Deja Vu at Biovail
If the fraud charges against Biovail lodged by the SEC yesterday seem familiar, there's good reason. Gradient Analytics, the victim of a junk lawsuit by Biovail, noted in a statement today that the SEC's charges against the crummy Canadian drug maker track closely with what Gradient said about the company quite some time ago.
Gradient says in its release, not online at the moment, that "its research into Biovail from 2002 to 2003 identified the same issues that are now the centerpiece of the accounting-fraud charges supporting the U.S. Securities and Exchange Commission complaint against the pharmaceutical company."
Gradient noted that Mark Schonfeld, head of the SEC's New York office, gave credit to analysts who raised questions about Biovail, saying on CNBC that “Part of the credit does go to people who were asking a lot of questions and were rightfully skeptical when the company was making representations that just didn’t quite make sense.”
That's lovely. But it leaves open a question that continues to linger: why hasn't the SEC acted against Overstock.com, which also is the subject of accurate reasearch by Gradient, and which also has lashed out against the firm with a lawsuit?
The SEC should punish Biovail and other corporate slimeballs for their retaliation against analysts and short-sellers, and force them to terminate their blame-shifting lawsuits. It's lamentable that a Spitzer-like state regulator is not leading the charge on this -- which might explain the venom that Overstock.com CEO Patrick Byrne expressed toward Spitzer recently.
© 2008 Gary Weiss. All rights reserved.