an investigation on its accounting practices. Following the news, shares of the bookseller plunged 12 percent on Friday's regular trading on the New York Stock Exchange.

Barnes & Noble, in a SEC filing, said that the commission is investigating on the the company's decision to restate its earnings announced on July 29, 2013. SEC is also probing on a former employee's allegation that Barnes & Noble improperly allocated "certain Information Technology expenses" between its Nook and retail segments for purposes of segment reporting.

Barnes & Noble noted that the SEC notified the company on October 16, 2013, that it had commenced the investigation. The company said it is cooperating with the SEC, including responding to requests for documents.

Barnes & Noble in the filing said that it had incorrectly overstated certain accruals for the periods prior to April 27, 2013, as a result of inadequate controls over its Distribution Center accrual reconciliation process.

BKS closed Thursday's trading at $14.43, down $1.96 or 11.96%. In the after hours, the stock is up $0.03 or 0.21%.