August 01, 2014
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Allergan files lawsuit against Valeant, Pershing Square for federal securities violations

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Allergan has filed a lawsuit in the U.S. District Court against Valeant Pharmaceuticals, Pershing Square Capital Management, and its principal, William A. Ackman, citing violations to federal securities laws prohibiting insider trading, engagement in fraudulent practices and failure to disclose legally required information.

The complaint alleges that between February and April 2014, Pershing Square purchased Allergan stock and securities valued at more than $3.2 billion from unknowing Allergan stockholders, with full understanding of Valeant’s non-public takeover intensions. This damaged the value appreciation worth approximately $1.2 billion upon Valeant’s announcement of its initial offer on April 22, 2014, according to an Allergan press release.

Among other remedies, Allergan has asked for a declaration from the court that Pershing Square and Valeant violated insider trading and disclosure laws, in addition to an order repealing Pershing Square’s purchase of the Allergan shares it acquired, according to the press release. Allergan is also reserving the right to seek additional remedies against all parties deemed approriate.