Shareholders of a Chattanooga-based shopping center developer lost nearly $150 million in market value Wednesday after a report that federal law enforcement officials are probing the company for alleged accounting fraud.
Shares of CBL & Associates Properties Inc. fell 8.38 percent to close at $9.40, which equaled its low for the year. For a time, shares were down more sharply after The Wall Street Journal reported that the FBI and Securities and Exchange Commission are investigating the business.
Also, several law firms have said they’re investigating potential securities claims on behalf of CBL shareholders resulting from the allegations, which could result in lawsuits.
CBL denied any wrongdoing after the Journal’s report, which said the agencies are focusing their examination on whether CBL officials falsified information on financial statements to banks when applying for financial arrangements.
Citing unnamed sources, the report said law enforcement officials have talked to former CBL employees who alleged the company inflated its rental income and properties’ occupancy rates.