Securities and Exchange Commission
launched a formal investigation into accounting, compensation and stock-trading issues at
, the company said Monday.
The SEC sent subpoenas seeking documents relating to Zale's accounting for extended service agreements, leases and accrued payroll, as well as executive compensation, earnings guidance, stock trading and the timing of certain vendor payments, according to the company.
"The company believes that its accounting complied with generally accepted accounting principles and is reviewing the matter," Zale said. "The company will cooperate fully with the SEC's investigation."
On Jan. 30, Zale announced that CEO Mary L. Forte resigned, naming board member and turnaround specialist Betsy Burton interim chief. On Feb. 17, the company announced the resignation of Paul Leonard, the former president of Zales Jewelers.
Shares fell $1.30, or 4.9%, to $26.50 early Monday.