Allergan sues Ackman, Valeant, alleging insider trading

Bill Ackman and Michael Pearson
Adam Jeffery | CNBC
Bill Ackman and Michael Pearson

Allergan moved to sue both Valeant Pharmaceuticals and Pershing Square Capital on Friday, lashing both the drug giant and the hedge fund for acting inappropriately by launching a hostile $53 billion takeover of the company.

In a lawsuite filed in the U.S. District Court for the Central District of California, Allergan accused Pershing Square—run by hedge fund big Bill Ackman—and Valeant of insider trading and "other fraudulent practices" when they launched their unsolicited bid.

In a sharply-worded filing, Allergan accused Valeant of being a "debt laden" company that lacks the resources for a bid, and that its financing arrangement with Pershing Square was somehow improper.

"After careful consideration, Allergan decided to file the lawsuit in order to ensure that all of its stockholders have the opportunity to make decisions regarding their investment in the company based on compliant, full and fair disclosures, and to ensure that any stockholders voting on corporate matters acquired their shares in accordance with the law," Allergan said in the filing.