The Securities and Exchange Commission is now engaging in a formal
investigation of Adelphia Communications Corp.'s disclosures about debt and
insider dealings, the company said Wednesday.
Previously, the SEC's inquiry had been characterized as informal -- a routine
response given recent controversy over an acknowledgement that $2.3 billion in
debt had built up in a co-borrowing relationship with a company privately owned
by Adelphia chairman John Rigas and his family.
Unbeknownst to investors, Adelphia was guaranteeing Rigas family loans used
to buy Adelphia securities.
A formal investigation means that the SEC will be making extensive document
demands from the company and interviewing, and possibly deposing, company
Adelphia has also indefinitely delayed filing its annual 10-K disclosure to
the SEC and investors, including details about the debt and asset structure of
the private Rigas family company.
Adelphia shares fell 5 percent to $7.60 apiece in early trading Wednesday,
and they are off 68 percent in the past month.
Because of the 10-K delay, NASDAQ has changed the company's ticker symbol
from 'ADLAC' to 'ADLAE.'