NEW YORK -- Town Sports International (TSI) said the U.S. Securities and Exchange Commission (SEC) is formally investigating the New York-based public company’s deferral of certain payroll costs related to membership sales.
In a regulatory filing, TSI said it had been under informal investigation since May 2008.
The SEC, which issued the formal investigation order on Sept. 14, also was investigating the time TSI took to record amortization of the deferred costs into expense and initiation fees into revenue.
The company declined further comment today.
TSI’s brands consist of New York Sports Clubs, Boston Sports Clubs, Washington Sports Clubs and Philadelphia Sports Clubs. TSI had 166 clubs in the United States and three clubs in Switzerland as of June 30.