Shareholders of Biovail Corporation file class-action lawsuit

By Scott Files

Published on April 06, 2006

Named in the suit are SAC Capitol Management LLC and its founder, Gradient Analytics (formerly known as Camelback Research Alliance), Bank of America National Securities New York, LLC, and one of its security analysts.
The suit alleges that the crux of the complaint lies in the defendants' "preparation of a massive and fraudulent disinformation campaign attacking the stock of Biovail and other targeted publicly-traded companies, including the preparation of ostensibly objective, but in fact biased, analyst reports."

The lawsuit also alleges that the "Defendants' scheme thus attacked the very basis for the financial markets -- the free and fair disclosure and dissemination of information concerning publicly-traded stocks."

The class-action suit follows a recent suit filed by Biovail Corporation in the Superior Court of New Jersey. This complaint alleges that analysts manipulated hedge funds in order to drive down the price of Biovail's shares. They further allege that the analysts intended to benefit their own stock positions.

The New Jersey lawsuit, which seeks $6 billion in damages, claims the company's business plans were disrupted, its stock price was attacked and its shareholders were directly and materially damaged.

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