Tobacco

Groups Call for SEC Probe Over Nicotine

Companies defrauded investors, they allege

WASHINGTON -- Anti-smoking activists have launched another attack on cigarette makers, this time on grounds that publicly traded tobacco companies defrauded investors by not coming clean about manipulating nicotine levels, the Associated Press said. In a letter Monday, the Lung Cancer Alliance urged the Securities & Exchange Commission (SEC) to investigate Altria Group Inc., its Philip Morris USA unit, Reynolds American Inc., Lorillard Tobacco Co. and British American Tobacco PLC.

During a lengthy trial on federal racketeering and conspiracy charges, [image-nocss] tobacco companies denied claims of increasing nicotine levels to addict a new generation of smokers to replace those who died of smoking-related diseases, but a federal court decision in August found the firms liable, the Lung Cancer Alliance wrote.

A report by Massachusetts public-health officials also issued in August found nicotine levels in cigarettes have risen between 10% to 30%, with brands such as Marlboro, Newport and Camel, which are reportedly popular with younger smokers, providing significantly more nicotine. The study examined 179 brands manufactured between 1998 and 2004 by PM USA, RJR, Brown & Williamson and Lorillard.

The Lung Cancer Alliance said the federal court ruling and the Massachusetts study raise serious questions about the accuracy and truthfulness of disclosure by tobacco companies in documents filed to the SEC, including fallout and business prospects once their unlawful activities are detected and halted. It called for a full and timely probe by the SEC.

Altria Group Inc. takes its obligations as a publicly traded company very seriously and makes every effort to have its SEC filings comply with the law, said spokespersonn John Sorrells. RJ Reynolds Tobacco Co. spokesperson David Howard said the company believes its SEC filings are fully compliant with applicable disclosure requirements with regard to the federal lawsuit. He noted that RJ Reynolds has appealed the federal court's ruling in that case, and declined to comment on the Massachusetts study except to say company officials are aware of it. Officials from Lorillard and British American Tobacco weren't immediately available to comment, AP said.

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