New York – One of the firms implicated in the Biovail lawsuits of recent years was research provider Gradient Analytics. Biovail had sued Gradient for undermining the value of its stock, by releasing research reports that were purportedly designed to prey on the value of Biovail stock. A recent story covers the salient facts that were uncovered by a recent SEC investigation into both Biovail and Gradient and was published in an article by Trading markets.com.
Gradient has had a difficult time over the past several years, vigorously defending itself on one hand and beefing up its policies and procedures on the other.
As it turns out, the charges by Biovail look more like they are based on the vengeful rantings of a litigous Biovail CEO instead of having any basis in fact. Indeed, the article points out that Gradient had acurately pointed out the facts of the Biovailaccounting inconsistencies before the SEC investigation led to the conclusion that improprieties had been committed by the Biovail.
Of the three accounting fraud charges against Biovail, Gradient wrote about two, beginning in December 2002. Gradient also wrote about the truck-accident incident, which Bank of America analyst Dave Maris questioned in his first report on Biovail in October 2003. The other charge, a “phony bill and hold transaction” also was reflected in the unusual trends in accounts receivable noted by Gradient at the time. threats by Biovail CEO caused Banc of America to drop coverage of Biovail.
It was Gradient’s Earnings Quality Model (EQM) that identified the accounting issues. This software also enables users to explore Gradient’s proprietary database of earnings quality information using screening features and set preferences for notification of any updates on any company in their portfolio.
Also of interest is Gradient’s subscription Equity Incentive Model (EIM) which enables users to explore Gradient’s proprietary database of information pertaining to equity compensation issues.