When the SEC inquiry was first announced, Taser President Tom Smith said regulators questioned the release of a statement in 2004 touting an independent Defense Department study that purportedly found Tasers were safe.
Taser's statement seemed to increase stock prices just before executives and directors sold $68 million in shares in November.
When the full Department of Defense study was released this year, it was revealed that Taser was involved in nearly every aspect of the study, raising questions about its independence. In addition, government researchers involved in the study said they never looked at safety.
SEC's elevation of the case from an inquiry to an investigation means federal regulators are not ready to drop the probe and now have powers to subpoena third-party individuals.
The SEC's action is the latest challenge for the company, which has seen sales of its popular stun gun slow this year following a number of deaths that have left police agencies across the country rethinking Taser purchases and, in some cases, taking the gun off the street.
Taser officials have also been criticized for paying police officers to act as Taser trainers and providing six others with lucrative stock options, and for being actively involved in a series of medical studies that were publicly described as "independent."
Smith said the SEC was also looking into the sale of 1,000 consumer model stun guns to a Prescott firearms company. Taser announced the sale on Dec. 20, just 11 days before the end of Taser's quarter. The sale appeared to help the company meet its projected earnings.
Taser's statement seemed to increase stock prices just before executives and directors sold $68 million in shares in November.
When the full Department of Defense study was released this year, it was revealed that Taser was involved in nearly every aspect of the study, raising questions about its independence. In addition, government researchers involved in the study said they never looked at safety.
SEC's elevation of the case from an inquiry to an investigation means federal regulators are not ready to drop the probe and now have powers to subpoena third-party individuals.
The SEC's action is the latest challenge for the company, which has seen sales of its popular stun gun slow this year following a number of deaths that have left police agencies across the country rethinking Taser purchases and, in some cases, taking the gun off the street.
Taser officials have also been criticized for paying police officers to act as Taser trainers and providing six others with lucrative stock options, and for being actively involved in a series of medical studies that were publicly described as "independent."
Smith said the SEC was also looking into the sale of 1,000 consumer model stun guns to a Prescott firearms company. Taser announced the sale on Dec. 20, just 11 days before the end of Taser's quarter. The sale appeared to help the company meet its projected earnings.
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