NEW YORK -- The Securities and Exchange Commission (SEC) won’t pursue enforcement action against Town Sports International (TSI), New York, after completing a yearlong investigation into accounting issues, TSI announced.
The SEC informed TSI of the closure of the investigation via a letter it received on Monday. TSI, which recently announced a third quarter decline in revenue this year, could have faced fines from the SEC.
The SEC began a formal investigation of TSI on Sept. 14, 2009, related to deferral of certain payroll costs incurred in connection with the sale of health club memberships and the time it took the company to amortize the deferred costs into an expense and the initiation fees into revenue. TSI had been cooperating with the SEC, providing documents and testimony, since May 2008, according to TSI.
TSI, which owns and operates the New York Sports Clubs, Boston Sports Clubs, Philadelphia Sports Club and Washington Sports Clubs, could not comment further on the case, according to a TSI spokesperson. The SEC also does not comment on cases.