Officials at Canadian pharmaceutical maker Biovail said the staff of the Ontario Securities Commission (OSC) has made allegations against company Chairman Eugene Melnyk and a former director, among others.
The OSC, which regulates securities in the province of Ontario, charges that Melnyk violated disclosure and reporting regulations, and former director Roger Rowan violated insider trading regulations, according to the Associate Press.
A hearing has been scheduled for Sept. 21. The OSC is seeking penalties of up to $1 million Canadian (approximately $884,000 U.S.) for each alleged violation.
In a statement, Biovail said its board and management team “express their continued confidence in Mr. Melnyk’s ability to lead the corporation” as chairman. Biovail also said it will not be commenting further on the matter. Melnyk issued his own statement, asserting that, “I have always conducted my personal and business affairs with the highest degree of honesty and integrity,” reported the AP.
OSC alleges that Melnyk did not meet certain reporting obligations concerning Biovail shares owned by four trusts, noted the wire service. However, Melnyk disputed the charges.
The embattled pharmaceutical company is one of a handful of companies that are suing a number of hedge funds for allegedly engaging in stock manipulation.
Melnyk was chairman and chief executive officer of Biovail from December 2001 to October 2004. He resigned as CEO in October 2004. The following month, he became executive chairman of the Biovail board. He has been a director of Biovail since March 1994 when Biovail’s predecessors, Trimel Corp. and Biovail Corp. International, merged.