KB Home shares
SEC staff notified the company on October 2 that a formal order of investigation had been issued, KB Home said in an SEC filing on Friday. The Los Angeles-based company said it was cooperating with the SEC.
SEC staff told the company its investigation should not be construed as an indication that there had been any violation of federal securities laws, according to the filing.
It was not clear from the regulatory filing what the focus of the SEC investigation was, Pali Capital analyst Stephen East said in a note to clients.
Areas of interest could include options backdating, joint venture accounting, inventory impairment accounting and KB Home's mortgage operations, East said, adding the probe was unlikely to focus on recent practices under forthright Chief Executive Officer Jeff Mezger.
Asked if the SEC probe involved stock options, a spokeswoman for the company said in an email to Reuters, The SEC has not specified the subject matter and we cannot speculate on it at this time.
In March, former CEO Bruce Karatz was indicted on charges of fraud and making false statements to U.S. regulators about a scheme to inflate the value of stock options.
KB Home shares were down $1, or 6 percent, at $15.46 in afternoon trading on the New York Stock Exchange.
(Reporting by Nick Zieminski and Paritosh Bansal; Editing by Lisa Von Ahn and Steve Orlofsky)