November 5, 2014 / 7:07 PM / 3 years ago

Labor pension adviser wants broader SEC probe of Walgreen

People walk by a Walgreens store in Pasadena, California December 20, 2013.Mario Anzuoni

BOSTON (Reuters) - Broadening its criticism of Walgreen Co, labor pension adviser CtW Investment Group said it has asked the U.S. Securities and Exchange Commission to probe whether legal claims made by a former company executive show violations of securities rules.

A complaint CtW said it delivered to the SEC on Wednesday, the latest in a series it has brought to the agency, outlined what it called apparent rule violations based on details made by Wade Miquelon, Walgreen's former chief financial officer. A defamation lawsuit he filed last month has opened an unusual view into an internal battle at the country's largest drugstore chain.

Among other things, CtW cited Miquelon's contention that Walgreen executives said his finance unit had lax controls. CtW said the description "calls into question" Walgreen's previous financial certifications as required by the Sarbanes-Oxley Act.

Walgreen spokesman Michael Polzin said the company would not comment on CtW's claims, but said the action filed by Miquelon "is without merit and we intend to defend vigorously."

An attorney for Miquelon said he could not comment on the case under Illinois law. A hearing on the case is scheduled for Thursday in Chicago.

Walgreen replaced Miquelon in August, just before it lowered an earnings projection. In his suit, Miquelon also alleges Walgreen executives defamed him in subsequent news reports that blamed him for errors in its forecast.

In a court filing, Walgreen questioned Miquelon's forecasting and said he had been told he "would not be allowed to continue" as CFO.

CtW advises labor pension funds that hold 2.5 million shares of Walgreen, and has helped foster investor revolts at other companies like JPMorgan Chase & Co in recent years.

Lately CtW has zeroed in on Walgreen as a company tied to broader debates such as Walgreen's now-abandoned plan to move its tax domicile to Europe to save money, and the appointment of an activist hedge fund manager to its board.

In an earlier complaint to the SEC before Miquelon's lawsuit was filed, CtW had cited news articles and analyst reports on meetings that Walgreen executives held with sell-side stock analysts and hedge fund managers on a possible tax inversion without sharing the same information more widely. CtW said the meetings appear to have violated Regulation FD, which requires investors have equal access to information.

An SEC spokesman declined to comment.

Reporting by Ross Kerber, editing by G Crosse

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