Elan Corporation, PLC 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 original Complaint charges Elan and certain of its officers and directors with violations of the Securities Exchange Act of 1934. 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 January 30, 2002, 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.

In an 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). 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. This 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 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.

On October 25, 2004, Elan announced that it had entered into a provisional agreement with the Staff of 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.

According to the Notice of Settlement date November 8, 2004, the 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.

On April 21, 2005, the Court entered the Orders signed by Judge Richard M. Berman approving the plan of allocation of 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.