Probes Report Expects 'Array' Of SEC Investigations At Valeant

• Shares of Valeant Pharmaceuticals Intl Inc VRX rebounded nearly 10 percent Friday morning but are still lower by more than 50 percent over the past three months.
• Probes Reporter is expecting an "array" of "protracted, distracting, and expensive investigations" to be handed down by the SEC.
• Probes Reported noted that as of September 30 there were no ongoing SEC investigative activity at Valeant, but they expect this will change.

Shares of Valeant Pharmaceuticals continued to trade with heavily volatility on Friday. By late morning, the stock gained nearly 10 percent but have still lost more than 50 percent over the past three months. Probes Reporter, an independent investment research firm that focuses on public company interactions with the Securities and Exchange Commission, said in a report on Friday that it now expects Valeant to face an "array of protracted, distracting, and expensive investigations" from the SEC. Probes Reporter is expecting the SEC and their Canadian counterparts to contact Valeant sometime in the "next 10 days or so." The report added that "there's just too much going on" at the company for the regulators to overlook. Meanwhile, new FDA investigations could also begin. The report cited four key items that may warrant an SEC investigation: 1) "significant" negative media attention that influenced the stock's direction, 2) an accounting or disclosure controversy, 3) "significant" stock price volatility of more than 10 percent, and 4) referrals from other government agencies, including criminal investigations. "Given the complexity of the issues, paired with the company's very vocal proclamations of innocence, you should expect these investigations will be protracted, time-consumer, distracting, and expensive," the report said. "None of that is good for investors." Meanwhile, a Canadian regulator has already said that no formal investigation of Valeant had started but it is "very seriously" watching the situation. The report suggested that "it's highly unusual for any regulator to comment in this fashion." In other words, "this is not good for Valeant." Finally, Probes Reporter did acknowledge that Valeant has been "about average" when it comes to disclosing regulatory probes. Accordingly, the company could announce an SEC probe either ahead of or during the opening remarks in its conference call scheduled for Monday morning. "Brace yourself."