The Columbia Journalism Review’s Dean Starkman wrote a lengthy article about the glaring problem in a 60 Minutes piece. Lesley Stahl‘s 2006 story about the drug company Biovail focused on the company’s lawsuit against a major hedge fund, alleging the fund used bad information which drove down Biovail’s stock price.
But Biovail had some problems of their own. The company had been under SEC investigation since 2003, a point only loosely touched-on in the 60 Minutes piece. And this week, the SEC sued the drug maker, claiming it “repeatedly overstated earnings and hit losses in order to deceive investors.” The company has already settled the lawsuit for $10 million.
“In fact, the danger to investors was Biovail. So, 60 Minutes had it exactly wrong,” Starkman writes.
CBS isn’t budging. “Biovail’s settlement of these SEC charges does not change our story, which was about how giant, unregulated hedge funds can leverage their power in the stock market,” said a CBS spokesperson in the CJR article.