Allergan said its U.S. domicile and higher tax code gave it $9 billion more in value to a foreign purchaser; Canada-based Valeant has a tax rate of less than 10 percent.
In an unusual arrangement, Valeant teamed with Bill Ackman's Pershing Square last year in a pursuit of Allergan. Pershing acquired about 10 percent of Allergan and tried to push the Botox maker into a deal.
Pyott, whose company was ultimately sold to Ireland-based Actavis for $66 billion, testified that he hoped the Securities and Exchange Commission will investigate the Ackman-Valeant pursuit, looking into "this novel structure with possible breach of insider trading laws and other securities regulations."
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Pyott said the U.S. tax code needs to be changed because it puts U.S. companies at a disadvantage. But he also took issue with what he called "slow reporting periods" for acquirers of stock, calling the rules "antiquated."
Despite Allergan ultimately going to a different acquirer, Pyott said Pershing recorded a profit of almost $1 billion on the deal.
"You can tell I'm a person of principle, and a lot of people in my shoes just move on," Pyott told the subcommittee. "I'm afraid I feel pretty strongly about a lot of things that happened last year."
Pershing declined CNBC's request for comment. Valeant did not immediately respond to a request.