A Canadian pharmaceutical company that’s suing nearly two dozen parties for allegedly conspiring to drive down its stock price agreed to drop its claim again a Wall Street analyst and the bank he worked for, The Post has learned.
In a sign that Biovail’s 2006 lawsuit against 22 research analysts and hedge funds is collapsing, the Ontario-based company late Friday agreed to drop Banc of America Securities analyst David Maris, and the bank itself, from the suit. Biovail also agreed to pay Banc of America Securities $2 million in legal fees, according to a person familiar with the proceedings.
The suit alleged that Maris intentionally published misleading research on Biovail so that a hedge fund client, a unit of SAC Capital Advisors, could profit from a decline in its stock price.
Though former Biovail Chairman Eugene Melnyk was described as confident about his case against Maris, a Post investigation reveals that Biovail’s evidence wasn’t as compelling as Melnyk claimed.
Though the company alleged that Maris improperly and misleadingly quoted three forensic accounting experts hired by BAS to report on Biovail’s accounting, a review of those reports by The Post shows that Maris accurately quoted their analyses, which ranged from critical to scathing.
Biovail and Melnyk have also been sued by former BAS analyst Jerry Treppel, who claims the company smeared him after he issued a sell rating on its stock.
More recently, Biovail’s lead lawyer in the current battle against short-sellers, Mark Kasowitz, got thrown off the case when his firm was accused of intentionally mishandling evidence by applying materials obtained in the discovery phase of one lawsuit to another case.
Meanwhile, the Securities and Exchange Commission and federal prosecutors are conducting investigations into Biovail’s public statements, accounting and the use of an off-shore research subsidiary.
Maris’ lawyers at BAS declined to comment. A spokesman for Biovail did not respond by press time.