U.S. SEC probes American Apparel on matter related to ex-CEO

American Apparel Inc said in a filing on Wednesday that the U.S. Securities and Exchange Commission has ordered an investigation into a potential legal violation related to its founder and former Chief Executive Officer Dov Charney.

The filing said the investigation is a non-public, fact-finding inquiry into matters arising from the board committee's review that formalized Charney's firing in December 2014.

The fashion retailer said it intends to cooperate fully with the regulator in its investigation.

American Apparel originally suspended Charney in June for allegedly misusing company funds and for failing to stop the discrediting of a former employee who had accused him of sexual harassment.

Charney's legal counsel have called the board's review of his suitability to return as CEO "a complete sham."

The filing said American Apparel learned of the formal order of investigation on Feb. 5, but it was not immediately clear whether the probe related to Charney's conduct or to the board's review of him.

The company declined to comment further on the investigation.

American Apparel also reported Wednesday that in the fourth quarter of 2014 it lost about $28 million and its net sales fell about 9.2 percent, while revenue fell to $153.5 million from $169.1 million.

It also incurred $3.8 million in legal and consulting fees in the quarter related to its investigation into Charney.

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