Bausch Health, a Canada-based drug maker formerly named Valeant Pharmaceuticals, will pay a $45 million civil penalty to resolve a legacy investigation by the Securities and Exchange Commission for improper revenue recognition and misleading disclosures in SEC filings and earnings presentations. Three former executives also have been charged.

“The settlement will fully resolve the investigation, which commenced in the fourth quarter of 2015, and all SEC charges against the company,” Bausch Health said in acknowledging the settlement. It neither admitted nor denied the SEC’s findings.

In April 2016, former Valeant CEO Michael Pearson appeared before the U.S. Senate for, as Pearson put it, “being too aggressive … in pursuing price increases on certain drugs.” The drug company fell under intense scrutiny for questionable accounting practices and misstated financial reports that became the focus of the SEC investigation.

According to the SEC’s orders, released Friday, Valeant—along with Pearson, former CFO Howard Schiller, and former controller Tanya Carro—misstated revenue transactions for five consecutive quarters while also failing to disclose the “material impact of certain revenue it received from drug wholesalers following a 500% increase” of the price of a single diabetes drug Valeant acquired in April 2015.

The SEC said much of the “double-digit same store organic growth” touted by Valeant came from sales to a mail-order pharmacy called Philidor Rx Services that Valeant helped establish, fund, and subsidize. The SEC orders found Valeant “improperly recognized revenue relating to Philidor sales and did not disclose its unique relationship with, or risks related to, Philidor in SEC filings and earnings and investor presentations.” Valeant ended its ties to Philidor in October 2015 and restated its 2014 financial statements in April 2016, reducing the revenue that was improperly recognized.

The SEC order also found Valeant misattributed the impact of a price increase for its diabetes drug Glumetza, erroneously allocating the entire $110 million as net revenue to over 100 other products. This resulted in “numerous misleading disclosures” in Valeant’s earnings presentation and periodic reports filed for the second and third quarters of 2015, and the year ended 2015.

Following significant media and analyst attention, Valeant in April 2016 restated its financial statements to reduce previously reported fiscal year 2014 revenue from sales to Philidor by approximately $58 million, due to recognizing the revenue prematurely, the SEC said.

Settlement details

According to the SEC, Valeant violated anti-fraud provisions of Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 and, except for Schiller, Rule 100(b) of Regulation G. Valeant also consented to an order for reporting, books and records, and internal accounting controls violations.

“We are pleased to have resolved this investigation with the SEC and to put this legacy matter behind us,” said Bausch Health CEO Joseph Papa. “Resolving this investigation is an important step in the ongoing transformation of Bausch Health.”

In the settlement, the SEC acknowledged the company’s cooperation in conducting its own investigation and voluntarily providing information to the SEC staff. Since the events at issue, the company has put in place a new board. Additionally, the SEC settlement credited the company’s extensive remedial efforts, including replacing its executive management team.

Individual respondents consented to orders finding they caused some or all of these violations. Pearson and Schiller agreed to pay civil penalties of $250,000 and $100,000, respectively, and to reimburse Valeant $450,000 and $110,000, respectively, representing a portion of their incentive compensation, pursuant to Section 304 of the Sarbanes-Oxley Act.

Carro agreed to pay a $75,000 penalty and to be suspended from appearing and practicing before the SEC as an accountant, which includes not participating in the financial reporting or audits of public companies. The SEC’s order permits Carro to apply for reinstatement after one year.