Washington — The Securities and Exchange Commission (SEC) is looking into the method that XM Satellite Radio used to report its subscriber projections, the company reported.
XM received a letter from the SEC on Aug. 31, requesting that the company provide the federal agency with documents regarding XM’s subscriber targets, costs associated with reaching those targets and related matters during the third and fourth quarters of 2005.
XM said in a Form 8-K filed with the SEC that the questions “appear to pertain to matters similar to the issues underlying the previously disclosed securities litigation filed against us earlier this year.” XM also said it will “cooperate fully with the SEC’s informal inquiry.”
This spring, a class action lawsuit was filed by the Schatz & Nobel law firm on behalf of those who purchased XM stock between July 2005 and May 2006. The suit alleges that XM made false statements about the cost of acquiring new subscribers.