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Detour Magazine Submits Settlement Offer to SEC

Publishing: Glossy periodical hopes to head off possible action over its accounting practices.

November 21, 2000|From Reuters

Detour Magazine Inc., a glossy fashion and entertainment magazine based in Los Angeles, said Monday it is in talks with federal securities regulators in hopes of heading off possible enforcement action over its accounting practices and consulting fees.

Detour, which publishes 10 issues a year, said the Securities and Exchange Commission has filed no official charges or allegations against the company or its chairman, Edward Stein, but is in talks with the magazine.

"After discussions between the SEC staff and counsel to Detour and Mr. Stein, the company submitted an offer of settlement of this matter," the company said in a quarterly earnings statement filed with the agency.

"And it is anticipated that the offer will be accepted by the SEC in the near future," said Detour, a magazine targeting young, upscale readers, featuring actors, musicians, models and other celebrities.

A settlement with the SEC typically requires no admission of wrongdoing.

An SEC spokesman declined to comment on the matter.

The SEC told Detour in March that it could face enforcement action challenging the accuracy of its quarterly financial statements in 1997 and 1998, according to the SEC filing.

"The company does not believe that any of these quarterly adjustments would result in any change in the company's reported net income for 1997 and 1998," the company said.

The SEC also is looking into possible failure to properly record compensation to consultants in the form of options to buy 2.2 million common shares in 1997, it said.

If the SEC accepts the settlement, Detour said it will agree not to violate securities laws in the future, to keep its books and records in proper form and to maintain a system of internal accounting in line with generally accepted industry standards.

Its shares closed down 1 cent at 29 cents on the Bulletin Board. They have a 52-week high of $1.13 and low of 15 cents.

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