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SEC Investigating Cablevision’s AMC

Accounting irregularities also probed by Justice Dept.

Jul 4, 2003 | NEWSDAY

The Securities and Exchange Commission has begun an investigation of accounting irregularities at Cablevision Systems Corp.'s AMC Networks division, the company disclosed yesterday.

In a government filing, the Bethpage-based cable giant said it had "received a formal order of investigation from the Securities and Exchange Commission, as well as a subpoena in connection with their investigation." The company said it could not predict how long the probe would last or its outcome.

"As the filing indicates, the company is cooperating fully and intends to continue to do so," said Charles Schueler, a Cablevision spokesman.

He declined to answer further questions, including what types of information were being sought by the SEC.

Newsday reported last week that the Justice Department was probing the accounting problems at American Movie Classics.

Two weeks ago, Cablevision announced the firing of 14 executives, including AMC president Kate McEnroe, after an internal, five-month investigation found improper accounting and fabricated invoices. At the time, it alleged that some AMC employees improperly accelerated around $18 million in expenses from 1999 to 2002. Cablevision said the problems didn't require a restatement of its financial information but that it had notified the SEC and Justice Department.

An SEC spokesman could not be reached for comment.

Cablevision hired the law firm of Willkie Farr & Gallagher after the cable company's accountants and outside auditors, KPMG, uncovered the AMC irregularities. The legal team includes former Gov. Mario Cuomo.

Cablevision also hired attorney William McLucas to oversee its internal investigation. McLucas once directed the SEC's enforcement division and examined the collapse of WorldCom Inc., which also was plagued by accounting problems.

Cablevision hasn't yet disclosed the costs of retaining these lawyers and consultants.

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