Harley-Davidson announced that the Securities and Exchange Commission is investigating shareholder complaints that the motorcycle manufacturer engaged in channel stuffing.

In a statement, the company said that it was not surprised by the SEC's inquiry and was cooperating with the investigation. According to a filing this week, Harley-Davidson was informed on Monday that the SEC's Enforcement Division would be investigating shareholder complaints filed after the company's April announcement that motorcycle shipments would not meet the original target numbers for 2005, and short-term production would be limited. Last year, the company shipped 317,000 motorcycles and announced plans to move 339,000 this year. The revised number was set at 329,000 bikes.

In a spring filing in the U.S. District Court for the Eastern District of Wisconsin, shareholders said that Harley-Davidson misrepresented certain facts, including what the company called a gap between supply and demand. The shareholders alleged that in an effort to hide a decline in demand, excess inventory had been shipped to dealers. Some complaints said that the padded shipments exceeded demands by tens of thousands of motorcycles in 2003 and 2004.Separately, the company also reported that second quarter earnings declined 4 percent from last year, with fewer shipments outweighing a small revenue increase. Harley-Davidson did raise its full-year earnings growth target.

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