Bristol-Myers Squibb Co., New York, faces a federal class-action complaint filed by past and present participants of the firms $2.5 billion defined contribution plan. The participants claim that from Jan. 1, 1999, to March 10, 2003, they lost an average 33% in the value of company stock held in their 401(k) accounts because the company inflated its revenues and earnings through various improper manipulations, including channel stuffing, said Jan Helder, a partner with Gourevitch, Stueve Helder, representing the plaintiffs. "Channel stuffing is inducing wholesalers and pharmacies to buy more products than they needed in order to increase current sales at the expense of future sales, explained Mr. Helder.
The suit, filed in U.S. District Court in New York, charges that Bristol-Myers Squibb knew that the reported sales were unsustainable and misleading and were done solely to inflate revenues. The suit further charges that the company misrepresented or concealed material information relating to investment in the company stock.
John Elicker, spokesman at Bristol-Myers Squibb, did not return phone calls seeking comment by press time.