Juul model vape cartridges are pictured on the market at a store in Atlanta, Georgia.Elijah Nouvelage | ReutersThe Securities and Trade Fee has lau
Juul model vape cartridges are pictured on the market at a store in Atlanta, Georgia.
Elijah Nouvelage | Reuters
The Securities and Trade Fee has launched an investigation into Altria’s funding in e-cigarette start-up Juul Labs, the Wall Street Journal reported on Friday.
Regulators are inspecting whether or not the tobacco firm sufficiently disclosed to shareholders the dangers when it invested $12.8 billion for a 35% stake in Juul in 2018, sources instructed the Journal. Altria’s stake valued the start-up at $38 billion.
Altria took a $4.1 billion impairment charge for its funding in Juul in January. The corporate stated the cost displays the rising authorized costs in opposition to Juul and the expectation that the variety of lawsuits will solely improve. Juul is being sued by multiple states for its function in selling vaping amongst teenagers and kids.
Juul and Altria have each responded to subpoenas from the SEC, sources instructed the Journal. The e-cigarette maker turned over paperwork to the SEC that included correspondence with Altria and monetary projections that it gave to Altria previous to its resolution to put money into Juul, one individual stated to the Journal.
When reached by CNBC, Altria declined to remark. Juul didn’t instantly reply to CNBC’s request for remark.