New York ? The Securities and Exchange Commission is investigating Bristol-Myers Squibb Co. to see whether the drug giant inflated its revenues last year by $1 billion, a company official said Thursday.

Bristol-Myers spokesman Bonnie Jacobs said the firm was cooperating.

In trading on the New York Stock Exchange, Bristol-Myers shares fell 4.5 percent or $1.04 to close at $22.11.

The investigation centers around whether it was appropriate for Bristol-Myers to offer wholesalers incentives to buy drugs last year to help the firm meet earnings projections.

Earlier this year, Bristol-Myers announced the inventory glut caused by those incentives will slash this year’s earnings by close to 30 percent below 2001 levels. It also said the glut would shave between 35 cents a share and 40 cents a share, or $800 million to $1 billion, off earnings from the second quarter of this year through the first quarter of 2003.

Offering incentives to wholesalers is common in the industry, but the financial fallout is not.