It looks as if Avon’s recent streak of good publicity is under threat following a Research Update published by Probes Reporter, which highlights a “new but undisclosed SEC probe” at the company.
Just last month, the company looked in good form, bolstered by an 'earnings surprise' that lead to a Zacks upgrade, and the sale of its Liz Earle brand to Walgreens Boots Alliance. But it seems its positive run might be in jeopardy now that a new SEC probe has been exposed.
What differentiates this probe from others the company has faced in the past, is that Avon made no disclosure of it in any statements or filings. Probes Reporter noted that Avon has “made no new disclosures of SEC investigative activity since the conclusion of an investigation in Dec-2014”. Probes Reporter continued to state: “All we know about the SEC probe at this time is that it somehow pertains to the conduct, transactions, and/or disclosures of Avon Products, Inc.”
As news of the latest probe circulated, Avon share prices were seen to drop significantly compared with the week prior. At the time this article was published, Avon shares were $4.08, near a 52-week low.
Avon has suffered its fair share of scandal over the years. Just last month, the company looked to settle the $62m US lawsuit that had been hanging over it since it was accused of corruption and misleading shareholders – an allegation the company has always denied. The SEC investigation surrounding this activity claimed evidence of the malpractices stretched back to 2005; Avon has coughed up more than £340m in fines connected to bribery allegations.
