SEC Query Downplayed by Kaypro : Officials Admit Being Questioned

Investigators from the Securities and Exchange Commission questioned Kaypro Corp. executives last summer, the company confirmed Monday.

Both company and SEC officials refused to discuss details of the inquiry, however, and would not comment on whether it sparked a formal investigation.

“The SEC has not physically been at Kaypro (but) they had a conversation with us,” according to Kaypro controller Robert Gorski, who downplayed the conversations and suggested that the federal agency often contacts “any public company with documents on file with (it).” The SEC’s interest in Kaypro was disclosed Sunday in the San Diego Union.

SEC interest in the Solana Beach-based computer manufacturer may have been sparked by six lawsuits by shareholders that allege that Kaypro violated federal and state securities laws during a $40-million offering in August, 1983, according to sources familiar with the company.

Lawsuit Allegations

The lawsuits allege that Kaypro’s offering prospectus contained “misrepresentations and material omissions” that misled investors about the value of Kaypro’s stock, which began trading at $10 but soon dropped to less than $5. It closed Monday at $1.50, down 25 cents.

“We’re in discovery and we’ve got our class certification,” said San Diego attorney William Lerach, who filed lawsuits on behalf of some Kaypro shareholders last year.

Lerach said he was unaware of any SEC involvement in the case.