Metris (MXT) has been notified that the staff of the Securities and Exchange Commission plans to recommend that a civil injunction be brought against the company for possible violations of federal securities laws.
In a press release late Tuesday, Metris said it received what's called a Wells notice from the SEC staff in connection with an investigation the company disclosed in August 2003. The probe concerns the company's reporting and treatment of its allowance for loan losses for 2001, its valuation of retained interests in loans securitized and other matters.
The Wells notice also covers the company's current chief executive, David Wesselink, and its controller, Mark Wagener. Recipients of these notices can respond to the SEC staff before a formal recommendation is made on whether any action should be brought by the agency.
Metris, based in Minnetonka, Minn., is a credit card issuer. The company's shares were down 58 cents, or 4%, to $14.22.