Revlon fined $850,000 by SEC, accused of misleading investors
- Share via
Cosmetics giant Revlon Inc. is facing a $850,000 fine from the Securities and Exchange Commission, which alleges the company misled investors as it tried to tackle its debt.
Without admitting or denying fault, the New York company agreed to settle federal government charges accusing it of withholding information during a going-private transaction with its controlling shareholder, MacAndrews & Forbes Holdings Inc.
M&F, which owns more than three quarters of Revlon’s shares and is led by billionaire Ronald Perelman, asked the company in 2009 to allow minority shareholders to swap their common shares for preferred stock.
M&F planned to then use the shares to pay down the cosmetics company’s debt, according to the government.
But an independent financial adviser brought on by the trustee overseeing Revlon’s retirement plan deemed the proposed deal to be unfair to investors, according to the SEC.
PHOTOS: Advertising and marketing mess-ups
The company tried to hide the prognosis from 401(k) participants and independent board members, and instead presented the M&F offer as fair, according to regulators.
Revlon could not immediately be reached for comment.
“Going-private transactions create opportunities for shareholder abuse and can have coercive effects on minority shareholders,” said Antonia Chion, associate director in the SEC’s Division of Enforcement, in a statement. “By erecting informational barriers, Revlon kept critically important information from its board and, in turn, misled investors.”
ALSO:
Auto dealers drive May retail sales up past expectations
European Union bans sale of cosmetics tested on animals
Lululemon CEO Christine Day to step down after sheer-pants scandal
Inside the business of entertainment
The Wide Shot brings you news, analysis and insights on everything from streaming wars to production — and what it all means for the future.
You may occasionally receive promotional content from the Los Angeles Times.
