Beazer Homes Receives Federal Subpoena

| About: Beazer Homes (BZH)

In a filing with the SEC yesterday, Beazer said it received a federal grand jury subpoena (requested by the U.S. Dept. of Housing and Urban Dev.) for documents related to its mortgage origination services. However, Beazer said no requests for documents have been made by the FBI, or IRS, contrary to an FBI spokesperson's statements. Beazer-Homes-BZH-03-29-07 Beazer said it is cooperating with the U.S. Attorney's Office investigation, which so far has not made allegations of wrongdoing by Beazer. Reuters quotes a BoA Securities analyst who says, "We believe many buyers entered into aggressive mortgages due to the stretched affordability in many markets, but we think it may be difficult to prove fraud." A JP Morgan analyst noted the difficulty of predicting legal outcomes, but says it could be a focused case and any fines would be immaterial to the company. Beazer's shares gained 1.8% to $29.28 in normal trading yesterday, but lost .6% to $29.11 in after-hours activity.

Sources: Beazer SEC filings, Bloomberg, Reuters, MarketWatch
Commentary: Financial Sector: Sometimes Bad Gets WorseBeazer Homes Down 17%: Taking Advantage of the PanicBeazer Homes Plummets on Fraud Investigation
Stocks/ETFs to watch: Beazer Homes (NYSE:BZH). Competitors: KB Home (NYSE:KBH), Lennar Corp. (NYSE:LEN), D.R. Horton Inc. (NYSE:DHI), Pulte Homes (NYSE:PHM), Centex (CTX). ETFs: iShares Dow Jones US Home Construction (NYSEARCA:ITB), SPDR Homebuilders (NYSEARCA:XHB)

Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.

About this article:

Tagged: , , , Residential Construction
Want to share your opinion on this article? Add a comment.
Disagree with this article? .
To report a factual error in this article, click here