Lord Abbett is suing Valeant Pharmaceuticals contending that the defendant violated New Jersey’s RICO law. The institutional investor is claiming $80B in losses. By invoking the state’s RICO law, Lord Abbett could seek a penalty three times greater than the actual losses it allegedly suffered when the pharmaceutical company’s share price went down.
According to the mutual fund company, it purchased Valeant’s debt securities at a price that was artificially inflated after the pharmaceutical company provided it with information that wasn’t correct. Now, Lord Abbett is alleging violations of RICO law in NJ, which is where Valeant is headquartered.
The institutional investor is not the only party to file a RICO case against Valeant. The other complaints are primarily over allegations that the pharmaceutical company committed fraud by engaging in business practices that were deceptive, including charging too much for drugs. These plaintiffs are claiming hundreds of millions of dollars of losses.
Valeant claims the class action securities fraud cases brought against it are meritless and the company plans to combat all of them. One plaintiff, the Teachers Insurance and Annuity Association of America, College Retirement Equities Fund, claims it suffered over $90M in losses. Also called TIAA-CREF, the retirement fund was appointed the lead plaintiff of a number of consolidated related cases in 2016. TIAA-CREF, contends that between 2/28/14 and 10/21/15, it spent over $215M on over 1.2M Valeant stock shares. The class action plaintiffs are claiming Securities and Exchange Act violations related to alleged misleading and false statements.
The pharmaceutical company has been working hard to rebound in the wake of a number of problems reported, including allegations of accounting issues and price gouging. Its stock price had dropped 85% at one point.
At the SSEK Partners Group, we represent all kinds of institutional investors seeking to recover losses sustained from securities fraud. Please contact us today to request your free case consultation.
What Are the Elements of a Civil RICO Claim in New Jersey?, LexisNexis.com
Lord, Abbett Sues Valeant; Claims $80 Billion In Losses, Seeking Alpha, August 25, 2017