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Regulatory Inquiries Costing Gunmaker a Pretty Penny

By Eric Lipman

Enjoy reading SEC filings? Neither do I. Luckily, there are some people who do, and sometimes they let us know when they find something interesting. To wit, yesterday the Legal Literacy Blog had a post on firearms company Smith & Wesson's most recent 10-Q. The report reveals that S&W spent a good chunk of $2.6 million dealing with SEC and Foreign Corrupt Practices Act investigations: Operating expenses in the firearm division for the three months ended July 31, 2010 increased over the comparable quarter last year because of spending on our investigations of the FCPA and SEC matters and, to a lesser extent, on improvements made to our customer acceptance process, which totaled $2,629,000. The FCPA investigation referred to involves the indictment of S&W's Vice President of Sales, Amaro Goncalves, as discussed in detail on the FCPA Professor Blog in July. Not surprisingly, the report also has a lengthy section describing pending and recently concluded litigation involving the company. Bottom line -- lawyers ain't cheap and public companies are still keeping some of them pretty busy.

Full post as published by Legal Blog Watch on October 01, 2010 (boomark / email).