SEC Investigating Ex-Salix Executives Over Misleading Investors

Reuters reported on Tuesday that the U.S. Securities and Exchange Commission is investigating former top executives at Salix Pharmaceuticals over allegedly misleading investors. The investigation focuses on Salix's 2014 disclosure that its drug inventory levels were higher than previously reported. Reuters added that it is unclear if any civil charges will be made against the executives, including the company's former CEO Carolyn Logan and CFO Adam Derbyshire. Valeant Pharmaceuticals Intl Inc VRX acquired Salix in 2015 for around $11 billion. The pharmaceutical giant did note in a regulatory filing that Salix faces an SEC investigation over disclosures and accounting issues related to its inventory levels. However, it has not been previously disclosed that the investigation also involves Salix's CEO and CFO. Reuters noted that even though the investigation pre-dates Valeant's acquisition of Salix, it still represents a "headache" for the company as it is also battling multiple federal investigations over drug pricing. Shares of Valeant were trading higher by nearly 2 percent late Wednesday morning.