Another brush with regulators sends XM's (XMSR) stock down 4%.

The woes continue for the Washington, D.C., pay radio shop after it disclosed in a filing Tuesday that the

Securities and Exchange Commission

is probing its books.

The company says it was asked to provide the agency with subscriber targets, costs associated with attempting to reach those targets, and related matters during the third and fourth quarters of 2005. XM says it is cooperating with the regulators.

XM has been accused in a lawsuit of misleading investors by promising to reduce subscriber acquisition costs and hit a 6 million user target. The lawsuit accuses the executives of artificially inflating the stock and selling shares prior to a release of fourth quarter results that showed steeper-than-expected losses.

The company has said that the lawsuit had no merit. In the filing Tuesday, the company says the SEC's informal inquiry appears "to pertain to matters similar to the issues underlying" the lawsuit.

The news comes as the company has been working with the Federal Communications Commission to resolve radio signal emission violations with its FM transmitters. The emission troubles caused the company to halt production of several radio models.

The company has been losing market share to rival

Sirius

(SIRI) - Get Report

as retail sales have helped the New York broadcaster start to close the subscriber-roll gap between the two players.

XM shares fell 47 cents to $12.31 Wednesday.