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Case Status:    SETTLED
On or around 04/26/2005 (Date of order of final judgment)

Filing Date: February 04, 2002

On April 21, 2005, the Court entered the Orders signed by Judge Richard M. Berman approving the plan of allocation nof settlement proceeds and further awarded co-lead counsel attorneys’ fees of 12% of the Settlement Fund or $9,000,000 and reimbursement of expenses in an aggregate amount of $452,840.2 together with interest earned. On April 26, 2005, the Court entered the Final Judgment and Order, approving the settlement and dismissing the action.

On October 4, 2004, the Company announced that it had included in its financial statements a reserve of $55 million, net of insurance coverage, to cover the Company's estimated liability related to the SEC investigation and the shareholder class action pending in the U.S. District Court for the Southern District of New York. The terms of the class action settlement are subject to final Court approval. A hearing is scheduled for February 18, 2005, at which the Court will consider final approval of the settlement.

According to the Notice of Settlement date November 8, 2004, the Settlement Fund (“Settlement Fund”) consists of $75 million in cash, plus interest thereon. A settlement hearing has been set for February 18, 2005 before Honorable Richard M. Berman.

As summarized by the same notice, by Order dated August 7, 2002, the Court consolidated all such actions under the caption In re Elan Securities Litigation, No. 02-cv-0865(RMB)(FM) (the “Litigation” or the “Action”)). On December 3, 2002, the Court appointed S&T Investment Company and Dr. Norman Lefkovitz as Lead Plaintiffs and approved Lead Plaintiffs’ choice of counsel, and by Order dated December 11, 2002, appointed plaintiffs Gregory Van Kipnes, Michael Pennock, Randy Spokane and Charles Tighe as members of Plaintiffs’ Executive Committee. On or about January 24, 2003, Lead Plaintiffs filed a Consolidated Complaint (the “Complaint”). The Complaint generally alleges that the Defendants violated §§10(b), 14(a) and 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. §§78j(b), 78n(a) and 78t(a)) and Rule 10b-5 of the Securities and Exchange Commission (17 C.F.R. §240.10b-5) and §§11, 12(a)(2) and 15 of the Securities Act of 1933 (15 U.S.C. §§77k, 77l(a)(2) and 77o). Counsel for Lead Plaintiffs and counsel for the Defendants have engaged in substantial arm’s-length negotiations in an effort to resolve the Litigation. These negotiations included conducting numerous telephone conferences between the parties and mediations before Judge Nicholas Politan (Ret.), during which the terms of any agreement were extensively debated and negotiated. … A May 18, 2004 report issued by United States Magistrate Judge Frank Maas recommended to United States District Judge Richard M. Berman dismissal of all the accounting claims and disclosure claims related to Elan’s transactions with Joint Business Ventures during the Class Period, as well as dismissal of all claims asserted against Elan’s outside auditors. The report also recommended that plaintiffs be permitted to proceed with claims that Elan failed to adequately disclose information regarding other transactions during the Class Period, but not how the company accounted for such transactions. On October 25, 2004, Elan announced that it had entered into a provisional agreement with the Staff of the Securities and Exchange Commission (the "SEC") to settle the investigation by the SEC's Division of Enforcement that commenced in February 2002, whereby Elan agreed to pay a civil penalty of $15 million without admitting to any of the allegations regarding violations alleged in a complaint to be filed by the SEC. In connection with the SEC settlement, the SEC will not require Elan to restate or adjust any of its historic financial results or information. This provisional agreement is subject to final approval by the SEC Commissioners.

The original complaint charges Elan and certain of its officers and directors with
violations of the Securities Exchange Act of 1934. Elan is an international
pharmaceutical company focused on the discovery, development and marketing of
therapeutic products and services in neurology, pain management, oncology,
infectious disease and dermatology. The complaint alleges that during the Class
Period, defendants reported favorable financial results for Elan, while concealing expenses through joint ventures, recognizing income from companies in which Elan had invested (round-trip revenue) and concealing material related-party transactions. As a result, Elan's stock traded as high as $65.

Then, on 1/30/02, The Wall Street Journal published an article on Elan's accounting entitled, "Research Partnerships Give Irish Drug Maker Rosy Financial Glow." The article quoted Lynn Turner, a former chief accountant for the SEC: "What's the real substance? ... I'm taking money out of one pocket and putting it in another. That is a charade." The article went on to describe several transactions in which Elan had recognized revenue where it had funded the entire purchase price. On this news, Elan's stock dropped to as low as$22.40, before closing at $29.25 on volume of 37.1 million shares.


Sector: Healthcare
Industry: Biotechnology & Drugs
Headquarters: Ireland


Ticker Symbol: ELN
Company Market: New York SE
Market Status: Public (Listed)

About the Company & Securities Data

"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 02-CV-00865
JUDGE: Hon. Whitman Knapp
DATE FILED: 02/04/2002
CLASS PERIOD END: 02/01/2002
  1. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 ·
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 02-CV-00865
JUDGE: Hon. Whitman Knapp
DATE FILED: 01/24/2003
CLASS PERIOD END: 02/01/2002
  1. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  2. Pomerantz LLP (New York)
    600 Third Avenue, Pomerantz LLP (New York), NY 10016
    212.661.1100 212.661.8665 ·
No Document Title Filing Date
No Document Title Filing Date