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SEC in Informal Probe of A&F

The informal inquiry is not the first time this year that there's been a focus on trading of Class A common shares.

NEW YORK — Abercrombie & Fitch said in a quarterly filing on Thursday that it is the subject of an informal inquiry by the Securities and Exchange Commission concerning trading of shares of the company’s Class A common stock.

The company said in the filing the SEC has “informed A&F that the informal inquiry should not be construed as an indication that any violations of law have occurred, and the company and its personnel are cooperating fully with the SEC.”

Calls to the company for comment were not returned by press time.

The informal inquiry is not the first time this year that there’s been a focus on trading of Class A common shares. On Sept. 2, shareholder Robert Ross filed a lawsuit seeking class action status against A&F and certain of its officers in the United States District Court for the Southern District of Ohio. The lawsuit was filed on behalf of shareholders who purchased or acquired shares of Class A common stock of A&F between June 2 and Aug. 16. Named in the lawsuit as defendants were chairman and chief executive officer Michael Jeffries; former president and chief operating officer Robert Singer, and senior vice president and chief financial officer Michael Kramer. Singer left the company in August.

Court documents charged the executives with making misleading statements that allegedly caused the stock price to inflate. It further said that Jeffries sold more than 1.5 million shares of stock in July at an average price of $70 per share. The lawsuit noted that after Jeffries sold an aggregate of 2 million shares, the stock price of A&F started to decline following weaker-than-expected July sales results, even though before that company executives allegedly spoke about the strength of the business, which caused the share prices to rise.

Shares of A&F Thursday closed at $63.31, up 81 cents, in trading on the New York Stock Exchange.

A&F also said in its quarterly filing Thursday, or Form 10-Q, that during September and October, five other purported class actions were also filed against A&F and other defendants in the same federal district court. All six cases allege claims under the federal securities laws as a result of a decline in the price of shares of A&F’s Class A common stock in the summer of 2005. A&F said in the 10-Q that it believes the cases have no merit and that it intends to vigorously defend itself in court.