In response to Allergan's insider-trading lawsuit, Valeant and William Ackman have filed a countersuit claiming that Allergan is the one pushing the boundaries of securities regulations.
In early August, Allergan filed a suit that alleged that Valeant, Pershing Square and Ackman violated federal securities laws prohibiting insider trading, engaged in other fraudulent practices and failed to disclose legally required information.
Now, in the countersuit, in addition to the well-known argument that their agreement is legal, Valeant and Ackman point out unusual, secretive activities by Allergan. These activities include Allergan using quotes that were obtained from a secretly recorded conversation Mr. Ackman had with Allergan CEO David Pyott and a call for further investigation into a board member who had served on both the boards of Allergan and Valeant.
Valeant and Ackman also accused Allergan of taking investigative trips to Canada, where they allegedly held meetings with Valeant shareholders who owned no Allergan stock and had no plans to buy any, raising concerns about Valeant and its business model. Valeant and Ackman argue this is “unlawful” since Allergan hasn’t properly disclosed such solicitations.
Read the WSJ article