SEC Probes Taser Stun-Gun Order

Taser International Inc. said Friday that the Securities and Exchange Commission was investigating its claims about the safety of stun guns and a December order. Its shares fell 18%.

Taser said it was cooperating with the informal SEC inquiry and was compiling information requested by the agency. The probe follows reports in states including California, Indiana and Texas of deaths that occurred after people were shocked with a Taser.

“The Taser has not been the primary cause of death in any of the deaths listed,” company President Tom Smith said Friday. “We have come out and said it’s generally safe and effective if you’re going to have to stop somebody that’s being violent.”

Tasers may have contributed to more than 70 deaths, human rights group Amnesty International said in November. Taser International denies any connection and says its weapons have been deemed safe by British and U.S. governments. Shares of the Scottsdale, Ariz.-based company more than quadrupled last year as demand for security products surged.

The company on Dec. 20 announced an agreement with firearms distributor Davidson’s Inc. that included a $1.5-million order for 1,000 consumer stun guns and other Taser products. Such “large end-of-quarter deals” often get scrutiny, said analyst Rob Miceli of Gradient Analytics in Scottsdale.

“Primarily we were concerned on the timing of it,” Miceli said. “And the fact that the size of it represented substantial sales of the consumer [model]. Only 100 had been sold, and this was 1,000 of them.”

Taser shares fell $4.90 to $22.72 on the New York Stock Exchange.

Smith said Taser booked the revenue from the Davidson’s order when it was shipped. Davidson’s placed the order after a 60-day test-marketing program, received the shipment Dec. 29 and hasn’t been contacted by the SEC, said Bryan Tucker, Davidson’s chief executive.

“They were very successful in the test market,” Tucker said. “If we had the chance to get the exclusive, we were thinking this is a great deal. Why would Davidson’s do this with an unproven product?”