SEC Charges Revlon with Misleading Shareholders in "Going Private Transaction"

The SEC charged cosmetics and beauty manufacturer Revlon with violating federal securities laws asserting that the company misled shareholders in a "going private transaction."

An SEC investigation found that during a voluntary exchange offer to satisfy a significant debt to its controlling shareholder, Revlon did not inform its independent board members of certain critical information: a third-party financial adviser had found that the consideration offered in the transaction was inadequate.

In an attempt to avoid its potential disclosure obligation, the company amended the agreement it had with the trustee to ensure that the trustee would not share the [in]adequate consideration determination with Revlon. According to the SEC, Revlon's actions resulted in various materially misleading disclosures to its shareholders. Revlon has agreed to settle the SEC's charges and pay a penalty.

See: Order; Press Release.