Biovail has received a notice from the Securities and Exchange Commission alleging violations of federal securities laws. The Toronto-based drugmaker said issues include its accounting for sales and expenses, and alleged shortfalls in disclosure, in 2003 and in connection with a 2002 acquisition. The SEC alleges misleading disclosure concerning the reasons for Biovail’s forecast of a revenue shortfall for the quarter ended Sept. 30, 2003.

Biovail noted that after receiving the so-called Wells notice it has a chance to respond in writing before the SEC makes a formal recommendation on what action, if any, should be brought against the company. Biovail says it’s cooperating.

The beleaguered drug company, which makes the popular Wellbutrin anti-depressant medication, has been under scrutiny for its financial reporting since 2002, when the SEC began an inquiry. A Wells notice from the SEC suggests the federal securities regulator is considering the possibility of civil action in connection with the allegations.

Meanwhile, the company’s non-executive chairman, Eugene Melnyk, the high-profile owner of the Ottawa Senators NHL team, is being probed by the Ontario Securities Commission, and a full hearing is to begin in Toronto on June 4. Melnyk was handed a setback last week when a proposed settlement between him and OSC staff was rejected by a three-member tribunal.

Source: Canada.com[tags]Biovail[/tags]