General Growth Properties under investigation by the SEC

After having survived a takeover by rival Simon Property Group and having found a way to navigate an exit out of bankruptcy, it appears the troubles facing General Growth Properties are not quite over. The Wall Street Journal reported today the Securities and Exchange Commission has started a formal probe of insider trading by current and former officers and directors.

General Growth made the investigation known in its quarterly report filed with the SEC last week. According to the article, the investigation is a continuation of an informal probe that began in October 2008, which was around the time when General Growth’s stock declined sharply due to debt problems within the company. This forced several executives who had borrowed to buy company stock to sell large blocks in order to satisfy margin calls.

While General Growth did not list which employees and directors are involved in the probe, they do not expect the outcome of the probe to impair its finances or operations as it plans to exit bankruptcy protection later this year. The nation’s second-largest mall owner also said they will cooperate fully with the SEC investigation

SOURCE: The Journal Record