Some stories just never go away.
60 Minutes‘s poor decision four years ago to portray a small pharmaceuticals company as a victim of an alleged misinformation campaign by a hedge fund and research firm has come back to haunt the news magazine, more than once.
At the time of the broadcast, the small company in question, then known as Biovail, was itself under a Securities and Exchange Commission investigation into allegations of accounting fraud, a detail that the news magazine disingenuously downplayed, as I wrote two years ago.
It was a poor decision to take sides in that dispute, which, even at the time, was a jump ball, at best. It was an even poorer decision not to be clear with viewers that the supposed victim was being investigated as a possible wrongdoer, which would make its accusers not predators, but in the right.
Two year after the broadcast, the SEC wound up suing not the hedge fund or research firm but Biovail, charges the company eventually was forced to settle. Then, Biovail pleaded guilty to federal criminal charges that a unit had paid doctors to prescribe one of its heart drugs. Biovail agreed to pay $24.6 million to settle the matter, including a $22 million criminal fine.
Then, in 2009, federal and state courts dismissed Biovail’s claims against the hedge fund, SAC Capital, and the research firm.
Now, finally (one hopes), the successor company to Biovail, Valeant Pharmaceuticals
International, Inc., settled a malicious prosecution case brought by a successor to the research firm, Gradient Analytics, and issued a statement apologizing for the original suit brought by former Biovail management and calling it “regrettable.”
Gradient’s President and CEO Tom Barrett highlights the free-speech aspects of the case:
Our business, founders and employees suffered significantly as a result of the actions of Biovail, its attorneys, private investigators and public relations agents. However, we are pleased to put this matter behind us and move forward. As has been the case throughout this trying period, we remain resolute in our right to freely express our opinions about publicly traded companies and will continue to do so in the future.
The lesson is that once a story starts out wrong, it rarely gets righter.
Dean Starkman Dean Starkman runs The Audit, CJR’s business section, and is the author of The Watchdog That Didn’t Bark: The Financial Crisis and the Disappearance of Investigative Journalism (Columbia University Press, January 2014). Follow Dean on Twitter: @deanstarkman.