California Judge Rules Valeant And Ackman Must Face Insider Trading Suit

A California judge has declined a request from Valeant Pharmacueticals International Inc. and Bill Ackman to dismiss a lawsuit accusing them of insider trading in Allergan Inc. shares before they unveiled a $51 billion takeover bid for the company. The ruling was made in the U.S. District Court on Nov. 9. Shareholders, including several state pension funds that owned Allergan stock in the two months before the takeover bid was announced brought the suit, charging Valeant and Ackman with violating federal securities laws. Ackman's hedge fund Pershing Square Capital Management LP had acquired 9.7% of Allergan's shares just ahead of the bid. Valeant shares were slightly lower in after-hours trade, but are down 44% in the year so far, while the S&P 500 has gained 0.8%.