It looks like DreamWorks might see an end to it's legal troubles over the Shrek 2 DVD.

In a story from Variety, the Securities and Exchange Commission's Los Angeles office recommended on Thursday that the "investigation into Jeffrey Katzenberg's toon studio be terminated with no enforcement action."

The SEC still has to make a formal decision, the recommendation Thursday makes it "very likely that DreamWorks Animation will escape government sanction for failing to warn investors, before first-quarter earnings were announced last year, that returns on the Shrek 2 DVD were running much higher than anticipated, causing the company to miss guidance."

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DreamWorks Animation isn't out of the woods yet and is still looking at some legal action over this incident.

This news comes after DreamWorks reported "better-than-expected earnings earlier this week," which were based mainly on solid sales of the Madagascar DVD.

Investors in the company have their sites set on the upcoming opening of Over the Hedge, which could be the largest moneymaker for the company this year.

Dont't forget to also check out: Shrek 2

Evan Jacobs at Movieweb
Evan Jacobs