Plaintiffs voluntarily dismissed defendant Hallmark Funds on April 6, 2007.
According to a press release dated March 26, 2007, Biovail Pharmaceuticals fired Kasowitz, Benson, Torres & Friedman on Friday from its high-profile case against several hedge funds and Wall Street analysts, as questions continued over whether the law firm knowingly used documents covered by a protective order to help bring the suit. 'Due to issues arising from proceedings before Judge [Richard] Owen, Biovail has terminated its relationship with the Kasowitz firm,' the company said through a spokesman. Kasowitz, Benson says it has done nothing wrong in the case, and issued a statement saying the firm had performed 'outstanding legal work for Biovail at all times.' At issue are documents that were part of a separate class action involving Banc of America Securities LLC. BAS claims Kasowitz, Benson and Biovail used material that had been covered in a protective order to pump up the case against the hedge funds. On March 16, lawyers for BAS asked Judge Owen of the Southern District of New York to disqualify Kasowitz as counsel in the case. BAS employed several of the analysts implicated in the Biovail litigation.
A consolidated complaint was filed on January 31, 2007.
On June 27, 2006, the Court entered the Order signed by U.S. District Judge Harold A. Ackerman granting the motion to appoint lead plaintiff and lead and liaison counsel.
According to a press release dated March 24, 2006, a $4 billion class action lawsuit was filed on behalf of shareholders of Biovail Corporation against a variety of defendants including SAC Capital Management LLC and its founder, Gradient Analytics (formerly known as Camelback Research Alliance), and Banc of America Securities LLC, New York, as well as one of its securities analysts. Specifically, the lawsuit states that the action arises from a massive, illegal and continuing stock market manipulation scheme, which targeted the common stock of Biovail and severely harmed its investors, and which has resulted in immense ill-gotten profits for S.A.C. Capital and other extremely powerful hedge funds.
The complaint alleges that, "At the core of this scheme was defendants' preparation of a massive and fraudulent disinformation campaign attacking the stock of Biovail and other targeted publicly-traded companies, including the preparation of ostensibly objective, but in fact biased, analyst reports; defendants' accumulation of short positions in the stock of those companies -- i.e., bets that the stock prices would decline; and defendants' subsequent unleashing of the disinformation campaign and biased analyst reports on the unsuspecting trading public -- thus bringing about the sought-after stock price declines and the resulting immense profits for defendants and commensurate harm to the plaintiff," the lawsuit continues. "Defendants' scheme thus attacked the very basis for the financial markets -- the free and fair disclosure and dissemination of information concerning publicly-traded stocks."
In February, Biovail Corporation filed a lawsuit in the Superior Court in New Jersey alleging that various hedge funds and analysts manipulated the market in order to drive down Biovail's share price to benefit their own stock positions. That lawsuit, which seeks $6 billion in damages, claims the company's business plans were disrupted, its stock price was attacked and its shareholders were directly and materially damaged.