tanner was a senior executive at valeant. he owed all of his duties to valeant and its shareholders n. violation tanner secretly agreed with davenport to puff up philidor's business. why? so that eventually valeant would pay $100 million for the right to buy philidor. tanner, we allege, did not do this out of loyalty to valeant. he did it because he was expecting to get a secret $10 million kickback. he repeatedly lied claiming he had no personal financial interest in philidor when he, in fact, had a huge interest. before i go into detail about the charges, let me thank some folks, many of whom are standing with me up here today. cases like this as you might imagine involving secret kickbacks take time, they require persistence, tenacity and hard work and that's what we had here. i am joined by the fbi the director in charge of the new york bill office. i want to thank bill and his team, specifically ryan rudell, michael priest and tom mcdonald for their incredibly hard work on a complicated case. i also want to thank the car

and that gary tanner at valeant worked with andrew davenport to support philidor within valeant.w davenport gets $40 million from that purchase as the owner or creator of philidor. it was his job to grow and promote philidor, and regularly communicating to his superiors what he's doing. today he's been charged with a crime for doing his job. we will demonstrate his innocence at trial. so you can see valeant's shares are rebounding from their loss earlier today on this. however, a lot of folks listening to the news conference today warned, this might not be over. take a listen. >> i'm not going to comment on what particular things are still under investigation. i thought i've made more clear here than even i usually do that the investigation is ongoing and we're still continuing to look at a lot of different things in connection with valeant and the relationship with philidor, but i'm not prepared to talk about that today. >> reporter: so making even more clear than usual that that investigation is still going on. analysts coming out and saying valeant still has a lot of investiga

to steer valeant's business and potentially acquire philidor. the manhattan district attorney said the two were partners in crime. >> tanner worked with dav enport to build up philidor, sometimes at the expense of valeant. for example, although tanner was directed to diversify valeant's relationships with multiple specialty pharmacies, he instead pushed hundreds of millions of dollars of valeant business exclusively to philidor. and as we intend to approve, he did it for the eventually $10 million kickback. >> tanner's attorney said he was charged with a crime for doing his job. shares of valeant finished the day with slight gains. >>> online ordering powering the results at best buy, that's where we begin tonight's market focus. the online retailer said online sales jumped 24%, contributing to profit and revenue. se same-store sales also came in above estimates. the company expects to take a $200 million hit due to galaxy note 7 recalls. >>> revenue at smucker's fell. slower sales of pet foods and peanut butter and folger's coffee hurt their re

gary: but on valeant, they have been to sell off assets. a legendary value investor, has been recommending the stock, thinks it could with be a triple or greater. you thesis is still intact on the short side? >> yeah, our thesis is completely intact on the short side because this is a company that bought drug, they did not develop them. and they were buying drugs with a short shelf life of only a handful of years before patents expired or competition came in. and they were able to jack prices up 500, 1000% by gaming the reimbursement system. and that's what this whole controversy was about. and that gain is over. i mean, it is truly over. the ability to take a toe fungus drug and hike prices 1000%, you know, and get paid -- maria: incredible. >> -- is completely over. and while they have some assets like bausch and loam that are reasonably good -- i think they still overpaid for that as well -- a lot of the drugs they bought aren't going to be worth nearly what they paid for them, and that's the problem. maria: reallyincredible. congratulat

valeant as a company.ou saw valeant stock rebounding from an initial loss as people realized this investigation was focusing not on valeant as a company but on former employees. then representative elijah cummings came out today saying it was great these charges were made by that valeant hadn't cooperated with his congressional investigation. valeant just now getting back to us with a statement on that, saying, mr. tanner, the former valeant executive, ceased to be an employee on september 13, 2015. valeant has cooperated with the full committee's review from the beginning and is working with the committee to accommodate its requests. you can see there is a continuing push and pull here as a lot of folks hope these charges being weighed against former employees meant that maybe the legal consequences for valeant wouldn't be so bad. analysts have been coming out today saying the company is still dealing with dozens of investigations. perhaps this elijah cummings statement showing that the pressure is going

valeant shares down 80% for the year and fell hard on that news. ackman's fund, which has a publicly traded vehicle and will discuss its quarterly performance vehicles on a call, hasn't commented on the bad news for valeant. as the number one shareholder for the company in stocks and economic exposure by the options market of $30 million, it's clearly an issue. one silver lining to the stock's protracked drop. the overall value of the position shrinks to less than $500 million in stock. making it less important perhaps to ackman's overall portfolio. >> interesting story. kate, thanks so much. >> let's stick with valeant. david marris is the senior analyst. welcome back. >> these reports of a criminal probe into mike pearson and the former cfo, chiller. are we talking about more risk or just the who elthing in total? >> i would be really careful on how it's portrayed. we don't know if charges will be limited to the two individuals or to the company. some people have characterized it as it's not the company, it's just the individuals. i wouldn't be t

valeant says the company has not been charged.o, who there have been news reports maybe under investigation, have not been charged, nor have any current employees. they say the issue today included allegations that the charged parties to defraud as a company. they intend to cooperate with all authorities in this matter. the stock rebounded today after being down because this doesn't look levelled at valiant, however, as david points out today, the company is still dealing with a dozen other investigations that may start to come to light more next year. >> don't move. let's bring in kate kelly. a lot of big names went long this stock. >> absolutely. this has become one of those stock that's become a hedge fund hotel. goldman sachs keeps a list of the long names and valeant has been toward the top of the list in recent quarters. pershing square, bill ackman's hedge fund. paulson and company and then value act, a san francisco based primarily long only hedge fund. they don't necessarily think of themselves as a hedge fund, but for pu

after the bell, valeant confirmed that "talks that maybe to a sale of a unit were underway." unit is a crown jewel in the company's core drug business, making treatments for ulcers, heart burn, and according to the wall street journal, the unit could be unloaded for as much as $10 billion to a japanese drugmaker. valeant confirms they are "currently in discussion with third parties over various diverse futures, including but , they didd to salix not say who they were in talks with." to those close to the matter of the year-long probe, it could result in charges in the coming weeks. bloomberg recent reported in may that the japanese drugmaker had previously approached valeant, but were rejected. the stock price is down 90% from last year's peak. that has put enormous financial pressure on the company, legal woes added on top of that, and many believe that they're able to sell off a business or two that it could provide a lot of financial liquidity. take a look at the chart that shows the recent pattern of price moves for valeant, and on the far right in the tuesday session, an

from valeant he was working with philidor and andy davison to steer this business from valeant and creates relation were valeant would pay $100 million and getting a kickback after the deal was done to the tune of $10 million paid by andy davenport. shell companies and things like that. a lot of characters you brought up in language use and they saw themselves like cassidy and the sundance kid. not $40 million bond wouldt's because nobody -- then investors. drew: the money is going to these two people. at the same time, this scandal is a part of what brought down valiant. investorso imagine, did not see, i am not sure. investors are upset about how it happened. actors.o bad if you read the details, you have unnamed a valeant executives saying we are suspicious of what is going on here. we have been to visit the philidor offices and we notice that you ostensibly, a valeant employee has an office at philidor. suspicions raised by the company and asking him what is your relationship, do you have any equity interest. according to the criminal complaint, he lied about those things to valeant.

when takata came back to valeant about cutting the price.he initial deal called for takata to make a cash payment up front along with agreeing to a sizable royalty valeant would have gotten to the sale. takata wanted to cut the royalty payment in half, according to people familiar with that situation. i'm also told that valeant didn't want to sell in the first place because it's a core asset, but that the deal would have allowed the company to immediately pay 80% of its bank debt and get that lucrative royalty i mentioned. one of the voices said to be against such a deal was john paulson, whose firm is valeat's second largest shareholder. mr. paulson was said to argue that a deal would not only be dilutive to shareholders and that it could hurt valeant's future growth prospects. one reason they may have come back as well is that the fact that the yen has weakened substantially around 9% since the election. i'm also told that the deal now is all but dead. the market doesn't like the news. if you are an investor in valeant, i don't know if any

that is that valeant has continued to surge.last talked five minutes ago, it was up 14% and now it is up 33% that valeant may find a better $10 billion to cash in on the sale of its gastrointestinal drugs unit. was it just yesterday? bloomberg wrote a story that federal prosecutors are looking at fraud charges against j michael pearson, the valeant former ceo and you saw the stock plot. none of it really changes the long-term picture come the fact that valeant is still down about 80% year to date. >> this only getting us back to october 6 levels. it really shows how much they are still getting killed. it is only a one-month high. matt: we will continue to file -- follow this story for you. they fell and continued to drop throughout the trading day. bond yields are plummeting as well as investors little security there. this is bloomberg. ♪ scarlet: with the polls between donald trump and hillary clinton tightening, and five volatility is down at the highest point today in five years. that is your white line. the blue line is the

. >> but, i don't know if valeant can. i want to see if there is any toots to these new rumors that keep on popping up. i am not a fan of valeant and i say don't get sucked in. i am not a fans of reporters who write stories they don't pan out. >> can we see which prices will be rolled back by valeant and what drugs are about to be approved by the fda and a plan, a road map, to pay the $30 billion in debt. joe, you got to tell us what the heck is going on. >> results coming from shake shack wendy's. >> if we get anything good, the stock is stabilized and some below 30s. wendy's has seen its stock slowly and surely declined. i like them and i like the burgers. they change their burgers a lot. thursday's retails and most of retailers cannot wait to put the quarter behind them. kohl's and macy's, ralph lauren, these, i am only expecting prices from ralph. that does not mean that kohl's and macy's cannot have a relief rally. >> you know i think if they chain up, it is going to be a fashion forward. >> nordstrom, nordstrom, it i

we'll keep an eye on shares of valeant, not just hertz, and cvs.ome other important earnings to keep an eye on too. the pursuit of healthier. it begins from the second we're born. because, healthier doesn't happen all by itself. it needs to be earned every day. using wellness to keep away illness. and believing a single life can be made better by millions of others. as a health services and innovation company optum powers modern healthcare by connecting every part of it. so while the world keeps searching for healthier we're here to make healthier happen. hthis bad boy is a mobile trading desk so that i can take my trading platform wherever i go. you know that thinkorswim seamlessly syncs across all your devices, right? oh, so my custom studies will go with me? anywhere you want to go! the market's hot! sync your platform on any device with thinkorswim. only at td ameritrade . >>> you're watching cnbc "squawk on the street" live from the financial capital of the world. the opening bell in just about 30 seconds. it is election day finally here after

- separate from valeant, but this certainly is not behind them.ion whether the company is cooperating? sometimes they will cooperate not to have the company liable. neil: certainly they are and have said that on the record and we expect that to be the case. as prosecutors find something has happened that they feel is criminal, they could still bring charges. obviously we do not know until things are decided by prosecutors what will happen, but it could be very expensive for the company. it could be a deferred or nonprosecution or something involving actual clinic -- criminal plea or charges. alix: the company versus the individuals, pearson is still working in valeant offices. what kind of relationship to the have? elizabeth: he is currently a consultant but is still receiving payment. it is a fine line and it will be interesting to see how valeant does differentiate that. david: thank you very much. yet dropping its bid for trial. why it is walking away. this is bloomberg. ♪ emma: this is bloomberg daybreak. -- rrow we are joined by we are just 1

and we have reported the prosecutors have looked at some senior valeant executives, howard schillerike pearson , the former ceo and cfo, but we obviously did not see charges for them today. there were no charges against the company. those two things are probably good news for valeant, though not out of the woods yet. >> volkswagen says it has reached an agreement to cut 30,000 jobs worldwide through natural attrition. 23,000 of those will be in germany. the move is part of a plan to save 3.7 billion euro. 30,000 jobs -- will most of it be volunteers? chris: yeah, it will all be volunteers, essentially. this package is a typical volkswagen package. it is pretty big number -- 30,000 -- it sounds like, but it is over the course of several years, and they agree to that for no forced layoffs. they expect people to retire early, or retire in a natural course of their job career. or when people leave, as people do they just will not be , replaced. it is going to be a very soft program and easy thing to swallow for the employees. francine: $3.9 billion in savings. will they be able to achie

they are responding, saying it is not the support on valeant.t at anyying time they are in talks with many parties, they are not focusing on valeant, but they are saying that will make a full disclosure with any agreement is reached. those comments coming from takeda, just crossing right now. angie, thanks. we've still got our guest in dubai, managing director of the national bank of abu dhabi. there are two big issues that we've got to talk about. one is the federal reserve this evening. there has never been so much dissent. 7.7% of the time if the fed has dissented. yellen faces more dissent and greenspan or bernanke. growth going into 2017? guest: everybody is expecting the announcement or statement that may come up today, to prepare markets for that. i think there are also some indications of the 2017. , i thinkcrease is slow it will grow. i don't think you will hear that at me statement now, especially with the things coming with the elections. general, i think that in general is not positive for the dollar. it is not positive for the kind

just this week, we heard back from valeant pharmaceuticals. they tell us just this year the company ha spending 40% -- and decreased marketing spending as well. it seeks to now limit drug price increases by single digits year to year. a 9-year-old boy is being called a hero for what you're about to see in this video. keep an eye on the 11-month-old baby on the changing table in the top right corner. now watch closely: as the baby starts to roll off -- big brother swoops in and catches him before he hits the ground. the family shared everyone that taking your eyes off little ones-- even for a few seconds -- could be very dangerous. coming up tonight on 10 news and c-b-s. starting at 8:00, the big bang theory, followed by the great indoors at 8:30. at 9:00, mom. at 9:30, life in pieces. at 10:00, pure genius. then tune in to 10 news at 11. news at 11. kids don't know how to act fake. news at 11. so we're learning to be more like them. removing artificial flavors and colors from general mills cereal. ke his face. you said you wanted to feel bette

he says judge pershing square not by valeant.herry red stone in rare public comments sat down with andrew earlier, she talked about the possible recombination of viacom and cbs which split up in 2006 as something which might be a good idea. >> i think it makes sense to explore whether or not these companies can come up with a way to get together. if they can't, they're two strong companies and they will both survive and they'll both be great. >> it wasn't clear when that might start, melissa. very interesting rare public comments by shari redstone on the matter. >> kelly, thanks very much. >>> karen, how do you interpret him saying valeant was an extraordinary mistake, especially after a quarter when was horrible on many fronts, lowered guidance. it lost i think 17% or something like that on the day. >> yeah, i mean, and it's hardly back much at all even after the trump victory. i think he's just trying to -- it was a mistake, clearly, whenever you have something that big go down that much, that's a mistake. but i think he's also

acman to a pretty down good day. >> about valeant. about herbal life. >> the 52-week low is $17. the high is $123. so it's still pretty sad times there. >> again, watching shares of herbal life. he supports the new ceo choice. we'll see how the market reacts. etsy earnings are now out. let's bring in courtney reagan. >> etsy posting a third quarter loss of 2 cents per share in line with analyst expectations. we'll call it relatively in line. etsy also is upping its guidance and reiterating three year guidance. its cfo is leaving at the end of march 2017. etsy will use the transition time to look for her replacement and/or successor there. and we have mobile visits continuing to account for more and more of etsy's what is going on when it comes to active buyers or sellers both of which are up. active sellers up more than 11%. buyers up more than 20%. the gross merchandise sales up more than 19%. the revenue is up more than 33%. >> thank you, courtney. etsy shares up a little more than 1% on the news. more news on tesla and solar city.

. >> it's reported that the ex-ceo and chief financial officer of the pharmaceutical company valeant are the focus of an authorities are looking into an alleged accounting fraud. bloomburg news said the company has been under investigation for about a year. valeant has been the focus of a lot of scrutiny over the years following dramatic price hikes. >>> there will be a lot of changes for president obama once he leaves office including the new social media handle. mr. obama will no longer use the handle @potus. the white house announced all administration's social media to the next president. the new accounts will start fresh. the obama accounts will be store ted national archives. >>> and it's starting to look like the holidays at starbucks. an anonymous barista leaked the photo of this year's holiday cups. they won't actually be used until later this month. it's more about holiday theme than last year's when a solid red cup sparked backlash because it didn't feature any holiday images or symbols. anne-marie. >> yeah, people were really outraged by last year's cup. the pressure to m

. >> when we come back, more movers to get to, including valeant.peaking of china, we'll talk more about these pmis, strongest in two years. more "squawk on the street" in a minute. ♪ it's been over 100 years since the first stock index was created, as a benchmark for average. ♪ yet a lot of people still build portfolios with strategies that just track the benchmarks. ♪ but investing isn't about achieving average. it's about achieving goals. ♪ and invesco believes doing that today requires the art and expertise of high-conviction investing. ♪ translation? why invest in average? i'm stressed trying to figure out this complex trade what's with the dog-sized horse? so i brought in my comfort pony. well, you could get support from thinkorswim's in-app chat. so you don't need a comfort pony. so what about my motivational meerkat? in-app chat on thinkorswim. only at td ameritrade. our mission at clover is to highest quality dairy products. clover has relationships with 27 different family farms. the environment is who clover is. without it, we're nothing.

valeant has been under scrutiny following dramatic price hikes. >>> there will be a lot of changes for president obama once he leaves office including the new social media handle. mr. obama will no longer use the handle @potus. the social media accounts including @potus will belong to the next president. the new accounts will start fresh. the obama accounts will be store ted national archives. >>> and it's starting to look like the holidays at starbucks. an anonymous leaked holiday cups they won't actually be used until later this month. it's more about holiday theme than last year's when a solid symbols. >> people were really outraged by last year's cup, to the pressure to make sure you deliver this year. that looks like a decent looking cup, i think. >> you know, much ado about a red cup. i usually focus more on what's in it, right? >> exactly, just high caffeine. that's what we need at these hours. jill wagner at the new york stock exchange, thank you so much, jill. >>> still ahead, tackle, food that allows customers pay what they can. keep them up, keep them closed, keep them safe.

old. >> valeant $17. that's old.body associated with the company any longer. >> i'm looking and watching what is moving and what is not moving. i want to just bring up, david, people who are playing these dry bulk ship companies, please understand this is just massive short squeeze. >> you're talking now about the dry ships. >> i'm switching here. the baltic drive freight is up to 11. 1100, so there is a substantive reason why people might like them, but david, the group is in the grips of one of the most amazing short i've seen, it's a musical chairs game. they go up until they collapse. i want to point that out. they are not up on an earnings basis. a lot of people feel infrastructure will be shipping things. that group is up even more than private prisons group which i profiled last night on "mad money." just a cautionary term, not saying it's going to roll over today. i'm saying when you see this kind of froth activity and you're playing in it, you're playing with fire, okay, smoky? >> you got it, baby. >> all ri

. >> valeant is under criminal investigation for accounting fraud by the department of justice.s is according to people familiar with the matter. valeant shares tumbling to as low as $18.77 right now, off by 5% in three-day. >> what is the accounting structure here that is so controversial? >> some pharmaceutical companies use specialty pharmacies to market their drugs. investigators in congress and elsewhere have said it's a way of getting around what would ordinarily be price controls by hmos or benefits managers. by basically steering patients directly onto the branded drug instead of the generic. >> can you help us quantify what these kind of investigations mean for valeant? >> the biggest issue was a potential fines. the company has over $30 billion in debt, most of it is due in 2020. they are running a fine line in terms of their expected cash flow and what they can paydown in debt. any large sum they need to pay is going to severely cut into their covenants, and that could be a risk in the near future. >> dropping its bid for ganache, shares her plunging now down 18% on t

. >> valeant says it's in talks to sell its assets.eports have surfaced that japan's takata pharmaceuticals is interested. that could raise $10 million. there was a little bit of concern that salix is a core asset for valeant. they did pay more than 15 for the asset not too long ago. valeant continues needs to put out a road map for growth. >> and cash in. still to come the fear index we'll talk more about volatility and which investments historically do best in times of wild swings. stay tuned. you're watching "worldwide exchange" on cnbc. exchange". if you're just waking up let's get you up to speed. yesterday we saw declines linked to politics, polls getting closer to a threat of a donald trump spooking investors. we only lost about 1.6, 1.7%. volatility did spike and we saw significant repetitive days of declines but the declines haven't been too severe. six days in a row for the s&p and dads, four days in a row for the dow. not too significant in term of the size. about a quarter of a percent for each of the indices. oil prices ha

scarlet: valeant pharmaceuticals among them.tle who is watching other winners and losers. >> speaking of valeant pharmaceuticals, this is one that we are looking at, the worst performer in the s&p 500 global 1200 health care index, this after the company missed third-quarter estimates and cut the full your forecast. there is new management in place and some wonder if this is the company setting the bar low, but analysts say this is the third time it has happened, so it's unlikely this is the case. probably more of a continuation of the issues that have plagued this company over the last year, down 85%. not comforting is the fact that the ceo said or surprises could be on the way. on the day, winner free port mapper ran are nicely higher. on a record 12-day rally, having its best year since 2010. ,ut if we go into the bloomberg this is a longer-term chart of copper in orange, freeport in blue. as copper is trading higher this year, it is still below the long-term downtrend. unless that can be broken, it may suggest a real recover

we have a powerful head-snapping move right now for valeant, the canadian pharmaceutical.g 27.5%. exactly at this time yesterday it was plummeting 12% on the news that valeant's former ceo and cfo were at center of a criminal probe for fraudulent accounting practices and could possibly face charges within the next couple weeks. well the stock of course tumbled yesterday. now the news that is pushing it higher that the farm that giant is in advanced talks to sell assets, at least one of its assets the salix unit. this would be possibly sold to takeda, for $10 billion. the stock is surging on news, the embattled company with a criminal probe around it, figuring out it must sell assets. the top shareholder, billionaire bill ackman said they would not be doing, yet charlie gasparino of fox business had said, yes they will, because they have to. indeed that is coming to pass. at least reports at the moment are saying that valeant is in talks to sell the stomach drug business for $10 billion. this according to the "dow jones newswires." of course back to dade city, florida, we'r

sources telling us that valeant was in talks to offload its salix drug business. may step in to interpret a key law when it comes to hong kong's legislative council. the details are just ahead. this is bloomberg. ♪ haidi: a hong kong court is due to hear a case in the dispute between the territories government and two independence politicians. rishaad: they asked the court to remove two local lawmakers who protested against chinese influence when they took their of that the legislative council. we are at the high court here in hong kong. this has been a controversial move. rosalind: that's right. court -- they moved to oust them. there have been reports that used could use a rarely power to interpret hong kong's basic law, and that has caused rumblings in hong kong about the possibility of increased influence in hong kong affairs. the move would preempt the courts and decide the case for hong kong. there has been quite a lot of concern about hong kong's high degree of autonomy. rishaad: what else did the hairdo that triggered this move to oust them? do thathe pair

valeant is in advanced talks to sell its salix business after shares of valeant fell news of a -- up 33%. melissa: wow, that is a big turn around. lori, thank you. major pipeline explosion in alabama sending gasoline prices soaring. this is the second time the pipeline has been shut down in two months. wonder if we see a major supply disruption on the east coast. scott shellady, what do you think? >> i don't really think so. we were worried about the yesterday's bloodbath in the crude oil market and dollar as cheap as you said it was, we couldn't get a rally out of crude. thinking crude is heavy and goldman sachs said, maybe 40 is in the cards. i think that is not good for oil or good for the market as well. melissa: tell me more about that. why do you think it is not also good for the market? >> if you remember in 2008 and 2009, the energy sector helped us get out of our problems. as we see some of those guys roll over, that is not good for the economy number one. number two, don't you think opec and fed are kind of same and negative reaction? i've been watching a lot of that lately

the sale of that valeant eye business, the discussions are still preliminary and that valeant got thort of a 2000 purchase of bausch & lomb. >> this potentially, if they sold both these units at these reported prices, this could be about $13 billion for valeant. >> correct. and that's why people say the stock -- it did get the bounce prior to today, but we're looking to see if this has an overall move on the stock price since they've unloaded about $13 billion of assets, possibly. this is a smaller deal in the grand scheme of things. if that salex business does go, which they mayor m or may not b selli selling, what that will do. >> as it faces potentially -- >> a criminal investigation. not a civil investigation, not we're sniffing around, literally a potential jail time for its ceo and another -- >> their formers, right. >> absolutely. we'll continue to watch this again. valeant shares down 8.5%. "check, please" is next. what are you doing? getting your quarter back. fountains don't earn interest, david. you know i work at ally. i was being romantic. you know what i find romantic? a