SEC Clears Zale in Investigation

The United States Securities and Exchange Commission has
concluded its investigation of Zale Corp. without any action, the company
announced April 15.

The SEC investigation began in October 2009 and was related to Zale’s restatement of financial results in 2008 and 2009.

The SEC also announced April 14 that it has settled a civil
action against Rebecca Lynn Higgins, a former Zale vice president of marketing.

The Commission alleged that, between 2004 and 2009, Higgins
caused Zale to record certain television advertising costs as prepaid
advertising, leading Zale’s advertising expenses to be misstated.

Higgins has not admitted or denied the allegations, but has
agreed to a final judgment that includes a $25,000 civil penalty.

Zale has also faced a shareholder class action lawsuit related to the restatement. On April 7, the U.S. District Court for the Northern District of Texas dismissed the plaintiff’s
complaint without prejudice. The plaintiffs now have until May 23 to file a new
complaint.

“We are pleased to announce that the SEC has concluded
its investigation,” Zale CEO Theo Killion said in a statement. “We
are glad to share with our investors and employees that this matter is now
behind us as we continue to focus on returning our business to
profitability.”

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