Embattled money manager
took it on the chin Wednesday, announcing a multiquarter earnings restatement that sent its stock reeling 30%.
The company, which fought and lost a heated proxy battle with activist investors this summer, said it misclassified restricted stock grants on its balance sheet. The restatement, which will affect 2004 and the first quarter of 2005, involves moving the grants to paid-in capital and unearned compensation.
They had previously been shown as accrued incentive compensation and incentive compensation expense. BKF said the action wouldn't affect its earnings statements.
In relatively heavy volume of 1.4 million shares, the stock lost $7.41 to $17.11.
BKF said the restatement was approved by Ernst & Young, its auditor last year, and Grant Thornton, its auditor this year.
The news came a day after BKF said its John A. Levin subsidiary was dropping its so-called "event-driven" portfolio, a hedge fund strategy that tries to profit off corporate news flow. Two senior portfolio managers, Henry Levin, son of the unit's former CEO, and Frank Rango will leave the firm next year.
BKF was the target of a bitter proxy battle led by hedge funds Steel Partners and Cannell Capital. In June, the funds won board seats with the company.