LAWSUITS NEWS & LEGAL INFORMATION
Accounting Inaccuracies
New York, NY: (Mar-24-08) The US Securities and Exchange Commission brought charges against Biovail Corp., a Canadian pharmaceutical company, and several of its current and former top executives, alleging accounting fraud. The commission's lawsuit claimed that the company overstated earnings and hid losses to deceive investors and meet quarterly and annual earnings targets. It said that after the scheme failed, the company actively misled investors and analysts about the reasons for the company's poor performance.
The suit named Biovail's founder, former chairman and former chief executive officer, Eugene Melnyk, 48 years old and former chief financial officer, Brian Crombie, 47, as defendants among others. The suit also named current Biovail finance chief, Kenneth Howling, 49, and current Biovail controller John Miszuk, 54. Records show that the company and the four individuals also face an investigation by the Ontario Securities Commission.
The complaint alleged that Biovail engaged in three different schemes between 2001-03. One scheme dealt with the company improperly shifting $47 million of research-and-development expenses from its books, using a fraudulent transaction to record $8 million of revenue in 2003. Another claim was over Biovail understating foreign-exchange losses in the second quarter of that year, inflating net income by 18%. As part of a settlement reached, the company agreed to a $10 million payout to resolve allegations. [THE WALL STREET JOURNAL: SEC CHARGES BIOVAIL OFFICERS WITH FRAUD]
Published on Mar-25-08
The suit named Biovail's founder, former chairman and former chief executive officer, Eugene Melnyk, 48 years old and former chief financial officer, Brian Crombie, 47, as defendants among others. The suit also named current Biovail finance chief, Kenneth Howling, 49, and current Biovail controller John Miszuk, 54. Records show that the company and the four individuals also face an investigation by the Ontario Securities Commission.
The complaint alleged that Biovail engaged in three different schemes between 2001-03. One scheme dealt with the company improperly shifting $47 million of research-and-development expenses from its books, using a fraudulent transaction to record $8 million of revenue in 2003. Another claim was over Biovail understating foreign-exchange losses in the second quarter of that year, inflating net income by 18%. As part of a settlement reached, the company agreed to a $10 million payout to resolve allegations. [
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