Florida State Board of Administration, Tallahassee, sued Bristol-Myers Squibb Co., New York, eight current or former officers, non-employee director Louis V. Gerstner Jr. and auditor PricewaterhouseCoopers, claiming the fund lost more than $240 million as a result of accounting fraud.
"This case involves one of the largest and most clear-cut instances of wholly fraudulent ‘earnings management' by a corporation ever uncovered by the United States," according to the lawsuit, filed in New York State Supreme Court by the board, which oversees $100.4 billion in pension assets. The company's accounting practices resulted in $1.844 billion in overstated pretax income between 1999 and 2001, and PwC certified misleading financial statements and was a direct participant in the fraud, the suit states.
The suit calls Mr. Gerstner the "most influential member" of Bristol-Myers Squibb's board of directors.
The board bought 9.43 million shares of the company between 1999 and 2003 for a total of $454 million, the suit notes.
Brian Henry, Bristol-Myers Squibb spokesman, didn't respond to a request for comment.