Sport-Haley, Inc. is pursuing settlement of claims brought against it and its former controller, Steve Auger, by the U.S. Securities & Exchange Commission. The suit, filed by the SEC in 2003, alleges that Sport-Haley misrepresented inventories, period costs, and losses on the sale of headwear equipment in financial statements for the company’s fiscal years 2000, 1999, and 1998. Counsel for Steve Auger has also filed a settlement proposal with the Denver office of the SEC.

In October 2004, Sport-Haley settled a class action lawsuit related to accounting errors for the same fiscal years. As a result of that settlement, the company’s common stockholders who comprised the class were awarded $1 million.

The SEC attorneys in Denver handling the case will recommend that the settlement proposals be approved by the full commission in Washington, D.C. The settlements would not be complete until approval is granted by the Securities & Exchange Commission in Washington, D.C., and by the Court.


>>> With the company looking for partners to go private again, they will need to clean up all these loose ends…