UNITED STATES OF AMERICA

UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934

Release No. 100808 / August 22, 2024

ADMINISTRATIVE PROCEEDING

File No. 3-19899

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Valeant Pharmaceuticals International,

Inc., n/k/a Bausch Health Companies Inc., :

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Respondent.

In the Matter of

ADMINISTRATIVE PROCEEDING

File No. 3-19900

In the Matter of

J. Michael Pearson,

Respondent.

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ADMINISTRATIVE PROCEEDING

File No. 3-19901

In the Matter of

Howard B. Schiller,

Respondent.

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ADMINISTRATIVE PROCEEDING

File No. 3-19902

In the Matter of

Tanya R. Carro, CPA,

Respondent.

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ORDER APPROVING

CORRECTED PLAN OF

DISTRIBUTION

On July 31, 2020, the Commission issued four separate, but related settled orders

(collectively, the “Orders”) against Valeant Pharmaceuticals International, Inc. n/k/a Bausch

Health Companies Inc. (“Valeant”), 1 J. Michael Pearson (“Pearson”), 2 Howard B. Schiller

(“Schiller”), 3 and Tanya R. Carro, CPA (“Carro”) 4 (collectively, the “Respondents”). In the

Orders, the Commission found that beginning in 2014, when announcing certain GAAP and nonGAAP financial measures, Valeant, among other things, misstated revenue transactions and

included erroneous revenue allocations. For example, the Orders found that for five consecutive

quarters Valeant, former CEO Pearson, former CFO Schiller, and former controller Carro, touted

double-digit same store organic growth, a non-GAAP financial measure that represented growth

rates for businesses owned for one year or more. Much of that growth came from sales to

Philidor, a mail order pharmacy Valeant helped establish, fund, and subsidize. The Orders found

that Valeant improperly recognized revenue relating to Philidor sales and did not disclose its

unique relationship with, or risks related to, Philidor in SEC filings and earnings and investor

presentations. Valeant ended its ties to Philidor in October 2015 and restated its 2014 financial

statements in April 2016, reducing the revenue that was improperly recognized.

The Orders also found that Valeant failed to disclose the material impact of certain

revenue it received from drug wholesalers following a 500% increase of the price of a single

drug that Valeant acquired in April 2015. Valeant erroneously attributed the resulting revenue to

more than 100 unrelated products and did not record any as attributable to that drug.

Additionally, in its SEC filings and earnings presentations for the second and third quarters of

2015 and its 2015 year-end report, Valeant failed to disclose the impact of that allocation on its

GAAP and non-GAAP financial measures.

In the Orders, Valeant, Pearson, Schiller, and Carro were ordered, among other things, to

pay civil penalties in the amount of $45,000,000; $250,000; $100,000; and $75,000, respectively,

for a total of $45,425,000 to the Commission. In each of the Orders, the Commission also

created a Fair Fund, pursuant to Section 308(a) of the Sarbanes-Oxley Act of 2002, so the

penalties collected can be distributed to harmed investors.

Respondents paid a collective total of $45,425,000.00 in civil penalties, as ordered. On

January 8, 2024, the Commission ordered that the Fair Funds created in the Orders be

consolidated for the purposes of distribution administration (the “Fair Fund”). 5 The Fair Fund

See Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and

Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order,

Securities Act Rel. No. 10809 (July 31, 2020) (Admin. Proc. File No. 3-19899).

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See Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and

Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order,

Securities Act Rel. No. 10810 (July 31, 2020) (Admin. Proc. File No. 3-19900).

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See Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and

Section 21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order,

Securities Act Rel. No. 10811 (July 31, 2020) (Admin. Proc. File No. 3-19901).

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See Order Instituting Public Administrative and Cease-and-Desist Proceedings Pursuant to Section 8A of the

Securities Act of 1933, Sections 4C and 21C of the Securities Exchange Act of 1934, and Rule 102(e) of the

Commission’s Rules of Practice, Making Findings, and Imposing Remedial Sanctions and a Cease-and-Desist

Order, Securities Act Rel. No. 10812 (July 31, 2020) (Admin. Proc. File No. 3-19902).

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Order Consolidating Fair Funds and Setting Deadline to Submit Proposed Plan of Distribution Exchange Act Rel.

No. 99284 (Jan. 8, 2024).

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consists of the $45,425,000.00 paid by the Respondents and has been deposited in a

Commission-designated account at the U.S. Department of the Treasury, and any accrued

interest will be added to the Fair Fund.

On June 24, 2024, the Division of Enforcement, pursuant to delegated authority,

published a Notice of Proposed Plan of Distribution and Opportunity for Comment (“Notice”), 6

pursuant to Rule 1103 of the Commission’s Rules on Fair Fund and Disgorgement Plans

(“Commission’s Rules”); 7 and simultaneously posted the Proposed Plan of Distribution (the

“Proposed Plan”). The Notice advised interested persons that they could obtain a copy of the

Proposed Plan from the Commission’s public website or by submitting a written request to Amy

Sumner, United States Securities and Exchange Commission, Byron Rogers Federal Office

Building, 1961 Stout Street, Suite 1700, Denver, CO 80294-1961. The Notice also advised that

all persons desiring to comment on the Proposed Plan could submit their comments, in writing,

within 30 days of the Notice. The Commission received no comments on the Proposed Plan

during the comment period.

The Proposed Plan provides for the distribution of the Net Available Fair Fund 8 to those

who were harmed by the Respondents’ conduct described in the Orders, in connection with

improper revenue recognition and materially misleading disclosures as calculated by the

methodology used in the Plan of Allocation in the Proposed Plan.

The Division of Enforcement now requests that the Commission approve the Proposed

Plan, as corrected. 9

Accordingly, it is hereby ORDERED, pursuant to Rule 1104 of the Commission’s

Rules, that the Proposed Plan is approved, and the approved Corrected Plan of Distribution

shall be posted simultaneously with this order on the Commission’s website at www.sec.gov.

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For the Commission, by the Division of Enforcement, pursuant to delegated authority. 11

Vanessa A. Countryman

Secretary

Exchange Act Rel. No. 100410 (June 24, 2024).

17 C.F.R. § 201.1103.

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All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Proposed

Plan.

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The Proposed Plan has been corrected to fix numeration of the footnotes and the citation referenced in footnote 8.

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17 C.F.R. § 201.1104.

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17 C.F.R. § 200.30-4(a)(21)(iv).

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