Biovail's Travails Drag "60 Minutes" Into Controversy
The Columbia Journalism Review, the pre-eminent publication and authority on what we in the business refer to as "The Big J"--as in Journalism--is calling out CBS' "60 Minutes" in an article just posted on the web with the somewhat explosive headline, "60 Minutes Blows Biovail Story."
The CJR piece was written in the wake of the Securities and Exchange Commission charging the company and four current or former execs with "chronic" fraud.Biovail settled for $10 million bucks. The four men, including the biotech company's founder and former CEO Eugene Melnyk, are fighting it.
"60" had done a story about Biovail's and Mr. Melnyk's allegations that hedge funds conspired with analysts to push down the stock price of Canada's biggest publicly-traded drug company. CJR Managing Editor Dean Starkman claims the TV newsmagazine made the company look like the victim of aggressive short-sellers (investors betting the shares would go lower).
Starkman concludes: "One can only hope "60 Minutes" viewers listened to the shorts and not "60 Minutes". But the ongoing SEC probe of Biovail was always going to be a time bomb under this story. This week, it blew up."
He also quotes from a press release issued the other day by Gradient Analytics, one of the research firms targeted by Biovail, that referred to my interview with the SEC's Mark Schonfeld:
The Scottsdale, Arizona, company noted that the chief of the SEC’s New York office, Mark Schonfeld, credited analysts who raised questions about Biovail.
“Part of the credit does go to people who were asking a lot of questions and were rightfully skeptical when the company was making representations that just didn’t quite make sense,” said Schonfeld in a CNBC interview.
Starkman says that a spokeswoman for Lesley Stahl, who did the piece, said Stahl was too busy to answer CJR's questions. But a spokesman for the show sent him this email:
"Biovail’s settlement of these SEC charges does not change our story, which was about how giant, unregulated hedge funds can leverage their power in the stock market.”
The four Biovail guys are scheduled to appear for an Ontario, Canada securities hearing on April 22nd. But I wonder if I might see them before that at a Brooklyn Federal Courthouse. The Newark Star-Ledger reports the feds are conducting their own criminal investigation.
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