SEC Investigating Mamma.com

Mamma.com (MAMA Quote) said the Securities and Exchange Commission inquiry into trading in its shares has become a formal investigation.

Mamma.com said the investigation is now considering disclosure matters as well as financial reporting and internal controls questions. Shares in Mamma.com were halted Tuesday morning on the Nasdaq.

The Montreal-based Internet search engine said it believes that "as part of its investigation, the SEC may consider matters related to trading in the Company's securities and whether an individual and persons acting jointly or in concert with him may have had a significant influence on the Company in the past as a result of undisclosed shareholdings."

The company said the influence questions are also being investigated by a special independent committee of its audit committee.

Mamma shares, which surged in early 2004 as investors rediscovered the paid search business, have plunged over the last year as the company has disclosed an informal SEC probe and a shift from organic growth to acquisitions.

The stock closed Monday at $3.65.