On December 8, 2011, Harbinger Capital Partners LLC ("HCP") and certain of its affiliates, including Philip A. Falcone and Omar Asali, received "Wells Notices" from the staff of the United States Securities and Exchange Commission. Investment funds managed by HCP are the controlling stockholders of Harbinger Group Inc. ("HRG"), the majority stockholder of our parent company, Spectrum Brands Holdings, Inc. ("SBH"). Mr. Falcone is the Chief Executive Officer and Chairman of the Board of Directors of HRG. Mr. Asali is the Vice Chairman of SBH's Board of Directors and Acting President and a member of the Board of Directors of HRG.
The Wells Notices were not addressed to the Company, SBH, HRG, or any of their subsidiaries, and the matters described in the Wells Notices do not include any conduct involving, by, or on behalf of the Company, SBH, HRG, or any of their subsidiaries.
The Wells Notices indicate that the staff intends to recommend that the Commission bring actions alleging violations of the federal securities laws. A Wells Notice is an indication of the current views of the staff of the Division of Enforcement, prior to a decision by the Commission. It does not constitute a determination that the recipients have violated any law.
We have been advised that HCP and its affiliates are disappointed that the staff issued Wells Notices in these matters and plan to submit responses explaining why they believe enforcement actions are unwarranted. If the SEC decides to bring an enforcement action, HCP and its affiliates intend to vigorously defend against it.
