Additionally, the Commission found that Valeant, Pearson, Schiller, and Carro violated Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, as well as Rules 12b-20, 13a-1, 13a-11, and 13a-13 and Rule 100(b) of Regulation G.
Valeant and its three former executives’ violations were in connection with the company’s financial disclosures related to Philidor Services LLC, a mail-order pharmacy that contributed to its significant organic growth in the United States. The company helped establish Philidor in 2013.
According to the SEC, the company improperly recognized its revenue related to Philidor sales and failed to disclose its risks or unique relationship with the mail-order pharmacy in its filings with the securities regulator and during its earnings and investor presentations.
Additionally, the SEC alleged that Valeant did not disclose the material impact of certain revenue it received from drug wholesalers after a 500% increase of a single drug it acquired in April 2015. The company allegedly mistakenly attributed the resulting revenue to more than 100 unrelated products and failed to record any as attributable to that drug.
