The drugs firm Bristol-Myers Squibb has said that US regulators are investigating its sales practices.

The firm said it had been talking to the US Securities and Exchange Commission (SEC) since April regarding the sale of drugs to wholesalers last year which led to excessive stocks being built up.

"In making this inquiry, the SEC has not stated to the company that it has done anything improper in connection with the inventory situation," the company said in a statement.

Industry analysts have estimated that the sales could have inflated the company's revenues by more than $1bn (�645m).

The SEC is looking into whether the company gave inappropriate incentives to wholesalers to buy stock.

Warning

Earlier this year Bristol-Myers Squibb warned that its earnings in 2002 would be significantly lower than last year.

It said excessive stock held by wholesalers meant they would make fewer purchases this year.

The news of the investigation hit Bristol-Myers' shares, and by the close of trade on Thursday they were down $1.04 at $22.11.

Worries over corporate accounting practices have unnerved investors, following the scandals at Enron and WorldCom.

The news from Bristol-Myers added to market jitters on Thursday, and the Dow Jones index was down by more than 200 points at one point, before recovering in late trade.

On Wednesday the telecoms firm Qwest Communications saw its shares fall by 30% after it said it was the subject of a criminal investigation.