the sec said monday that it charged canadian drug maker bvf and four current and former executives, including former ceo eugene melnyk, with a series of fraudulent accounting schemes and lying to investors and analysts.
the bvf fraud allegedly includes a 10/03 incident where bvf intentionally and falsely attributed nearly half of its failure to meeting third quarter 2003 earnings guidance to a truck accident involving a shipment of bvf's antidepressant, wellbutrin xl, according to the sec complaint.
it turns out bvf lied about the value of the wellbutrin xl on board the truck. bvf's estimate: $10-20 million. other, more independent estimates: $2-4 million.
today, the sec said, at most, there was $5 million of the drug on the truck, and that "Biovail intentionally misstated both the effect of the accident on Biovail's third quarter earnings as well as the value of the product involved in the truck accident. The accident, in fact had no effect on third quarter earnings."
another entry in the long history of accounting scams and fraudulent schemes.