The US Securities and Exchange Commission (SEC) has subpoenaed at least two investment banks about their relationship with troubled pharmaceutical giant, Elan, according to a report in today's Wall Street Journal.
The news comes amid sweeping changes at Elan which yesterday saw the chairman and chief executive, Mr Donal Geaney, stepping down in favour of a five-member executive committee, headed by Elan's newly-appointed chairman, Dr Garo Armen.
The SEC launched its investigation of Elan's accounting practices last February and, according to today's Journal, Morgan Stanley has confirmed that it received a subpoena in connection with the drug company last month. Credit Suisse First Boston has also been sent a similar request, the paper says.
According to sources close to the investigation the SEC is seeking analyst reports, correspondence, notes and any other communications involving Elan.
It remains unclear what the exact focus of the investigation is but one potential area of scrutiny is the network of joint ventures used by Elan to finance Research and development.
There was mixed reaction in the market to the news of the departure of Elan's two most senior managers, with some saying it was too late to provide much of a boost to the firm.
Elan shares initially gained 55 cents in Dublin to €2.80 on the announcement, before later slipping back to close unchanged at €2.35.
The committee has already begun the search for a new chief executive, although analysts said it could face a tough task.
