Securities Sleuth

Sonic Solutions (NASDAQ: SNIC) Will Restate

The ongoing backdated options scandal continues to haunt investors in certain companies, in particular those companies that need to result their financials as a result of improper backdating.  The latest example is Sonic Solutions (NASDAQ: SNIC).  On February 1, 2007 the Company disclosed that it was investigating its stock option granting practices.  Not surprisingly, the stock dropped in heavier than usual volume.  But yesterday, after the close of trading the Company stated that it will restate its financial statements for certain, as yet not determined periods. As you would suspect, Sonic Solutions stock dropped today again on heavier than normal volume.

We are investigating this matter and affected shareholders may wish to contact us.

New Century Financial (NEW) To Restate

Not all REITs are performing well, but almost all have been reporting their financials accurately.  This, however, isn’t the case with Irvine, CA-based New Century Financial Corp. (NYSE: NEW).  Its investors were stunned to learn February after the close of trading that it will restate its financial results for the quarters ended March 31, June 30 and September 30, 2006to correct errors the company discovered in its application of generally accepted principles regarding the company’s allowance for loan repurchase losses. Not surprisingly, its stock plummeted on this news.  

It appears that investors who purchased between April 7, 2006 and February 7, 2007, are affected and we are investigating options for affected investors.

Insider Sales by Nutrisystem (NTRI) Before Drop

Last October Nutrisystem (NTRI) represented that it was “in a high-growth mode” and had a “proven ability to identify and penetrate new market segments.”  But while the Company was representing it had a great future, its insiders were selling – they weren’t buying. 

Specifically, in the last 6 months insiders sold approximately 317,000 shares and did not buy any stock.  In November and December 2006, there were numerous insider sales, including the CEO and the CFO.  So, when on January 30, 2007, Nutrisystem disclosed its projected earnings for the first quarter of 2007 were well below the expectations of many analysts, it isn’t surprising that it stock plummeted.  Specifically, its stock declined from $57.84 at the close on January 29, 2007 to a close on January 31, 2007 of $44.05 – a drop of 24%.  We are investigating and it appears that investors who purchased between October 24, 2006 and January 29, 2007, are affected.