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SEC Drops DreamWorks Probe

5 May, 2006 By: Erik Gruenwedel

DreamWorks Animation May 4 announced it was notified by the Securities and Exchange Commission that “no enforcement action” has been recommended in the regulatory agency's year-long probe of the studio's earnings.

The publicly traded animation unit came under federal scrutiny following reports DreamWorks CEO Jeffrey Katzenberg had informed employees the company would miss quarterly earnings projections prior to their release May 10, 2005, after the market close — a violation of SEC law.

DreamWorks posted disappointing results when it disclosed unexpected high DVD returns of Shrek 2 and Shark Tale.

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