Cease trading, Canadian securities regulator tells Valeant directors

Hold up Valeant.

A Canadian securities regulator has doled out cease trade orders to the company's directors, including outgoing CEO J. Michael Pearson, CFO Robert Rosiello and brand-new board member Bill Ackman, The Wall Street Journal reports. The order restricts each of them from trading Valeant's ($VRX) stock--which has plummeted in recent weeks--on the Toronto Stock Exchange.

As a spokeswoman for the Canadian drugmaker told the WSJ, the company expected the order after it notified the regulator--Autorité des marchés financiers--that it would miss its deadline for submitting its annual financial filings.

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The order is far from the only consequence Valeant has faced on account of that delay, which stemmed from $58 million in accounting missteps related to the company's specialty pharmacy relationship. Missing its original due date put it at risk of defaulting on its debt, and when it laid out that news for shareholders, they went running for the door, sending shares down by 51%. That event triggered action from activist Ackman--who joined Valeant's board shortly thereafter--and a search for Pearson's CEO replacement.

And Thursday, Moody's lowered its credit rating for the company for the second time in recent weeks, downgrading it from B2 to B1. The move "reflects a combination of operating headwinds and management/board changes occurring at a time of elevated financial leverage," it said.

- read the WSJ story (sub. req.)
- read more from Moody's

Special Report: The most influential people in biopharma today - J. Michael Pearson - Valeant

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