A former
executive at the Canadian pharmaceutical company Valeant was arrested Thursday
in connection with a probe of fraud allegations, according to federal
prosecutors in New York.
Former
executive Gary Tanner was arrested in Pennsylvania while Andy Davenport, former
head of the mail-order pharmacy Philidor Rx Services, was taken into custody in
Arizona.
Federal
prosecutors have reportedly been investigating whether the Canadian company
cheated investors by hiding its connections to the now defunct Philidor in a
bid to boost sales.
The news
pushed shares in the company lower on Wall Street, with stock trading down 4.4
percent shortly after 1600 GMT.
Valeant in
October 2015 severed ties with Philidor RX following sharp criticism over their
relationship. Valeant was forced to restate its financial accounts as a result
of faulty accounting related to Philidor.
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