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If only the SEC would IM…

images-11.jpegAlthough footnoted.org doesn’t spend a lot of time looking at SEC comment letters, it was hard not to notice the six letters released on Friday between regulators and the teen mall retailer Hot Topic (HOTT). The letters, the first of which dates back to Aug. 30 provides additional context and explanation on why the company filed an amended K and two amended Qs last year.

Among other things, the Aug. 30 letter asks about revenue recognition on web sales and questions why the company is only reporting one segment — two red flags in my book — even though the company’s Torrid stores have different margins, a different product mix and tend to be larger than Hot Topic stores. The company’s eight-page response from its outside counsel last September goes through the various points and then provides the revised filings. After another round of questions from the SEC and answers, the SEC finally gave Hot Topic the all clear on March 19.

So why are investors learning about this on May 4? While the comment letter process works better than it used to, it’s clearly still not working good enough. In the age of IMing — something Hot Topic customers are no doubt familiar with — there’s no reason for all of this correspondence to come out months after the fact.