Feds Drop Shrek 2 Probe

The Securities and Exchange Commission's L.A. office recommended on May 4, 2006, that a probe into DreamWorks Animation cease with no enforcement action, according to various business reports.

With the recommendation, the SEC will most likely rule not to sanction DWA for failing to warn investors, before first-quarter earnings were announced last year, that returns on the SHREK 2 DVD were running much higher than anticipated, causing the company to miss guidance.

However, there are still several shareholder lawsuits still pending over the matter.

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Rick DeMott
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