![]() ![]() Biovail intentionally misstated foreign exchange losses that caused its second quarter 2003 loss to be understated by about $3.9 million.Biovail concocted a fictitious bill and hold transaction to record approximately $8 million in revenue in the second quarter of 2003.Biovail, over several reporting periods in 20, improperly moved off its financial statements and onto the financial statements of a special purpose entity approximately $47 million in expenses incurred in the research and development of some of Biovail's products.The SEC's complaint also alleges three accounting schemes that affected reporting periods from 2001 to 2003. The accident, in fact, had no effect on third quarter earnings. Led by Melnyk, Biovail intentionally misstated both the effect of the accident on Biovail's third quarter earnings as well as the value of the product involved in the truck accident. The SEC's complaint alleges that in October 2003, Biovail and some of its executives schemed to deceive investors and analysts by falsely attributing nearly half of Biovail's failure to meet its third quarter 2003 earnings guidance to a truck accident involving a shipment of one of Biovail's products. "In an effort to conceal the fraud, Biovail's senior officers intentionally misled the company's auditors and the investing public, showing their complete disregard for their responsibilities to shareholders." Schonfeld, Director of the SEC's New York Regional Office. "We allege that Biovail and senior executives engaged in a pattern of systemic, chronic fraud that impacted its public filings of quarterly and annual reports over the course of four years," added Mark K. ![]() It demonstrates the Commission's commitment to holding individuals accountable when they create a corporate culture of fraud and deceit," said Linda Chatman Thomsen, Director of the SEC's Division of Enforcement. "This is another case involving the tone at the top of a public company. Four current or former Biovail senior executives still face SEC charges: former chairman and CEO Eugene Melnyk former CFO Brian Crombie current controller John Miszuk and current CFO Kenneth G. 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.īiovail settled the SEC's charges and will pay a $10 million penalty. The SEC's complaint alleges 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. Washington, D.C., MaThe Securities and Exchange Commission today charged Canadian pharmaceutical company Biovail Corporation and its former CEO, former CFO, and two current senior executives with engaging in a number of fraudulent accounting schemes and making a series of misstatements to analysts and investors. SEC Charges Biovail Corporation and Senior Executives With Accounting Fraud FOR IMMEDIATE RELEASE Press Release: SEC Charges Biovail Corporation and Senior Executives With Accounting Fraud 2008-50 Mar.
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