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Non-Tech : The Enron Scandal - Unmoderated -- Ignore unavailable to you. Want to Upgrade?

To: stockman_scott who wrote (2320)	7/11/2002 9:37:01 AM
From: Glenn Petersen	Read Replies (1) \| Respond to of 3602

Next up: BMY SEC opens probe into Bristol - FT Shares slide after newspaper reports inquiry By Ted Griffith, CBS.MarketWatch.com Last Update: 9:25 AM ET July 11, 2002 marketwatch.com{4B0BF43D-C141-4FA2-908D-1A0B5B88C56A}&siteid=yhoo NEW YORK (CBS.MW) -- Shares of Bristol-Myers Squibb slid 6 percent in premarket trading Thursday after the Financial Times reported that the Securities and Exchange Commission has opened an inquiry into the embattled drug giant's accounting. Shares of Bristol-Myers (BMY: news, chart, profile) fell $1.45 to $21.70 in premarket dealings over Redibook. Investigators are looking into whether Bristol-Myers inflated its revenue by $1 billion last year by raising wholesaler inventories to unsustainable levels, according to the newspaper's account. A Bristol spokesman wasn't immediately available for comment. But the Financial Times report quotes the company as confirming that the federal agency has launched the probe. Thursday's report is just the latest accounting-related revelation to shake Wall Street. Financial markets have been roiled this year by numerous accounting scandals and now the problems appear to be spreading to the pharmaceutical industry. Earlier in the week, Merck & Co. faced questions about how it accounted for $12 billion in revenue. Merck (MRK: news, chart, profile), the No. 2 U.S. drugmaker, has insisted that its practices comply with generally accepted accounting principles. The inquiry is also the latest piece of bad news for Bristol-Myers, which has seen its stock plunge amid a host of problems. The New York City-based drugmaker has already warned of a profit shortfall this year because of bloated wholesaler inventories. Bristol-Myers has also suffered because of its association with ImClone Systems (IMCL: news, chart, profile). Bristol back in September agreed to pay $2 billion dollars for a 20 percent stake in ImClone and marketing rights to the biotech firm's experimental cancer treatment Erbitux. The Food and Drug Administration subsequently rejected the application to market Erbitux and ImClone has been engulfed in an insider-trading scandal. ImClone's former CEO, Samuel Waksal, has been charged with securities fraud and perjury. Ted Griffith is a reporter for CBS.MarketWatch.com