Mutual fund firm Lord Abbett & Co. filed a securities fraud lawsuit against Valeant stating that it bought the company’s debt securities at an inflated price based on misinformation from Valeant, according to a Bloomberg article. The suit also alleged violations of New Jersey’s racketeer influenced and corrupt organizations (RICO) law.
By invoking the RICO law in New Jersey, the article says, Lord Abbett could obtain a penalty three times as large as the losses it sustained from the drop in Valeant’s share price.
This isn't the first time other companies filed RICO suits against Valeant, but they have been over different allegations involving fraud and deceptive business practices. The losses claimed in those RICO cases are small compared to the $80 billion in investor losses claimed in Lord Abbett’s RICO suit, the story said.
Read the Bloomberg report