Allergan lawsuit accuses Valeant, Pershing Square of insider trading

August 5, 2014

Allergan has filed a U.S. lawsuit against Valeant Pharmaceuticals International and Pershing Square Capital Management that alleges insider trading.

 

Irvine, CA and Laval, Quebec-Allergan has filed a U.S. lawsuit against Valeant Pharmaceuticals International and Pershing Square Capital Management that alleges insider trading.

According to the lawsuit, filed Friday, Allergan is claiming that "(Valeant and Pershing Square) violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices, and failed to disclose legally required information."

The suit-which also names Pershing Square Chief Executive Officer William Ackman-claims that between February and April, the hedge fund purchased Allergan stock and securities worth more than $3.2 billion while "fully aware" of Valeant's non-public takeover intentions.

Allergan, in its complaint, is seeking an order to rescind Pershing Square's purchase of the Allergan shares.

 

"After careful consideration, Allergan decided to file the lawsuit in order to ensure that all of its stockholders have the opportunity to make decisions regarding their investment in the company based on compliant, full and fair disclosures, and to ensure that any stockholders voting on corporate matters acquired their shares in accordance with the law," Allergan said in the filing.

In a prepared statement regarding the lawsuit, Valeant and Pershing Square said, "the complaint makes baseless claims.

“Allergan's true purpose in bringing the litigation is an attempt to interfere with shareholders' efforts to call a special meeting,” the statement said.

Valeant Chief Executive Officer J. Michael Pearson added, "Despite Allergan's attempted roadblocks, we remain committed to pursuing this compelling combination, which will create an unrivaled platform for growth and value creation."

Pershing Square is targeting the middle of August for delivering shareholder requests to call a special meeting.

 

“Pershing Square and Valeant are confident that this desperate attempt to delay or avoid the special meeting will not succeed. The independent proxy advisory firms are expected to issue their recommendations on this matter in the near future, and this lawsuit also seeks to distract from those forthcoming recommendations,” the companies said in their statement.

 

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