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A federal agency’s investigation into Foothill Ranch-based Wet Seal Inc. has concluded that there was evidence of racial discrimination in the case of one of the company’s former store managers.

The U.S. Equal Employment Opportunity Commission found that the teen and contemporary retailer had created a hostile work environment that ultimately forced former King of Prussia store manager Nicole Cogdell, who is African American, to quit.

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Wet Seal is the operator of its Wet Seal chain for teens and Arden B aimed at young women.

Cogdell had filed a racial discrimination charge against the company with the EEOC in March.

She filed a lawsuit against the company in July, along with two other former Wet Seal employees. The lawsuit, which is seeking class action status, alleges that African-American employees were targeted for termination from the company and in some cases denied pay or promotions at Wet Seal and Arden B stores.

Wet Seal said in a statement Monday that it will “present its defense to that claim in court.”

The company also said it had been working with the EEOC on a program to promote diversity at the company, which includes additional training.

Wet Seal shares were flat in midday trading Tuesday. The retailer had a recent market value of $258 million.