US regulators have charged Walgreens Boots Alliance's former chief executive Gregory Wasson and former chief financial officer Wade Miquelon with misleading investors over the merger that created the group.
The Securities and Exchange Commission took the action over financial targets issued when Walgreens struck the deal with Alliance Boots in 2012. At the time, the SEC said, the company projected the combined group would generate between $9 billion and $9.5 billion in combined adjusted operating income in the 2016 fiscal year.
But, after completing the first step of the merger, it added, Walgreens' internal forecasts pointed to an increased risk it would miss the forecast. Walgreens, Wasson and Miquelon nevertheless "repeatedly publicly reaffirmed the projections without adequately disclosing the increased risk".
Modest goal
The company later reduced its initial forecast by a fifth, sending Walgreens’ stock price down 14 per cent on the day it announced the more modest goal.
The company itself agreed to pay a $34.5 million penalty, and Mr Wasson and Mr Miquelon to pay $160,000 each. They did not admit or deny the findings.
Melissa Hodgman, associate director of the SEC's enforcement division, said: "As this case shows, we are committed to holding corporate executives accountable when they are in the best position to ensure that disclosures are accurate and not misleading."
– Copyright The Financial Times Limited 2018
