SEC Launches Cablevision Probe - Multichannel

SEC Launches Cablevision Probe

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Cablevision Systems Corp. said late last Thursday that it received a formal order of investigation from the Securities and Exchange Commission regarding accounting problems at its American Movie Classics unit.

In a filing with the SEC, Cablevision also said it received a subpoena from the SEC in connection with the investigation.

“[Cablevision] cannot predict how long these investigations will last or their outcome,” the Bethpage, N.Y.-based MSO said in the filing. “The company is cooperating fully and intends to continue to do so.”

In the terse filing, Cablevision added that the independent investigator the MSO hired to look into the matter had retained PricewaterhouseCoopers LLC as forensic accountants.

The SEC investigation was expected after Cablevision announced that it had uncovered accounting irregularities at the AMC unit -- part of its Rainbow Media Holdings Inc. programming subsidiary –- last month.

Cablevision said that as part of its own investigation, it discovered that AMC was accruing marketing expenses at improper times and added that certain employees were “fabricating invoices.”

As a result of its internal investigation, Cablevision fired 14 employees at the AMC unit, including division president Kate McEnroe.

Earlier this month, a report in Newsday said Cablevision was the subject of an investigation by the U.S. Department of Justice.

The amount of the improper accruals was minimal -- about $18 million over three years -- and Cablevision said it would not require a restatement of its financial figures.

Investors appeared to shrug off the news. Cablevision stock was up 68 cents per share in early trading Monday to $22.68 each.

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