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DOSSIER – This archive photo from June 4, 2014 shows a Walgreens store in Boston. Shares of AmerisourceBergen skyrocketed before the opening bell on Tuesday, February 13, 2018, on reports that Walgreens is pursuing a total takeover of the huge drug distributor. The Wall Street Journal reports that Walgreens CEO Stefano Pessina has reached an agreement with AmerisourceBergen Corp. Walgreens already owns about 26% of the company. (AP Photo / Charles Krupa, File) ORG XMIT: NY109(Photo: Charles Krupa, AP)

Walgreens Boots Alliance announced Friday it has agreed to pay a $ 34.5 million fine to settle an investigation by the Securities and Exchange Commission.

By installing it, Walgreens does not admit nor deny the allegations. The SEC was investigating whether the former general manager of the pharmacy chain and the former chief financial officer had not adequately warned of the risks associated with Walgreens' planned merger with Alliance Boots.

The SEC alleged that the two former CEOs, Greg Wasson, then CEO, and Wade Miquelon, then CFO, acted "carelessly" in presenting financial forecasts in June, October and December 2013 and March 2014 in appeals. results. Wasson and Miquelon are fined $ 160,000.

When Walgreens announced a two-stage merger with Alliance Boots in June 2012, it expected the combined company would generate a combined adjusted operating profit of $ 9 billion to $ 9.5 billion over the course of the year. However, the SEC asserted that after completing the first stage of the merger, Walgreens' internal forecast showed that the company was at a "significantly" greater risk of ignoring these estimates.

Still, the two leaders have publicly reaffirmed the forecasts, the SEC said.

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In November 2013, Walgreens had realized that an unexpected increase in the price of generic drugs would put additional pressure on Walgreens' pharmaceutical business, "already late," according to the SEC. The company lowered its guidance for FY 2016 on December 13th. Given that management was aware of the risk by December 2013, Walgreens' statements "did not properly reveal the increased risk," the agency said.

In this February 23, 2013, archive photo, Walgreen Co. President and CEO Greg Wasson speaks at the National Governors Association Winter Meeting in Washington. Walgreen says Wasson will retire after the pharmacy chain has finalized its merger with health and beauty retailer Alliance Boots. Walgreen expects this transaction to close in the first quarter of 2015. The largest pharmacy operator in the United States has said Alliance Boots' president, Stefano Pessina, will become its interim general manager. (Photo: Manuel Balce Ceneta, AP)

Then, in 2014, Walgreens decided that its operating profit target for 2016 was "more reasonable". He withdrew these goals in his June 24 earnings call and announced to investors that he would soon provide new targets.

The following month, August 6, Walgreens provided a new estimate of earnings per share which resulted in an adjusted operating income of $ 7.2 billion for fiscal 2016, a decrease of 20% per annum. compared to its initial estimate. Shares fell 14.3% when Walgreens announced the new financial targets, according to the SEC.

"Over several periods, Walgreens senior executives have misled investors about the company's public financial objective," said Stephanie Avakian, co-director of the SEC's Division of Enforcement. "The penalty imposed on Walgreens aims to punish and deter such behavior, depriving investors of the information necessary to make fully informed investment decisions."

In 2012, Walgreens took a 45% stake in Alliance Boots for $ 6.7 billion, with the option of subsequently purchasing the remaining 55%. He closed the complete transaction at the end of 2014.

Wasson started as CEO of Walgreens in 2009 and left in 2015 when the Alliance Boots merger was completed and current CEO Stefano Pessina took over the merged company. Miquelon was Chief Financial Officer of Walgreens from 2008 and left in August 2014.

Read the complete file here.

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