Black Box Corp (BBOX)

Black Box Corp. (BBOX) said Tuesday that it has received a Wells Notice from the Securities and Exchange Commission in connection with a previously disclosed investigation by the staff of the SEC's Division of Enforcement.

The notice informs the company that the investigating staff intends to recommend that the SEC bring a civil injunctive action against the company, alleging violations of federal securities laws arising from its past stock-option practices, according to an SEC filing.

A Wells Notice is the SEC's process by which it notifies companies of potential charges and allows the opportunity for a response.
Black Box said it is evaluating the notice and "continues to cooperate with the staff with respect to the alleged violations and possible resolution of the matters in question."

In November 2006, the company said it received a letter of informal inquiry from the SEC, requesting documents related to the company's stock-option practices since January 1997. In June 2007, the company disclosed that it received a document subpoena from the SEC related to the investigation.

Generally, investigations of stock-option practices focus on backdating, in which an option's grant date is manipulated to make it appear as if it was made at a time when the company's share price was low, thus maximizing profit for the recipients.

The company also said Tuesday that its third-quarter net income slipped to $9.83 million, or 56 cents a share, from a net income of $11.3 million, or 64 cents a share, in the year-ago period.
Shares of the Lawrence, Penn.-based provider of data and voice networking products closed Tuesday at $25.11, up 4.5%.
(Dow Jones)