JP Morgan cut Network Associates (NET ) to market perform from buy.
Analyst Sterling Auty says the trigger of the SEC's investigation unknown at this point. He added that there's no time frame to a resolution. Auty also notes the company changed revenue recognition to sell through in the fourth quarter of 200, which had a big impact on revenues. He thinks this would be the focus of the proble.
While the investigation will not impact operations in his opinion, Auty says he's looking at old issues, which will be a cloud over the stock until the investigation is resolved. Auty says he'll review his rating as the visibility of the SEC review becomes clearer, and as valuation becomes more compelling, or another catalyst emerges.