U.S. judge denies SEC request for Biovail judgment

NEW YORK, June 16 (Reuters) - A 2008 lawsuit by U.S. market regulators alleging that three former executives of Canadian pharmaceutical company Biovail Corp BVF.TO made false statements could not yet be decided, a judge ruled on Wednesday.

An order by Manhattan federal court judge Lewis Kaplan denied a request by the U.S. Securities and Exchange Commission for partial judgment before trial in its case against company founder Eugene Melnyk and former executives, Brian Crombie and John Miszuk.

The SEC alleged that Melnyk and Crombie misled investors in 2003 statements on a conference call that an accident involving a truck carrying the drug Wellbutrin XL would have a negative impact on third quarter revenue. Melnyk and Crombie disputed the SEC's claim that they then repeated the statements to media, bankers and on a road show.

"As the court cannot conclude that any of the statements were material as a matter of law, summary judgment is inappropriate," Kaplan's written ruling said.

As for the SEC's request for judgment against Miszuk over allegations he signed Biovail's forms for the second and third quarters of 2003, Kaplan wrote that it was undisputed that Biovail used the wrong Canadian-U.S. dollar exchange rate to account for some of Biovail's outstanding Canadian dollar-denominated debt.

"Miszuk's actions here with respect to the accounting issue may well reflect mismanagement and possibly negligence," the judge's order said. "Perhaps they were worse. But this record does not compel the conclusion that he acted with an 'egregious refusal to see the obvious, or to investigate the doubtful" as alleged by the SEC.

The case is SEC v Biovail Corp et al, U.S. District Court for the Southern District of New York, No. 08-2979. (Reporting by Grant McCool; Editing by Bernard Orr)