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Walgreens Boots Alliance will pay $ 34.5 million to pay for the charges that misled investors over Walgreens' merger with Alliance Boots. Two former leaders have also been charged and are paying separate fines.
The Securities and Exchange Commission on Friday accused the company, along with former Walgreens CEO Gregory Wasson and former chief financial officer Wade Miquelon, of misleading investors as to the chances that the company missing a financial goal announced by Walgreens in 2012.
Walgreens predicted that the combined companies would earn between $ 9 billion and $ 9.5 billion in combined adjusted operating income in fiscal 2016, in accordance with the SEC's order. But after the first stage of the merger, Walgreens' internal forecasts showed that the risk of missing this projection had increased, according to the SEC. However, Walgreens and the two leaders continued to publicly reaffirm the initial projection, the SEC said.
In August 2014, Walgreens announced a new earnings per share result that would result in an adjusted operating profit projection of $ 7.2 billion for fiscal 2016. The company's share price plummeted by more than 14% this year. day.
As part of the settlement, Walgreens did not admit or deny the allegations of the SEC. "Walgreens Boots Alliance has fully cooperated with the SEC investigation and believes that this deal is in the best interest of the company," Walgreens said in a press release.
Wasson and Miquelon must each pay a fine of $ 160,000, according to the SEC. They solved the problem with the SEC separately from Walgreens, according to Walgreens. Attempts to reach Wasson and Miquelon were not successful on Friday morning.
Wasson, who joined Walgreens in 1980 as a pharmacy trainee while studying at the Purdue University School of Pharmacy, retired after the merger. He is co-founder and president of Wasson Enterprise in Chicago.
Miquelon left the company in December 2014. He is registered as Executive Vice President and Chief Financial Officer at Joann, Fabric and Craft Stores, on the company's website.
"Over the course of several periods, Walgreens executives misled investors about the company's public financial goal," said Stephanie Avakian, co-director of the SEC's enforcement division. "The penalty imposed on Walgreens is intended to punish and deter such behavior, which deprives investors of the information necessary to make fully informed investment decisions.
More soon.
Twitter @lschencker
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