Shares of CBL & Associates Properties Inc. lost more than 4 percent Monday after the company confirmed that the Securities and Exchange Commission is conducting an investigation of the Chattanooga-based developer.
The shopping center operator also said it has launched an internal probe, hiring Ernst & Young to conduct “a swift and thorough investigation.”
“The findings from that independent investigation will be provided to the SEC upon completion,” CBL said in a statement. “We are confident that this will bring a positive resolution to this matter.”
Shares of CBL, the owner of both Hamilton Place and Northgate malls in Chattanooga, fell 46 cents per share in trading Monday to close at $9.83 per share, down 4.47 percent.
The company said in a statement that, as a result of its efforts, officials have learned in a discussion with the SEC that it is conducting the investigation limited to four specific non-recourse secured loans originated in 2011 and 2012.
“Specifically, the purpose of this review is to ensure the information provided to lenders regarding lease status reports, revenues and expected revenues did not materially vary from the company’s financial statements,” the statement said.
CBL said the agency “welcomed our proactive outreach, as well as our commitment to commission an independent review of our procedures with respect to those loans.”
“As we’ve stated previously, at all times, our company operates with the utmost integrity and holds itself to the highest ethical standards. We have stringent policies and procedures in place to ensure all of our accounting and financial processes and reporting comply with applicable laws, rules and regulations,” the statement said.
However, several law firms have taken steps to try to recover losses they blame on CBL for alleged violations of the federal securities laws.
Last month, The Wall Street Journal reported on the investigation, citing unnamed sources. CBL denied any wrongdoing after the Journal’s report.
CBL owns or operates 145 retail properties across the country.