SEC ends Motorola investigation
The Securities and Exchange Commission said Monday that it settled an investigation of Motorola Inc., alleging that the company’s director of investor relations violated disclosure regulations, but did so under direction from the company’s legal counsel. The SEC said that since the legal advice was sought and given in good faith that the company would not face fines or other legal action.
The SEC investigation stems from phone calls that the company’s director of investor relations made between March 6 and March 12, 2001, to industry analysts, warning them that the company’s public statement Feb. 23 of “significant” sales declines meant a decline of at least 25 percent. Motorola’s investor relations director first consulted the company’s legal counsel, however, before making the calls to ensure the move was legal.
The SEC said that because of the erroneous legal advice it would not start a formal enforcement action, although Motorola engaged in prohibited conduct.