Biovail Execs Face SEC Charges; Company Settles
March 31, 2008
According to Reuters, the U.S. Securities and Exchange Commission said recently that Canada''s Biovail Corp will pay $10 million to settle a probe into fraudulent accounting, but the drugmaker''s founder, Eugene Melnyk, and three other current and former executives still face charges.
In addition, Canada''s major securities regulator, the Ontario Securities Commission, said it has scheduled a hearing for April 22 on issues concerning Biovail.
Melnyk, Biovail''s former chief executive and chairman, who is also its largest shareholder, said the "vast majority" of the allegations in the case do not pertain to him.
Melnyk is also owner of the Ottawa Senators of the National Hockey League.
In settling with the SEC, Biovail, Canada''s largest publicly traded pharmaceutical company, did not admit to any wrongdoing and agreed to have an independent consultant examine its accounting and related functions.
Still facing SEC charges are former Chief Financial Officer Brian Crombie, current Controller John Miszuk and current CFO Kenneth Howling.
None of the charges against Melnyk or the other three have been proved in court.
Calls to lawyers for the current and former executives were not immediately returned.
The SEC investigation includes an incident in 2003 when Biovail attributed a failure to meet its third quarter forecast to a trucking accident involving a shipment of the company''s Wellbutrin drug.