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Valeant Takes Another Hit Following Potential Fraud Investigation

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Valeant Takes Another Hit Following Potential Fraud Investigation

Valeant Pharmaceuticals Intl Inc (NYSE: VRX) plummeted more than 12 percent Monday afternoon and hit a new 52-week low of $17.75 following a Bloomberg report that U.S. prosecutors are focusing on the company's ex-CEO and ex-CFO.

Bloomberg reported shortly before Monday's market close that U.S. authorities are investigating potential accounting fraud charges related to the company's secretive ties to Philidor, a specialty pharmacy company that Valeant actually controlled.

The Bloomberg report made no mention of activist investor, board member and major shareholder Bill Ackman, who is seeing large losses on his Valeant trade, among several other stocks.

Bloomberg said Federal prosecutors in Manhattan and Federal Bureau of Investigation agents in New York have been investigating the company for at least a year. In addition, U.S. prosecutors in Boston and Philadelphia are believed to be conducting separate inquiries of Valeant.

Valeant issued a statement, which stated it already acknowledged in October 2015 that the U.S. 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," the company added. "We do not comment on rumors about investigations, and cannot comment on or speculate about the possible course of any ongoing investigation."

After closing Monday's session at $17.84, shares of Valeant rebounded early Tuesday morning and gained nearly 4 percent to trade at $18.53 about two hours ahead of the opening bell.

Posted-In: Bill Ackman BloombergBiotech News Health Care Rumors Legal General Best of Benzinga

 

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