CVS Caremark Corp. said it will pay a penalty after reaching an agreement in principle with the Boston regional office of the Securities and Exchange Commission to resolve an SEC investigation of certain events that occurred in 2009.


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CVS Caremark set to resolve SEC probe

August 2nd, 2013

WOONSOCKET, R.I. – CVS Caremark Corp. said it will pay a penalty after reaching an agreement in principle with the Boston regional office of the Securities and Exchange Commission to resolve an SEC investigation of certain events that occurred in 2009.

CVS reported Friday that the probe, which the company disclosed after it commenced in 2011, focused on events 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 acquisition of Longs Drug Stores.

Under the agreement in principle, CVS will pay a $20 million civil penalty, which the company said has been fully reserved in its financial statements and won't require it to restate earnings for any reporting period.

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

"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," Thomas Moriarty, executive vice president and general counsel at CVS Caremark, said in a statement. "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."

The agreement was reached after extensive talks with the SEC over the last several months, CVS said, adding that the settlement remains subject to completion of final documentation and approval by the commission and federal court.

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