Summary
CVS Health Corporation (CVS) filed an 8-K report on June 29, 2007, to disclose a settlement with the U.S. Securities and Exchange Commission (SEC) regarding an inquiry that commenced in June 2005. The investigation focused on accounting practices related to a transaction in 2000. As part of this transaction, CVS made accounting entries for the conveyance of excess plush toy inventory, received $42.5 million in barter credits, and made a $12.5 million cash payment. The settlement resolves the SEC's investigation, with CVS Caremark Corporation consenting to an administrative order. Importantly, the company neither admitted nor denied the SEC's findings. The order finds violations of certain books and records provisions of federal securities laws and requires CVS to cease and desist from future violations of the charged provisions. CVS expressed satisfaction that the matter is resolved administratively and is now behind the company.
Key Highlights
- 1CVS Health Corporation (CVS) has settled an investigation with the SEC concerning a 2000 transaction.
- 2The SEC inquiry, which began in June 2005, focused on accounting for the 2000 transaction.
- 3The 2000 transaction involved the transfer of excess plush toy inventory, barter credits totaling $42.5 million, and a $12.5 million cash payment.
- 4CVS Caremark Corporation has agreed to an administrative settlement with the SEC.
- 5In the settlement, CVS neither admitted nor denied the SEC's findings.
- 6The SEC order finds violations of certain books and records provisions of federal securities laws.
- 7CVS is required to cease and desist from future violations of the charged provisions.