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Valeant to restate earnings

October 24, 2006|From Times Staff and Wire Reports

Valeant Pharmaceuticals International said Monday that it would restate some financial results because of errors in the Costa Mesa company's accounting for stock options.

Based on the review so far, the company said financial statements for 1997 and after should no longer be relied upon because of option accounting errors. Moody's Investors Service reacted to news of the accounting errors by placing Valeant's debt under review for possible downgrade.

In September, Valeant disclosed that it was the subject of an informal Securities and Exchange Commission probe of its stock option granting practices since Jan. 1, 2000. The SEC also is looking into stock trades that were made this spring when the company released results of a drug trial.

Valeant's board named a special committee of independent directors, which is overseeing the review of option practices with the assistance of outside legal counsel.

Because the special committee has not completed its review, the periods affected are still unclear, the company said. The panel found that the company should have used different measurements to date the options.

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