OfficeMax: SEC Launched Formal Accounting Probe

Office supplies retailer OfficeMax Inc. (OMX) said Tuesday the Securities and Exchange Commission (search) has issued a formal order of investigation related to the company's internal probe of its accounting for vendor income.

The company launched its own investigation in December 2004, when it received claims by a retail vendor that certain employees acted inappropriately in requesting promotional payments and falsifying supporting documents.

The internal investigation was conducted under the direction of the company's audit committee and was completed in March 2005. Six employees were fired in connection with the probe, and OfficeMax reported it had overstated cumulative net operating income in the first three quarters of 2004 by $4.3 million.

OfficeMax said it intends to cooperate fully with the SEC.

SEC spokesman John Nester declined to comment on the OfficeMax statement, saying it's the commission's policy not to confirm the existence or nonexistence of investigations.

OfficeMax is the No. 3 office products retailer behind Staples Inc. (SPLS) and Office Depot Inc. (ODP) Besides the accounting scandal, the company has been roiled by sluggish sales and the departure of three top-level officials this year.

OfficeMax shares rose 15 cents to $30.28 on the New York Stock Exchange (search), near the low end of their 52-week range of $27.82 to $38.01.