Quantcast
Published On: Sat, Sep 29th, 2018

SEC charges Walgreens, former CEO Gregory Wasson, former CFO Wade Miquelon over misleading investors

The Securities and Exchange Commission today charged Walgreens Boots Alliance Inc., former CEO Gregory Wasson, and former CFO Wade Miquelon with misleading investors about increased risk that the company would miss a key financial goal announced when Walgreen Co. entered into a merger with Alliance Boots GmbH in 2012.

Walgreens agreed to pay a $34.5 million penalty to settle the SEC’s enforcement action.

According to the SEC’s order, Walgreens announced a two-step merger with Alliance Boots in June 2012, and at the same time projected that the combined entity would generate $9 billion to $9.5 billion in combined adjusted operating income in the 2016 fiscal year.  After completing the first step of the merger, Walgreens’ internal forecasts indicated that the risk of missing its 2016 projection had increasing significantly.  But Walgreens, Wasson, and Miquelon repeatedly publicly reaffirmed the projections without adequately disclosing the increased risk.  When Walgreens subsequently announced that it was moving forward with the second step of the merger in August 2014, it announced a new earnings per share goal that translated to an adjusted operating income projection of $7.2 billion for fiscal 2016, a 20 percent decline over its initial projection.  Walgreens’ stock price dropped 14.3% on the day of the announcement.

photo/ Vartza

“Over multiple reporting periods, senior Walgreens executives misled investors about the company’s public financial goal,” said Stephanie Avakian, Co-Director of the SEC’s Division of Enforcement. “The penalty assessed against Walgreens is intended to punish and deter such conduct, which deprived investors of information necessary to make fully informed investment decisions.”

Melissa Hodgman, Associate Director of the SEC’s Enforcement Division, added, “As this case shows, we are committed to holding corporate executives accountable when they are in the best position to ensure that disclosures are accurate and not misleading.”

Without admitting or denying the findings, Walgreens, Wasson, and Miquelon consented to the entry of an SEC order finding that they violated the antifraud provision contained in Section 17(a)(2) of the Securities Act of 1933, which  prohibits the use of untrue statements or omissions in the offer or sale of securities.  The SEC’s order requires each of the respondents to cease and desist from further violations of that provision, and also requires Walgreens Boots Alliance to pay a $34.5 million penalty, and Wasson and Miquelon to each pay a $160,000 penalty.

The SEC’s investigation was conducted by W. Bradley Ney and D. Ashley Dolan and supervised by Melissa Robertson in the Washington, D.C. headquarters.

On the DISPATCH: Headlines  Local  Opinion

Subscribe to Weekly Newsletter

* indicates required
/ ( mm / dd ) [ALL INFO CONFIDENTIAL]

About the Author

- The generic Dispatch designation, used primarily for press releases or syndicated content, but may be used for guest author requesting a generic nomenclature

Tags

Leave a comment

XHTML: You can use these html tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Sign up for our Weekly Newsletter



Recent Posts

How is a Car Accident Claim Filed? And Other Questions A Lawyer Can Answer

January 27, 2023, Comments Off on How is a Car Accident Claim Filed? And Other Questions A Lawyer Can Answer

The Best Uses for a Home Equity Loan

January 24, 2023, Comments Off on The Best Uses for a Home Equity Loan

Top 8 Reasons to Get an Outdoor Kitchen

January 22, 2023, Comments Off on Top 8 Reasons to Get an Outdoor Kitchen

How is a Christian Wedding Invite Different than a Secular Wedding Invite

January 16, 2023, Comments Off on How is a Christian Wedding Invite Different than a Secular Wedding Invite

Fun and Unusual Ways to Encourage Kids to Stay Healthy

January 12, 2023, Comments Off on Fun and Unusual Ways to Encourage Kids to Stay Healthy

Health Carousel Honors Dr Franklin Shaffer with the DAISY Lifetime Achievement Award

January 12, 2023, Comments Off on Health Carousel Honors Dr Franklin Shaffer with the DAISY Lifetime Achievement Award

5 Reasons Why Truck Accident Claims Are More Complicated

January 10, 2023, Comments Off on 5 Reasons Why Truck Accident Claims Are More Complicated
nft blockchain

What You Need to Know About NFTs as We Enter 2023

January 7, 2023, Comments Off on What You Need to Know About NFTs as We Enter 2023

Categories

Archives