February 3, 2009 / 7:01 PM / 11 years ago

REFILE-UPDATE 1-Biovail founder Melnyk to pay $1 mln to US SEC

(Refiles to add dropped word ‘at’ in 4th paragraph)

NEW YORK, Feb 3 (Reuters) - Biovail Corp BVF.TO founder Eugene Melnyk has agreed to pay a $1 million fine in a case brought by the U.S. securities regulator over the Canadian drugmaker’s accounting practices, according to court documents.

In March last year, the U.S. Securities and Exchange Commission said Biovail had agreed to pay $10 million to settle a probe into fraudulent accounting. Melnyk and other current and former executives still faced charges.

An order seen on Tuesday was signed by Judge Lewis Kaplan in U.S. District Court in Manhattan on Monday. It said Melnyk is to pay a civil penalty of $1,000,001 within 10 days.

“The agreement includes no admissions or conclusions about culpability in this matter at all,” a spokesman for Melnyk said in a statement.

“At issue in the claim resolved was whether Mr. Melnyk had reporting obligations for shares of Biovail Corporation held by certain trusts settled by Mr. Melnyk,” the statement said.

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.

The complaint by the SEC said that current and former senior Biovail executives were obsessed with meeting quarterly and annual targets and that they overstated earnings and hid losses to deceive investors.

“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,” the SEC said.

On Feb. 9, Canada’s top securities regulator, the Ontario Securities Commission, has scheduled a hearing related to two former Biovail executives.

Last month, Biovail reached a settlement with the OSC in which the company agreed to pay C$5.4 million, including C$1.3 million in legal costs.

The case is U.S. Securities and Exchange Commission v Biovail Corp, Eugene Melnyk, Brian Crombie, John Miszuk and Kenneth Howling in U.S. District Court in New York 08-02979 (Reporting by Grant McCool; Editing by Andre Grenon and Lisa Von Ahn)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below