Shares in energy stocks have tumbled fast and hard following an admission from yet another energy firm that its accounting is under investigation.

Any kind of wrongdoing or missed accounting issue is going to clearly get the attention of the SEC

Mike Worms, analyst

Atlanta-based Mirant said it is the subject of an informal investigation by the Securities and Exchange Commission (SEC).

Mirant, which disclosed last week it overstated the value of some of its assets and liabilities, said it was not surprised by the SEC action.

Among the errors, Mirant said in 2001 it overstated its gas inventories by $85m, as well as other overstatements in the amounts of $100m, for in accounts payable, and $68m, in accounts receivable.

Mirant said the errors "were made honestly" upon release of its second-quarter trading statement on 30 July.

Shares slide

The SEC action is the latest in a string of investigations into corporate accounting in wake of Enron's accounting debacle, made public last autumn.

"When companies report accounting issues, informal inquiries from the SEC usually follow, especially in this day and age," Mirant's general counsel wrote in a press release.

Surprise or not, the news sent most energy stocks tumbling in Wall Street trading on Monday.

Shares in Mirant lost as much as 13% to $3.04 minutes before the final bell was rung at the New York Stock Exchange, where its shares are traded.

The announcement also sent shares in other energy firms sharply lower, with Dynegy - itself the subject of an SEC investigation - falling nearly 25% in Monday's session.

Calpine, the huge California energy concern, saw its stock lose 12% of its value during heavy trading.

SEC attention

As part of its informal inquiry, the SEC has requested additional information about Mirant's recently disclosed shareholder lawsuit and any round-trip trades the company may have performed.

Round-trip trades, sometimes called "wash" trades, are done by two energy firms that essentially trade the same amount of energy at the same price, with effect of boosting trade volume.

In addition, the SEC is looking into any role the firm may have played in the California power fiasco.

"The SEC's been investigating virtually everybody," said Mike Worms, an analyst at Gerard Klauer Mattision.

"Any kind of wrongdoing or missed accounting issue is going to clearly get the attention of the SEC.

"This, in my mind, does not come as a surprise."