LOS ANGELES, Oct. 13 (UPI) -- The U.S. Securities and Exchange Commission is investigating KB Home for possible accounting and disclosure issues, the company disclosed.
KB Home, one of the largest home builders in the United States, revealed the investigation in a quarterly regularity filing Friday and confirmed it in an e-mail Monday, the Los Angeles Times reported.
"The SEC order does not specify the subject matter, and we cannot speculate on it at this time," KB Home spokeswoman Heather Reeves said in the e-mail.
Former KB Home Chief Executive Bruce Karatz faces trial in federal court on charges of fraudulently manipulated stock options. He resigned in 2006 after an interval investigation concluded he backdated stock option grants to generate a pay raise for himself, and agreed in 2008 to pay more than $7 million -- but did not admit wrongdoing -- in a settlement with the SEC, the newspaper said.
KB Home shares fell $1.29 Monday -- an 8 percent drop -- to $15.17.
The company's quarterly filing noted a "general oversupply of new and resale homes, exacerbated by rising mortgage delinquencies and foreclosures continued to depress prices and intensify competition," and said high unemployment, tight mortgage lending policies and "weak consumer confidence" are affecting demand for housing.
