Post by RoNiN on Feb 23, 2006 9:43:00 GMT -4
Biovail's US$4.6B suit claims it's the victim of stock market manipulation
TORONTO, Feb 22, 2006 (The Canadian Press via COMTEX) -- Canadian drug maker Biovail Corp. (BVF) filed a U.S. lawsuit on Wednesday seeking $4.6 billion US in damages from 22 defendants, including SAC Capital Management and its founder Steven Cohen.
The complaint alleges that Biovail was the target of a "massive and fraudulent disinformation campaign" that involved biased analyst reports from purportedly independent sources hired to do "hatchet jobs" to drive down Biovail's stock.
Karen Hinton, a spokeswoman for one of the defendants, Phoenix-based researcher Gradient Analytics Inc., called the charges "completely false, malicious."
"The patently false claims are made by a troubled company with a history of questionable accounting practices and book-cooking incidents that have been the subject of regulatory scrutiny in the United States and Canada and numerous class action lawsuits," Hinton said in a statement e-mailed to The Associated Press late Wednesday.
In a statement, Greenwich, Conn.-based SAC said the allegations are "are outrageous and defamatory and SAC will defend itself and its investment practices vigorously," The Wall Street Journal reported.
None of Biovail's allegations has been proved and the other defendants could not be immediately reached for comment Wednesday after the suit was filed in a New Jersey court.
Biovail's stock has been subject to dramatic ups and downs over the years, often coinciding with announcements by the company about its financial performance, regulatory investigations into the company and operational developments.
Prior to the announcement of the lawsuit, Biovail shares closed Wednesday at $29.44 Cdn at the Toronto Stock Exchange, up 69 cents for the day. In the past five years, they've traded as high as $91 and as low as $16.90.
In essence, the Mississauga, Ont.-based pharmaceutical company - founded by Eugene Melnyk, a Canadian businessman who is now also owner of the Ottawa Senators - claims in its 87-page suit that the defendants were working in the background to drive down its share price for their own advantage.
The suit alleges that since spring 2003 to the present, the defendants orchestrated so-called "bear attacks" against Biovail that artificially drove down the price of its stock to the advantage of SAC and other hedge funds.
The defendants include: several SAC-affiliated companies, Gradient Analytics, Inc., Camelback Research Alliance, Inc., Pinnacle Investment Advisors, Helios Equity Fund, Hallmark Funds, Gerson Lehrman Group, and Gerson Lehrman Group Brokerage Services.
Individuals named as defendants include Steven Cohen, Arthur Cohen, Joseph Healey, Timothy McCarthy, David Maris, James Carr Bettis, Donn Vickrey, Thomas Lehrman, Patrick Duff, and James Lyle, the company said.
The complaint alleges violations of various state laws, including the New Jersey Racketeer Influenced and Corrupt Organizations Act.
If that allegation were proved in court, it could result in the defendants being liable for triple the amount of any damages the plaintiffs are awarded.
TORONTO, Feb 22, 2006 (The Canadian Press via COMTEX) -- Canadian drug maker Biovail Corp. (BVF) filed a U.S. lawsuit on Wednesday seeking $4.6 billion US in damages from 22 defendants, including SAC Capital Management and its founder Steven Cohen.
The complaint alleges that Biovail was the target of a "massive and fraudulent disinformation campaign" that involved biased analyst reports from purportedly independent sources hired to do "hatchet jobs" to drive down Biovail's stock.
Karen Hinton, a spokeswoman for one of the defendants, Phoenix-based researcher Gradient Analytics Inc., called the charges "completely false, malicious."
"The patently false claims are made by a troubled company with a history of questionable accounting practices and book-cooking incidents that have been the subject of regulatory scrutiny in the United States and Canada and numerous class action lawsuits," Hinton said in a statement e-mailed to The Associated Press late Wednesday.
In a statement, Greenwich, Conn.-based SAC said the allegations are "are outrageous and defamatory and SAC will defend itself and its investment practices vigorously," The Wall Street Journal reported.
None of Biovail's allegations has been proved and the other defendants could not be immediately reached for comment Wednesday after the suit was filed in a New Jersey court.
Biovail's stock has been subject to dramatic ups and downs over the years, often coinciding with announcements by the company about its financial performance, regulatory investigations into the company and operational developments.
Prior to the announcement of the lawsuit, Biovail shares closed Wednesday at $29.44 Cdn at the Toronto Stock Exchange, up 69 cents for the day. In the past five years, they've traded as high as $91 and as low as $16.90.
In essence, the Mississauga, Ont.-based pharmaceutical company - founded by Eugene Melnyk, a Canadian businessman who is now also owner of the Ottawa Senators - claims in its 87-page suit that the defendants were working in the background to drive down its share price for their own advantage.
The suit alleges that since spring 2003 to the present, the defendants orchestrated so-called "bear attacks" against Biovail that artificially drove down the price of its stock to the advantage of SAC and other hedge funds.
The defendants include: several SAC-affiliated companies, Gradient Analytics, Inc., Camelback Research Alliance, Inc., Pinnacle Investment Advisors, Helios Equity Fund, Hallmark Funds, Gerson Lehrman Group, and Gerson Lehrman Group Brokerage Services.
Individuals named as defendants include Steven Cohen, Arthur Cohen, Joseph Healey, Timothy McCarthy, David Maris, James Carr Bettis, Donn Vickrey, Thomas Lehrman, Patrick Duff, and James Lyle, the company said.
The complaint alleges violations of various state laws, including the New Jersey Racketeer Influenced and Corrupt Organizations Act.
If that allegation were proved in court, it could result in the defendants being liable for triple the amount of any damages the plaintiffs are awarded.