New York—The Columbia Journalism Review has been slamming 60 Minutes and Lesley Stahl for the program’s coverage of Biovail’s accusations of collusion between Gradient Analytics and hedge funds to produce negative research coverage. CJR says 60 Minutes “botched a business story by using, of all companies, Biovail Corp. as an example of a supposedly honest firm under attack by, according to the piece, a marauding short-selling hedge fund in cahoots with a supposedly on-the-take independent research firm.”
Although the 60 Minutes program ran two years ago, CJR is using Biovail’s recent guilty plea on criminal charges of illegally paying doctors to prescribe a heart drug, along with the SEC’s suit against Biovail for accounting fraud, as catalysts for re-examining the original coverage.
In CJR’s view, the most egregious flaw in the program was that the reporters knew at the time that Biovail was under SEC investigation and still spun the story from Biovail’s perspective: “What made the mistake [portraying Biovail as an honest firm being preyed upon by hedge funds and tainted research] particularly grave was that 60 Minutes knew that Biovail was, at the time the piece was aired, under SEC investigation. The CBS news magazine buried word of the investigation in a denial by the hedge fund.”
The good news that Gradient Analytics is doing just fine, thank you, despite extensive legal costs and distractions from the lawsuits from Biovail and Overstock.com (another troubled firm which, like Biovail, sued hedge funds and Gradient). Gradient, which has strong quantitative research capabilities in addition to the forensic research products attacked by Biovail and Overstock, has been vindicated throughout the process. We’re sure they are pleased to see CJR weigh in against 60 Minutes, even it is two years after. Better late than never.
To see the full Columbia Journalism article go to http://www.cjr.org/the_audit/60_minutess_biovail_trainwreck.php