07/23/2007

Associated Press

Beazer Homes USA Inc. said Monday that an informal Securities and Exchange Commission inquiry to determine if any person or entity related to the company violated securities laws has become formal.

The Atlanta-based homebuilder said in an SEC filing issued after the market closed that on Friday it received a "formal order of private investigation" issued by the SEC in this matter.

"Beazer Homes will continue to cooperate fully with the SEC regarding this matter," the company said in the filing.

It did not elaborate on the review.

On May 3, Beazer Homes disclosed that an informal inquiry had been initiated by the SEC.

Beazer Homes also previously said it had received a subpoena from federal prosecutors in western North Carolina focused on the company's mortgage origination services. The company said it was cooperating with that probe.

While it didn't give details of the SEC review in May either, in the earlier filing Beazer Homes also disclosed that it had received notice that a class-action complaint was filed on behalf of present and former participants and beneficiaries of the Beazer Homes 401(k) plan naming Beazer Homes and certain of its current and former officers and directors as defendants.

The complaint was filed in federal court in Atlanta, Beazer Homes said in May.

The complaint alleged breach of fiduciary duties, including those set forth in the Employee Retirement Income Security Act because retirement monies held by the 401(k) plan were invested in Beazer Homes stock at a time when participants were allegedly not provided timely, accurate and complete information concerning Beazer Homes.

Beazer Homes said at the time that it had found no evidence to support the allegations and intended to vigorously defend itself.

Previously, Beazer Homes said the audit committee of its board of directors had launched a review of the company's mortgage origination business related to a federal fraud investigation. Regarding that matter, the company has said it found no evidence to support allegations of possible fraud in the company's mortgage lending practices and other transactions.

Beazer Homes has recently suffered hefty losses amid a downturn in the housing market.

Beazer Homes shares fell 86 cents, or 4.4 percent, to close at $18.76 on Monday. In after-hours trading, its shares fell another 76 cents, or 4.1 percent, to $18.