Shares in computer maker Gateway fell by 15% on Friday, following the news that the firm has been under investigation by the US stock market watchdog for nearly two years.

Gateway disclosed late on Thursday that the Securities and Exchange Commission (SEC) had been looking into events which took place in the year 2000.

The company said it was cooperating fully with the SEC.

The investigation is expected to be completed by the end of the first quarter of 2003, but Gateway said the outcome "cannot be determined at this time".

Gateway shares closed down 63 cents at $3.56 on the New York Stock Exchange. At their peak, the shares traded at more than $70.

Uncertainty

Gateway is the third largest PC maker in the US but has suffered from the downturn in IT spending and from fierce price competition from rivals such as Dell.

Analysts said the news would do little to help sentiment towards the firm.

"This puts another cloud on top of investor confidence in the company, because you kind of feel like this is something you should have been told," said Lehman Brothers analyst Daniel Niles.

"The problem here is you don't know how things are going to conclude."

Gateway restated its earnings for the 2000 financial year in February 2001, and the SEC investigation is into events which happened during the 2000 financial year.