Without admitting or denying wrongdoing, Revlon has agreed to settle Securities and Exchange Commission (SEC) claims that it deceived shareholders and its independent directors in 2009 when majority shareholder, the investment firm MacAndrews & Forbes owned by billionaire Ronald Perelman, attempted to buy out Revlon’s minority shareholders and take the company private as part of a deal to recover a loan to the troubled cosmetics maker. The company’s alleged conduct, described by an employee as “ring fencing,” involved efforts to keep critical investment information, i.e., that a thirdparty financial adviser found that the benefit—or consideration—offered in the transaction was inadequate for 401(k) shareholders, mostly company employees and retirees.

Among other matters, Revlon (i) amended the agreement with its trustee to ensure that the trustee would not share the adviser’s opinion with Revlon shareholders, (ii) “ensured that it was not a party to any engagement letter concerning the adequate consideration determination” by the adviser, (iii) “directed the trustee to inform Revlon of its decision whether to allow 401(k) members to tender their shares without any reference to the [adviser’s opinion],” and (iv) in a notice sent to the 401(k) members and filed as an exhibit to the exchange offer documents, “removed the explicit term ‘adequate consideration’ and replaced it with citations to ERISA statutes.” SEC assessed an $850,000 civil penalty against the company. See SEC Press Release and The New York Times, June 13, 2013.