Biovail Corporation (TSX: BVF, NYSE: BVF) announced that its unit would plead guilty and pay $24.6 million to settle fraud charges.
The Department of Justice accused Biovail’s subsidiary of paying doctors to promote its products. The following agreement would ease Biovail Corporation’s ongoing legal expenses.
In March, 2008, the U.S. Securities and Exchange Commission sued Biovail and some of its former officers, alleging that "present and former senior Biovail executives, obsessed with meeting quarterly and annual earnings guidance, repeatedly overstated earnings and hid losses in order to deceive investors and create the appearance of achieving earnings goals. When it ultimately became impossible to continue concealing the company's inability to meet its own earnings guidance, Biovail actively misled investors and analysts about the reasons for the company's poor performance." Biovail settled for $10 million US. Gradient Analytics, successor to Camelback, issued a press release stating that the SEC’s suit "confirms the validity of Gradient’s critical analysis of Biovail but raises serious questions about how companies retaliate against analysts with threats, intimidation, and lawsuits."
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