Lung Cancer Alliance Calls for SEC Investigation of Tobacco Companies for Defrauding Investors

Sep 18, 2006, 01:00 ET from Lung Cancer Alliance

    WASHINGTON, Sept. 18 /PRNewswire/ -- Lung Cancer Alliance (LCA) today
 requested the Securities Exchange Commission (SEC) to investigate whether
 tobacco companies defrauded investors.
     In a letter written today to SEC commissioners, Laurie Fenton, LCA
 president, asked for a full investigation of possible securities laws
 violations for failing to disclose fraudulent marketing tactics.
     "The question now," said Fenton, "is whether these companies were also
 guilty of misleading investors by failing to disclose how their fraudulent
 marketing tactics impacted earnings and the potential revenue and liability
 impact of a racketeering conviction."
     Last month, after seven years of litigation, a federal court found
 Philip Morris USA Inc., Altria, Reynolds American (formerly R.J. Reynolds
 Tobacco Co.), Lorillard Tobacco Company, and British American Tobacco
 guilty of racketeering, conspiracy and fraud in covering up the health
 consequences of smoking, the addictiveness of nicotine, and the
 manipulation of nicotine levels to hook more young people as "replacement
 smokers."
     The companies repeatedly denied these charges in federal court.
     But, on August 17, 2006, US District Court Judge Gladys Kessler found
 the companies guilty of racketeering, and in a 1,700-page, strongly-worded
 decision, issued a sweeping injunction that:
     * bars the companies from all acts of fraud and deception;
     * forbids them from making false and deceptive statements about health
       consequences;
     * and requires full disclosure of all fraudulent practices, public
       postings of all related documents, and a national public disclosure
       campaign in all major media.
     Bolstering the court's decision, the Massachusetts Department of Public
 Health released a study demonstrating that from 1998 to 2004, tobacco
 companies increased the nicotine content by 10 percent to 30 percent in
 most of the 179 brands sold in the state during that period, with the
 largest increases in brands favored by young people.
     "Given all this," said Fenton, "serious questions arise as to the
 accuracy and truthfulness of the disclosure made by these companies to
 current and prospective investors in documents filed with the SEC."
     The letter requesting the investigation was sent to all SEC
 commissioners, including SEC Chairman Christopher Cox, as well as John W.
 White, the Director of the Division of Corporate Finance, and Linda C.
 Thomsen, Director of the Division of Enforcement.
     Please visit http://www.LungCancerAlliance.org to view the letter from
 Lung Cancer Alliance to SEC Chairman Cox.
     The Lung Cancer Alliance is the only national non-profit organization
 solely dedicated to patient support and advocacy for people living with, or
 at risk for, lung cancer. As the number one cancer killer, lung cancer will
 kill more than 160,000 Americans this year alone, causing more deaths than
 breast, prostate, colon, liver, kidney cancers and melanoma combined.
 
 

SOURCE Lung Cancer Alliance
    WASHINGTON, Sept. 18 /PRNewswire/ -- Lung Cancer Alliance (LCA) today
 requested the Securities Exchange Commission (SEC) to investigate whether
 tobacco companies defrauded investors.
     In a letter written today to SEC commissioners, Laurie Fenton, LCA
 president, asked for a full investigation of possible securities laws
 violations for failing to disclose fraudulent marketing tactics.
     "The question now," said Fenton, "is whether these companies were also
 guilty of misleading investors by failing to disclose how their fraudulent
 marketing tactics impacted earnings and the potential revenue and liability
 impact of a racketeering conviction."
     Last month, after seven years of litigation, a federal court found
 Philip Morris USA Inc., Altria, Reynolds American (formerly R.J. Reynolds
 Tobacco Co.), Lorillard Tobacco Company, and British American Tobacco
 guilty of racketeering, conspiracy and fraud in covering up the health
 consequences of smoking, the addictiveness of nicotine, and the
 manipulation of nicotine levels to hook more young people as "replacement
 smokers."
     The companies repeatedly denied these charges in federal court.
     But, on August 17, 2006, US District Court Judge Gladys Kessler found
 the companies guilty of racketeering, and in a 1,700-page, strongly-worded
 decision, issued a sweeping injunction that:
     * bars the companies from all acts of fraud and deception;
     * forbids them from making false and deceptive statements about health
       consequences;
     * and requires full disclosure of all fraudulent practices, public
       postings of all related documents, and a national public disclosure
       campaign in all major media.
     Bolstering the court's decision, the Massachusetts Department of Public
 Health released a study demonstrating that from 1998 to 2004, tobacco
 companies increased the nicotine content by 10 percent to 30 percent in
 most of the 179 brands sold in the state during that period, with the
 largest increases in brands favored by young people.
     "Given all this," said Fenton, "serious questions arise as to the
 accuracy and truthfulness of the disclosure made by these companies to
 current and prospective investors in documents filed with the SEC."
     The letter requesting the investigation was sent to all SEC
 commissioners, including SEC Chairman Christopher Cox, as well as John W.
 White, the Director of the Division of Corporate Finance, and Linda C.
 Thomsen, Director of the Division of Enforcement.
     Please visit http://www.LungCancerAlliance.org to view the letter from
 Lung Cancer Alliance to SEC Chairman Cox.
     The Lung Cancer Alliance is the only national non-profit organization
 solely dedicated to patient support and advocacy for people living with, or
 at risk for, lung cancer. As the number one cancer killer, lung cancer will
 kill more than 160,000 Americans this year alone, causing more deaths than
 breast, prostate, colon, liver, kidney cancers and melanoma combined.
 
 SOURCE Lung Cancer Alliance