Google Inc., the most-used Internet search engine, is being investigated by the California Department of Corporations after the company yesterday said it failed to register shares issued to some workers and consultants.

The agency said in a statement that it’s probing possible violations of securities laws between September 2001 and June 2004 that Google disclosed yesterday in a filing with the U.S. Securities and Exchange Commission. Google has said in filings it’s planning an initial public offering to raise as much as $3.3 billion, the largest ever by an Internet company.

The investigation may delay by a few weeks Google’s IPO, which had been planned for this month, attorney Robert Clarkson said. The Mountain View, California-based company may need to make additional filings with the SEC to document the state probe and any other investigations that begin, he said.

“It will be interesting to see if there will now be some piling on,” said Clarkson, a partner with the law firm of Jones Day in Menlo Park, California. “They may end up getting their hands slapped by a bunch of state regulators.”

Clarkson doesn’t represent Google.

Google said in yesterday’s SEC filing that it may have violated securities laws in 18 states including California, New York, and Illinois, as well as the District of Columbia.

The company may also have to pay tens of millions of dollars in fines related to its failure to properly register shares, attorney Robert Heim said earlier today.

Registration Requirements

Heim, with the law firm of Meyers & Heim in New York, said Google might have to pay fines as high as $50 million to settle any claims brought by state regulators or the SEC.

“The SEC takes the registration requirements very seriously,” Heim said before California announced its investigation.

SEC spokesman John Heine declined to comment on whether the federal agency will investigate Google.

The California Department of Corporations said in a statement that it will “ensure full compliance with California’s securities laws.” Department spokesman Shad Balch declined to comment beyond the agency’s statement.

Google already was considering delaying its IPO from next week to the week of Aug. 16, financial news network CNBC reported earlier, citing a source it didn’t identify. It’s taking Google longer than expected to register prospective investors for the Internet-based auction the company will use to issue shares, Dow Jones Newswires reported, without identifying its source.

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