Taking Action Against Caremark

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Steve Jobs knows that a great way to take the spotlight off your possibly criminal participation in backdating is to release a sweet, sweet cell phone, that people can watch The Office on. Caremark Rx, unfortunately, did not have a little Steve Carell up its sleeve, and was forced to find alternative ways to distance itself from the stock scandal du jour.
A class action suit, by two pension funds from Pennsylvania and Louisiana, has been filed against Caremark’s higher ups charging that the top executives and the board “were willing to sell the company at no premium in part to get the broad indemnity that would cover any potential backdating transgressions.” And for their part, CVS happily handed over the indemnity because it “believe it was purchasing the company at such a bargain price,” $21.2 billion.
A spokeswoman for CVS told BusinessWeek the company does not think Caremark has a backdating problem. She also added that “CVS has "complete confidence in its management and board." Sounds like a tough pill to swallow. (Yeah, we said it).
Caremark Charged with Breach of Duty [BusinessWeek]

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