Mutual Fund Sues Valeant Alleging it is a Criminal Enterprise
A mutual fund, citing $80 billion in losses on its investment in drugmaker Valeant, filed a lawsuit alleging securities violations, mail and wire fraud, and violations of the Racketeer Influenced and Corrupt Organizations Act (RICO).
Calling the company a “criminal enterprise,” Lord Abbett & Co named Valeant, its former CEO Michael Pearson, its accounting firm PwC (PricewaterhouseCoopers) and several other former executives in a civil securities fraud lawsuit against the company.
The fund notes in its lawsuit that Valeant bought more than 100 companies between 2008 and 2014. Valeant used a “deceptive business model” that relies on growth through acquisition, with those acquisitions targeting healthcare sectors largely free of competition, such as neurology, dermatology and ophthalmology, the lawsuit says.