SEC investigating GT Advanced sapphire business, securities trading

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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.