The United States Securities and Exchange Commission (SEC) has charged Canada's Biovail Corp. and four current or former officers, including prominent horse owner and former Chief Executive Officer Eugene Melnyk, with engaging in fraudulent accounting schemes.

Biovail, a pharmaceutical company, will pay $10-million to settle the SEC probe, according to a statement released Monday by the SEC.

Still facing charges are Melnyk, former Chief Financial Officer Brian Crombie, current controller John Miszuk, and current Chief Financial Officer Kenneth Howling. The SEC contends the Biovail executives repeatedly overstated earnings and hid losses to deceive investors.
 
The complaint alleges that in October 2003, Biovail and some of its executives schemed to deceive investors and analysts by falsely attributing nearly half of the company’s failure to meet third-quarter forecasts to a truck accident involving a shipment.

According to the complaint, Melnyk, 48, also violated shareholder disclosure provisions by failing to reveal shares held by several off-shore trusts that he controlled.

Melnyk’s most prominent horses include champion sprinter Speightstown, Canadian Horse of the Year Sealy Hill, Canadian champion three-year-old male Archers Bay, and grade 1 winners Bishop Court Hill, Flower Alley, Harmony Lodge, Host (Chi), Pool Land, and Tweedside.