SEC reportedly probing Altria’s Juul investment

Juul brand vape cartridges are pictured for sale at a shop in Atlanta, Georgia.

Elijah Nouvelage | Reuters

The Securities and Exchange Commission has launched an investigation into Altria’s investment in e-cigarette start-up Juul Labs, the Wall Street Journal reported on Friday.

Regulators are examining whether the tobacco company sufficiently disclosed to shareholders the risks when it invested $12.8 billion for a 35% stake in Juul in 2018, sources told the Journal. Altria’s stake valued the start-up at $38 billion.

Altria took a $4.1 billion impairment charge for its investment in Juul in January. The company said the charge reflects the growing legal charges against Juul and the expectation that the number of lawsuits will only increase. Juul is being sued by multiple states for its role in promoting vaping among teens and children.

Juul and Altria have both responded to subpoenas from the SEC, sources told the Journal. The e-cigarette maker turned over documents to the SEC that included correspondence with Altria and financial projections that it gave to Altria prior to its decision to invest in Juul, one person said to the Journal.

When reached by CNBC, Altria declined to comment. Juul did not immediately respond to CNBC’s request for comment.

Read more about the investigation in the Journal’s report.

Source link

Leave a Reply

Your email address will not be published.