Apple's erstwhile sapphire supplier, GT Advanced Technologies, acknowledged Thursday that it is being investigated by the U.S. Securities and Exchange Commission (SEC).
In a filing with the SEC, GT said that the federal agency had contacted the company three weeks ago.
"On October 15, 2014, [the SEC] sent a letter to the Company noting that it was conducting an inquiry into matters involving the Company," the filing stated. "The SEC is seeking certain information regarding trading activity in the Company's securities, as well as the Company's sapphire business and securities offering going back to January 1, 2013, and requesting the preservation and production of documents."
GT added that it is "fully cooperating" with the SEC.
Merrimack, N.H.-based GT filed to reorganize under Chapter 11 on Oct. 6. Its case is winding its way through federal bankruptcy court.
In October 2013, GT and Apple struck a deal under which the former would produce sapphire at an Apple-owned Mesa, Ariz. plant. Apple agreed to loan GT $578 million so that GT could equip the factory with the necessary sapphire-growing furnaces to produce large amounts of the material. The scratch-resistant sapphire was intended to replace the specially-reinforced glass that had covered earlier iPhones' touchscreens.
The deal unraveled this fall because of cost overruns and production issues that GT said cost it nearly a billion dollars.
Certain to be a focus of the SEC's probe will be the stock transactions conducted by several GT executives in the months leading up to its sudden collapse.
According to regulatory filings, five top GT executives, including its CEO and COO, cashed in stock worth more than $10 million in the five months before the company declared bankruptcy.
During that span, CEO Thomas Gutierrez sold more than 264,000 shares, pocketing more than $4.5 million. His last sale was on Sept. 8, the day before Apple unveiled the iPhone 6 and iPhone 6 Plus. Some analysts had expected the new smartphones would substitute sapphire for Corning's Gorilla Glass as the screen overlay.
On the day Apple introduced the new phones, GT's stock price dropped 13%; it fell another 15% the following day. As of Thursday's closing bell, GT shares traded at just 2.5% of their pre-iPhone rollout price.
The SEC's job may be made easier on Friday, when documents that both Apple and GT asked to be kept sealed by the bankruptcy court are to go public. Among those documents will be an unexpurgated account from GT's chief operating officer, Daniel Squiller, about the company's financial meltdown. Details in that document may include dates when GT realized it was in trouble, and when it tried to renegotiate the terms of its contract with Apple.
Squiller, who made more than $2 million on sales of company stock, conducted his last pre-bankruptcy transaction on Sept. 2.
Apple and GT have signed an agreement that will release GT from all contracts with Apple. In return, Apple will be allowed to recoup the $439 million it had already given GT through GT's sales of sapphire-producing furnaces over the next four years.
The settlement awaits court approval.