AppleInsider Staff
In an attachment to its quarterly 8-K filing, GT Advanced Technologies said the U.S. Securities and Exchange Commission is conducting an inquiry into the company's security trading practices and sapphire business.
According to the brief, the SEC informed GTAT of the inquiry in a letter dated Oct. 15, which also requested the company preserve and provide documents germane to the investigation.
At question is GT's securities offerings and general sapphire business going back to Jan. 1, 2013, months before the company announced it had struck a deal to supply Apple with the hard material. Apple was to pay $578 million to build out an advanced sapphire production facility in Mesa, Ariz., which GTAT would use to churn out product for future devices.
GTAT filed for Chapter 11 bankruptcy protection on Oct. 6, one week prior to the SEC's formal probe notice. Soon after the bankruptcy filing, which caused GTAT stock to dive over 90 percent, CEO Tom Gutierrez came under scrutiny for selling off $160,000 worth of company stock in early September. It is unclear if the action is part of the SEC probe.
In a statement last month, GTAT COO Daniel W. Squiller placed blame on Apple, saying the tech giant imposed "unsustainable" contract terms that resulted in a $461 million loss for the firm. Squiller cited higher than expected manufacturing costs, technical hangups and production deficiencies as main contributors to the deal's downfall.
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21 Comments
Now that the SEC has stepped in on this mean the management may have done some insider trading.
Rut Roh, Raggy...
[quote name="Maestro64" url="/t/183290/sec-investigating-gt-advanced-sapphire-business-securities-trading#post_2635992"]Now that the SEC has stepped in on this mean the management may have done some insider trading.[/quote] [I]May have[/I] can be applied to pretty much anything. I think the sales are suspect but I'm [I][U]not[/U][/I] going to go Full Sog by accusing them of breaking the law without some compelling evidence. Now, claiming they acted in an unethical manner, that territory is more loose, ethics can vary from person to person, and I'd say wager there is something shady going on with the stated timeframes of sales, the statements of future output, and when they filed for bankruptcy.
I think everyone, including Apple, saw this coming. GT's public face has been one of diverting blame, especially to Apple. However prior to filing for bankruptcy protection GT did not inform of their unstable position to share holders and the senior management sold significant volumes of shares before the announcement. Meanwhile Apple have been incredibly compromising to GT such as free premises rental, not enforcing advantageous contractual conditions, settling to a zero interest drawn out repayment plan and even agreeing to drop certain secrecy clauses from the settlement. I think the SEC investigation will reveal just how bad GT have been.
Sog's in a forgiving mood today though. He was just saying that bringing up criminal convictions and pardons for the Samsung CEO was just getting too personal.