OCZ Technology Says SEC to Probe Customer-Incentive Program

OCZ Technology Group Inc. (OCZ), a maker of disk drives based on memory chips, said the U.S. Securities and Exchange Commission is investigating a customer-incentive program that forced the company to put off reporting quarterly results.

The regulatory agency has requested documents and information concerning the program and press releases dated Sept. 5 and Oct. 10, among other matters, the San Jose, California-based company said today in a filing. OCZ said it intends to cooperate with the investigation and will not comment further.

In October, the company postponed its fiscal second-quarter earnings filing, saying revenue for the period will be “materially lower” than previously thought. The postponement was prompted by customer-incentive programs discovered after a September preliminary announcement of earnings for the period.

Ralph Schmitt, who replaced Ryan Petersen as chief executive officer on Oct. 10, said on a conference call then that the company had been trying to increase market share “at all costs.”

Revenue for the quarter ended Aug. 31 will be less than the $110 million to $120 million forecast on Sept. 5, OCZ said in the Oct. 10 statement. The company said it expects negative gross profit margins and a significant net loss for the quarter.

OCZ fell 9.2 percent to $1.08 in extended trading at 6:37 p.m. New York time, after the company’s filing. The shares were unchanged at $1.19 at the New York close and have fallen 82 percent this year.

Bonnie Mott, an OCZ spokeswoman, didn’t immediately return a call seeking comment on the investigation.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.