S.E.C. decides not to act against taser on safety statements

December 14, 2005
By ALEX BERENSON, New York Times

The Securities and Exchange Commission has decided not to take action against Taser International in connection with statements about the safety of its electric stun pistols, the company said yesterday.

Taser's shares jumped 15 percent on the news, though they remain far below the highs they set a year ago. They closed at $7.04, up 92 cents. They closed at $32.59 on Dec. 30 last year.

The company's pistols, called Tasers, which are widely used by police to subdue suspects, have been associated with more than 140 deaths. The weapons fire electrified barbs up to 25 feet, delivering a painful 50,000-volt shock.

Taser's sales and profits soared in 2004, but the company's profits have plunged this year as controversy over the safety of its weapons has grown. In November, an influential police research group recommended new restrictions on the use of the weapons, suggesting that officers be allowed to use them only on people who are actively resisting arrest.

Last month, Taser said it would have to restate its profits for the first half of 2005 because it had failed to properly record its legal and professional expenses during that period. The company also failed to file its third-quarter financial statements within the Nasdaq's deadline for filing, leading the Nasdaq to warn that Taser stock would be delisted. Taser has appealed the delisting requirement.

In January, Taser announced that the S.E.C. had begun an investigation into the company's statements about the safety of its stun guns and a sales order that it announced in late December 2004. Taser said in a statement yesterday that S.E.C. enforcement officials had told the company that they had completed the investigation and had decided against taking action against the company.

Taser also said that the S.E.C. was ''continuing to investigate issues relating to trading in the company's stock.''

As a matter of policy, the S.E.C. does not comment on its investigations.