Tribune Company (NYSE:TRB) announced today that the Securities and Exchange Commission (SEC) has concluded its inquiry of circulation misstatements at Newsday and Hoy. The company identified circulation reporting errors at the two New York newspapers as part of an internal investigation in 2004. The company assisted the SEC during the commission’s inquiry, which also began in 2004.
“We launched an extensive internal investigation immediately after allegations of circulation improprieties were made regarding Newsday and Hoy,” said Dennis FitzSimons, Tribune chairman and chief executive officer. “We gave the SEC and other federal, state and local authorities our full cooperation and began communicating with our advertisers from the outset. We’re happy the SEC’s findings are consistent with our own investigation results and that we have closed this matter. We are looking to the future at Newsday and Hoy,with a focus on readership and service to the Long Island community.”
In closing its inquiry, the SEC ordered Tribune to “cease and desist” from violating statutory provisions related to its record-keeping and reporting. Newsday and Hoy circulation-related records were inaccurate due to the practices uncovered by the company. No fines or other sanctions were levied against the company.
The SEC acknowledged the “…remedial acts promptly undertaken by Tribune and the cooperation that Tribune afforded the Commission staff.” The SEC also credited Tribune for swiftly investigating the circulation misstatements and terminating all of the personnel associated with falsely inflating paid circulation figures at the newspapers.
“The circulation misstatements at Newsday and Hoy were caused by the actions of a few people who are no longer employed at either newspaper,” FitzSimons said. “We’ve since brought in a new management team and strengthened controls at Newsday and Hoy, and tightened circulation policies, systems and procedures at all of our newspapers.”
Following the discovery of the circulation misstatements, Newsday and Hoy offered restitution to advertisers. The company also initiated an internal audit of circulation practices at its 10 other daily newspapers, which uncovered no material misstatements.