Bankrupt apparel manufacturer Warnaco Group Inc has revealed it could be prosecuted by the Securities and Exchange Commission following a top-level probe by the powerful financial watchdog.

The New York-based company, which filed for Chapter 11 in June last year, said SEC lawyers are to recommend the firm and certain individuals are charged with alleged violations of federal securities laws.

Warnaco said it has been cooperating with the investigation having launched its own probe last year into suspected accounting errors that forced it to recast financial statements.