Canadian regulators have ordered top executives and directors of Valeant Pharmaceuticals not to trade in its stock until the troubled drug maker files its annual financial statements for 2015.
The order by the Autorité des Marchés Financiers is in place for 15 days. It technically applies only to Quebec, where Valeant is based, but an AMF spokesman told Reuters the practical effect of such directives is to stop trading across Canada.
Those affected include Valeant CFO Robert Rosiello and activist investor Bill Ackman, who recently joined the board and has a 9% stake in the company.
The AMF said it intends to issue a new cease trade order if Valeant does not make its filings by April 15. “The company is working diligently and intends to make the required filings on or before April 29, 2016,” a Valeant spokeswoman said.
Valeant said last month it would be late filing its reports for 2015 and the first quarter of 2016 because it hasn’t yet obtained audited financial statements.
The company has been under scrutiny for its drug pricing practices (it had a policy of buying old drugs and then raising their prices), distribution system, and accounting, disclosing March 1 it was the subject of an investigation by the U.S. Securities and Exchange Commission.
Valeant has disclosed that about $58 million in sales to specialty pharmacy company Philidor were incorrectly recognized when drugs were delivered to Philidor rather than when they were dispensed to patients. Last month, it put some of the blame for the accounting issues on former CFO Howard Schiller but he has denied any improper conduct.
Schiller is also subject to the cease trade order because he remains a director of the company.
Valeant shares have sunk 74% so far this year and the stock closed down a further 0.5%, at $26.15, in New York trading Friday.