10/21/2002 11:00PM

Gemstar under SEC scrutiny


Gemstar-TV Guide International, the parent company of horse racing broadcaster Television Games Network, is the target of a formal investigation by the Securities and Exchange Commission, Gemstar announced late Monday.

The SEC is investigating whether Gemstar has violated any federal securities laws. After informal talks with SEC investigators this summer, Gemstar restated its 2001 financial results in August after admitting that it recorded licensing revenue that it never actually received. The company also improperly recorded some advertising revenues.

"The company intends to continue to fully cooperate with the SEC as it moves forward in its process," a statement from Gemstar said.

Television Games Network is a subsidiary of Gemstar, which produces interactive television program guides. The company's largest shareholder is Rupert Murdoch's News Corp., which recently engineered a shake-up of Gemstar's top management.

Gemstar has been punished by Wall Street for its accounting problems and recent massive write-offs. Its stock has traded as high as $31 in the past two years, but on Tuesday, it closed at $3.20, down 46 cents, or 12.6 percent, for the day.