Michaels Stores Faces Stock Probe

Michaels Stores Inc., the world’s biggest arts-and-crafts retailer, said the Securities and Exchange Commission and the New York district attorney’s office are investigating stock transactions between offshore trusts and the company’s chairman and vice chairman.

The company received a grand jury subpoena Feb. 17 from the district attorney’s office for documents and records relating to trusts located outside the U.S. that own or have held its shares, Irving, Texas-based Michaels said in a statement Wednesday. Michaels said it was cooperating fully.

Michaels said the trusts, which it didn’t name, bought company shares from Chairman Charles J. Wyly Jr., Vice Chairman Sam Wyly and other family members. The Wyly family is a beneficiary of the trusts, Michaels said. Although the sale of the stock was disclosed in SEC filings, the company hadn’t reported the securities as being “beneficially owned” by Charles and Sam Wyly, Michaels said.

Christopher Holland, Michaels’ vice president of finance, didn’t immediately respond to a telephone message left at his office.

Shares of Michaels rose 14 cents to $31.75 on the New York Stock Exchange. The company disclosed the investigation after the close of regular U.S. trading.