Sept. 28 (UPI) — Walgreens agreed Friday to pay more than $34 million to settle a federal government investigation that accused the company of misleading investors.
A 10-page Securities and Exchange Commission order outlined the investigation into whether former Walgreens CEO Greg Wasson and former CFO Wade Miquelon provided adequate explanation to investors about the potential risks involved in a planned merger with Alliance Boots four years ago.
Before the merger, Walgreens said the new company would generate $9-$9.5 billion in combined adjusted operating income. Revised forecasts later showed the company was at risk of missing those targets, but Wasson and Miquelon publicly reaffirmed the forecasts.
Shares of the company fell sharply on Wall Street after the less optimistic forecasts emerged. Walgreens ultimately completed the merger with Alliance Boots in 2014.
Friday, Walgreens agreed to pay a total of $34.5 million to settle the case. The SEC also fined Wasson and Miquelon $160,000 each.
The company said the settlement does not involve any current Walgreens executives. It was not required to admit to or deny the accusations. The settlement agreement does not allege any reckless action on the company’s part.
“Senior Walgreens executives misled investors about the company’s public financial goal,” SEC official Stephanie Avakian said in a 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.”