MutualFundWire.com: T. Rowe Versus the Pharmaceutical Enron

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Friday, August 19, 2016

T. Rowe Versus the Pharmaceutical Enron

Lawyers for T. Rowe Price [profile] are attacking the same now-infamous Canadian pharmaceutical company whose recent misfortunes have plagued another famous mutual fund shop.

William J. Stromberg
T. Rowe Price
Chief Executive Officer

On Monday in federal court in New Jersey, Baltimore-based T. Rowe and Alleghany filed a lawsuit against beleaguered Valeant Pharmaceuticals International, accusing Laval, Quebec-based Valeant and current and former top Valeant executives of perpetrating a "fraudulent scheme" that wiped out "billions in shareholder value." The complaint notes "that media and commentators have dubbed [Valeant] the 'Pharmaceutical Enron'."

The Baltimore Business Journal, the Financial Times, Fortune, Reuters, USA Today, and the Wall Street Journal all covered T. Rowe's lawsuit.

Valeant issued a statement on the new suit, saying that the complaint "repeats allegations and claims" found in a suit filed by TIAA-CREF in October:

As with the original complaint, which was filed in October 2015, Valeant intends to defend itself and cannot comment further on ongoing litigation.

By the FT's count, Valeant's market capitalization has fallen from $90 billion in August 2015 to $11 billion today, an 87.8-percent drop.

T. Rowe and TIAA aren't the only mutual fund shops feeling the Valeant burn. Ruane Cunniff and Goldfarb's Sequoia Fund was once Valeant's biggest shareholder, and this spring RCF's CEO retired in the wake of Valeant's big plunge.

Printed from: MFWire.com/story.asp?s=54650

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