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Six years ago, Walgreens announced its merger with Boots and told investors it would achieve profits of at least $9 billion in 2016. The SEC said the company knew the figure was a fantasy.
The U.S. Securities and Exchange Commission (SEC) said Friday that it was clear to former Walgreens CEO Greg Wasson and Chief Financial Officer Wade Miquelon that the pharmacy would seriously fall short. $9 billion target. However, Walgreens executives confirmed this number to investors multiple times during earnings calls in 2013 and 2014.
Finally, in August 2014, two years after Walgreens first announced its merger with Boots, Walgreens admitted it would not meet its profit expectations. It shocked investors by slashing its 2016 adjusted operating profit target to $7.2 billion. The stock fell more than 14% after the change was announced.
On Friday, the U.S. Securities and Exchange Commission reached a settlement with Walgreens for misleading investors. Walgreens agreed to pay a $34.5 million fine.
“Over multiple reporting periods, Walgreens senior executives misled investors about the company’s public financial objectives,” Stephanie Avakian, co-director of the SEC’s Enforcement Division, said in a statement. Walgreens’ penalties are intended to punish and deter conduct that deprives investors of the information they need to make fully informed investment decisions.”
According to the U.S. Securities and Exchange Commission, walgreens (world boxing association) The internal forecast said management knew the risk of failing to achieve its 2016 forecast had increased “significantly”.
In the settlement, Walgreens did not admit or deny the allegations.
“The settlement does not involve any current executive or executive of Walgreens Boots Alliance and does not allege that anyone acted knowingly or recklessly at any time,” the company said in a release.
Watson and Miquelon will each pay a fine of $160,000. Walgreens’ stock price was unchanged following the news.
CNN Business (New York) First published September 28, 2018: 12:15pm ET