No charging decisions have been made and the case remains fluid, the people said. The U.S. Justice Department could settle with the company and later take action against individuals, one person said.
Valeant shares dropped more than 12 per cent to $17.84 in New York,
the lowest closing pricing since June 2010. The company's most actively traded debt, $3.25 billion of 6.125-per-cent notes due in 2025, dropped 2 cents to 77 cents at 4:09 p.m. in New York according to Trace, the bond price reporting system of the Financial Industry Regulatory Authority.
Prosecution of top corporate executives over accounting fraud allegations is a rare step, and the complexity of such cases can make them hard to bring. More recently, enforcement efforts shifted toward Wall Street in the wake of the financial crisis. Top officials at the U.S. Securities and Exchange Commission (SEC), where many accounting fraud investigations begin, have called for a renewed focus on corporate accounting improprieties over the past few years, but so far few cases involving companies as large as Valeant have emerged.
Laval, Quebec-based Valeant,
once a darling of Wall Street, has drawn scrutiny in recent years for its practice of acquiring drugs and dramatically increasing their prices.