NEW YORK (Reuters) - KB Home shares fell nearly 6 percent Monday, the first trading day after the homebuilder said it was being investigated by the U.S. Securities and Exchange Commission over possible accounting and disclosure issues.
The SEC staff notified the company on October 2 that a formal order of investigation had been issued, KB Home said in an SEC filing on Friday. The Los Angeles-based company said it was cooperating with the SEC.
SEC staff told the company its investigation should not be construed as an indication that there had been any violation of federal securities laws, according to the filing.
KB Home did not immediately return calls seeking comment.
It was not clear from the regulatory filing what the focus of the SEC investigation was, Pali Capital analyst Stephen East said in a note to clients.
Areas of interest could include options backdating, joint venture accounting, inventory impairment accounting and KB Home's mortgage operations, East said, adding the probe was unlikely to focus on recent practices under "forthright" Chief Executive Officer Jeff Mezger.
In March, former CEO Bruce Karatz was indicted on charges of fraud and making false statements to U.S. regulators about a scheme to inflate the value of stock options.
KB Home shares were down 95 cents, or 5.8 percent, at $15.51 in early trading on the New York Stock Exchange.
(Reporting by Nick Zieminski and Paritosh Bansal; Editing by Lisa Von Ahn)
