Valeant Falls On Report Of Possible Criminal Charges

(RTTNews) - U.S. prosecutors are focusing on Valeant Pharmaceuticals International Inc.'s (VRX, VRX.TO) former CEO and CFO as they build a fraud case against the company that could yield charges within weeks, Bloomberg reported citing people familiar with the matter.

VRX closed Monday regular trading at $17.84, down $2.51 or 12.33 percent. But in the after-hours, the stock gained $0.31 or 1.74 percent.

Responding to a press report regarding the ongoing investigation, Valeant said, "As Valeant previously stated in response to a prior, similar press report, the Company previously disclosed in October 2015 that the United States Attorney's Office for the Southern District of New York commenced an investigation involving Valeant. We have been fully cooperating with the authorities throughout the investigation, and we are in frequent contact and continue to cooperate with the U.S. Attorney's Office for the Southern District of New York."

Valeant said,"We do not comment on rumors about investigations, and cannot comment on or speculate about the possible course of any ongoing investigation Valeant takes these matters seriously and intends to uphold the highest standards of ethical conduct."

Bloomberg reported that authorities are looking into potential accounting fraud charges related to the company's hidden ties to Philidor Rx Services LLC, a specialty pharmacy company that Valeant secretly controlled. Federal prosecutors in Manhattan and agents at the Federal Bureau of Investigation in New York have been investigating the company for at least a year.

Prosecutors are examining the actions of J. Michael Pearson, Valeant's former chief executive officer, and Howard Schiller, the ex-chief financial officer who became interim CEO during a medical leave by Pearson. Prosecution of individual executives could go beyond just those two, the report said, adding that Philidor executives could also be charged.

No charging decisions have been made and the case remains fluid. Among the possibilities, the U.S. Justice Department could settle with the company and later take action against individuals, the report said.