Pharmaceutical Company Settles SEC Charge of M&A Disclosure Violations

Global pharmaceutical company Allergan, Inc. agreed to pay a $15 million penalty to settle SEC charges alleging that the company violated tender offer disclosure requirements "in the wake of a hostile takeover bid."

The SEC Order found that Allergan failed to comply with disclosure requirements concerning third-party merger and acquisition negotiations that it made in response to a tender offer. The SEC Order stated that a public company which is the subject of a tender offer is required to disclose material changes in its position in a Schedule 14D-9.

The SEC Order also specified that Allergan failed to (i) timely disclose its negotiations with a potential acquirer, (ii) timely disclose its negotiations with another potential acquirer despite several requests that Allergan do so from SEC Division of Corporation Finance staff members, and (iii) fully and completely disclose its negotiations with the second potential acquirer until both parties announced that they executed a merger agreement.

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