Molycorp Plunges on SEC Investigation

Shares of Molycorp

, the largest U.S.-based rare earths producer, are off more than 10 percent on heavy volume in midday trading following news of a formal Securities and Exchange Commission investigation into the accuracy of the company's financial reports. The SEC notified Colorado-based Molycorp of the investigation in August and the company said it is cooperating, but added it cannot predict the length or scope of the SEC's efforts. On Thursday, Molycorp reported a net loss of $15.5 million, or 19 cents a share, compared with a year-earlier profit of $45.1 million, or 49 cents a share. On an adjusted basis, the loss was five cents a share, beating the consensus estimate that called for a loss of seven cents. Revenue rose 49 percent to $205.6 million. Molycorp sold nearly 4,400 tons of rare earths during the quarter, but said lower prices for rare earths and high production were reasons behind the loss. The 17 metals considered part of the rare earths group are used in the production of a variety products ranging from night-vision goggles used by the military to electric cars to smartphones and tablets. China controls about 95 percent of the global export market for rare earths, which has previously been believed to cause price spikes and supply shortages. Earlier this week, the U.S. Defense Department and Toyota Motor

announced they are working with Canadian rare earths firms to find new supplies,

. Shares of Molycorp have plunged 64 percent this year.