KB Home:SEC accounting probe done, no action taken

LOS ANGELES

The Securities and Exchange Commission has completed its investigation into possible accounting violations by KB Home and does not intend to recommend any enforcement action, the homebuilder said Wednesday.

The news helped lift KB Home's shares. The stock rose $1.30, or more than 12 percent, to $11.61 in afternoon trading.

The SEC launched a probe last year into possible accounting and disclosure violations by the company. KB Home said it has received a letter from SEC staff saying the probe is now over and it does not intend to recommend enforcement action against the company.

"We are glad to share with our investors and employees that the matter is now behind us, as we continue to focus on restoring the sustained profitability of our homebuilding operations and generating future growth," said CEO Jeffrey Mezger.

The Los Angeles-based company has operations in 10 states and is one of the nation's largest builders.

The company has faced regulatory scrutiny before. In September 2008, former chairman and CEO Bruce Karatz paid nearly $7.2 million to settle SEC charges of backdating stock options. The SEC had alleged that Karatz engaged in backdating practices from at least 1999 through 2005 and profited more than $6 million from exercising these options.

Earlier this year, a federal jury in Los Angeles found Karatz guilty of two counts of mail fraud, one count of lying to company accountants and one count of making false statements in reports to the SEC.