Compliance September 4, 2009

Judge Tosses Schering-Plough Stock-Drop Suit

A federal judge has thrown out a stock-drop lawsuit against drugmaker Schering-Plough, but has permitted plaintiffs to strengthen its allegations of wrongdoing and refile it.

Reported by

U.S. District Judge Dennis M. Cavanaugh of the U.S. District Court for the District of New Jersey said the action was necessary because participants’ initial attempt to levy fiduciary breach allegations fell short of proving the company had advance knowledge of clinical trial results for the drug Vytorin. Vytorin is a combination drug comprised of Merck & Co.’s cholesterol drug Zocor and Schering-Plough’s drug Zetia.

The retirement plan participants allege the drugmaker deliberately suppressed the results to inflate Schering-Plough stock and that eventual disclosure of the findings caused the share price to drop and participants with retirement investments in company stock to lose assets.

The study results were allegedly delayed on various occasions until Merck finally announced in January 2008 that the study had determined there was no statistically significant difference between patients treated with Vytorin versus patients treated with Zocor or Lipitor.

Cavanaugh said he was mindful that the court had refused to dismiss a similar lawsuit filed by Merck employees (see “Merck Loses Challenge to Company Stock Fiduciary Claims”), but contended the Merck stock-drop case put forward stronger, more compelling evidence than the Schering-Plough suit.

The case is In re Schering-Plough ERISA Litigation, D.N.J., No. 08-CV-1432 (DMC).

Deals & People September 3, 2009

Allegiant to Merge with PNC Capital Advisors

The PNC Financial Services Group, Inc., has announced its intention to merge Allegiant Asset Management Company with its affiliate, PNC Capital Advisors, Inc., on or about September 29, to form PNC Capital Advisors, LLC.

Reported by

Allegiant was a division of National City Corporation, which was acquired by PNC on December 31, according to the announcement. 

Allegiant currently manages the Allegiant Funds and the Allegiant Advantage Fund. According to the press release, on September 30, PNC Capital Advisors, LLC will begin acting as investment advisor and co-administrator to both.

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Kevin McCreadie, who has been chief executive officer of PNC Capital Advisors, Inc., since 2004, will retain his position in the new organization. 

The new registered investment adviser will have a combined $37 billion in assets under management and offer an array of financial products, including:

  • large-cap equities
  • mid-cap equities
  • small-cap equities
  • international equities
  • taxable and municipal fixed income. 

The combined entity will offer broad distribution channels through banks, direct institutional, and third-party broker/dealers, according to the announcement.

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