CVS Caremark announces plans to pay $20M to resolve SEC investigation

WOONSOCKET, R.I. — CVS Caremark announced on Friday that it has agreed to a $20 million civil penalty to resolve a previously disclosed investigation by the Securities and Exchange Commission into 2009 public disclosures made by the company, securities transactions and certain aspects of the purchase accounting adjustment related to the October 2008 Longs Drug Stores acquisition.

The settlement will be entered into by the company on a "no admit or deny" basis and will resolve a number of alleged violations of the Securities Act of 1933 and the Securities Exchange Act of 1934, including certain anti-fraud provisions of those statutes.

The company stated that the funds have been fully reserved in its financial statements, and the settlement will not require the pharmacy retailer to restate its earnings for any reporting period.

"We are pleased to be taking this important step to close the chapter on these matters from 2009 and look forward to resolving the SEC investigation in the near future," stated Thomas Moriarty, EVP and general counsel of CVS Caremark. "CVS Caremark remains committed to complying with all applicable laws and regulations. We will continue to focus on driving value for our customers and shareholders through our distinctive integrated pharmacy model." 

This investigation, which CVS Caremark previously disclosed after it began in 2011, has focused on events that occurred in the third and fourth quarters of 2009, including certain public disclosures made by the company, transactions in the company's securities by certain current and former employees and certain aspects of the purchase accounting adjustment related to the October 2008 Longs Drug Stores acquisition. The agreement in principle was reached following extensive discussions with the SEC over the last several months, the company stated. The settlement remains subject to completion of final documentation and approval by the Commission and federal court.


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