Walgreens to pay $34.5M to settle SEC charges

Walgreens Boots Alliance will pay $34.5 million to settle charges from the Securities and Exchange Commission that the Deerfield, Ill.-based company misled investors about its financial goal announced when Walgreens and Alliance Boots agreed to merge in June 2012.

The SEC also charged former CEO Gregory Wasson and former CFO Wade Miquelon, who are each paying a $160,000 penalty.

The SEC charged Walgreens and the two former executives Sept. 28. According to the commission, Walgreens initially projected the merger with United Kingdom and Switzerland-based Alliance Boots would bring in $9 billion to $9.5 billion in combined adjusted operating income in fiscal year 2016.  However, when the first step of the two-step merger was completed, Walgreens' internal forecasts showed the risk of missing its 2016 projection had increased, according to the SEC. 

Later, in August 2014, Walgreens announced the merger was moving forward, as well as a new earnings per share goal that translated to an adjusted operating income projection of $7.2 billion for 2016. The same day of the announcement, Walgreens' stock price dipped 14.3 percent.

"Over multiple reporting periods, senior Walgreens executives misled investors about the company's public financial goal," Stephanie Avakian, co-director of the SEC's division of enforcement, said in a prepared statement. "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."

Walgreens, Mr. Wasson and Mr. Miquelon agreed to the settlement without admitting or denying the SEC's allegations.

"Walgreens Boots Alliance cooperated fully with the SEC's investigation and believes the agreement is in the best interest of the company," Walgreens said in a prepared statement.

The Chicago Tribune was unable to reach the former executives for comment Sept. 28.


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