Canadian securities regulators filed administrative charges against Biovail (BVF) Chairman Eugene Melnyk, saying he failed to disclose trades and accurately report the size of his stake in the biotech company for several years.

The Ontario Securities Commission said in a statement Monday that Melnyk controlled Biovail shares held in four trusts. He failed to disclose his ownership of these shares and didn't file reports on related transactions, the OSC said. The allegations cover the period 2002-04, when Melnyk was CEO of the drug company.

The commission said Melnyk will face a hearing on the case on Sept. 21. The commission seeks a civil penalty of up to 1 million Canadian dollars for each alleged offense.

"I have always conducted my personal and business affairs with the highest degree of honesty and integrity," Melnyk said in a statement in response to the hearing notice. "I did not own the shares in question in the period after these Trusts were established.

"I have never been a Trustee of these Trusts, was not a beneficiary of the Trusts during the period in question, and did not even learn of the existence of many of these trades until months after they occurred, if at all," Melnyk's statement continues. "I disagree strongly with the contention of Staff that I exercised control or direction of the shares in question in the period after the Trusts were established, and with their assertion that I was required to file reports concerning these trades."

Toronto-based Biovail stood by Melnyk.

"Biovail, its Board and its management team express their continued confidence in Mr. Melnyk's ability to lead the corporation as Chairman of Biovail's Board," the company said. "Biovail will not be commenting further on this matter at this time."

Shares of Biovail fell $1.15 to $21.55.

More from Stocks

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

REPLAY: Jim Cramer on How to Navigate the Stock Market Amid Tariff Worries

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

Jim Cramer: 4 Stocks Could Get Throttled By a 'Knock Down Drag Out' With China

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

3 Warren Buffett Stock Picks That Could Be Perfect for Your Retirement Portfolio

50 Stocks That Could Be Shredded If a U.S. Trade War With China Ignites

50 Stocks That Could Be Shredded If a U.S. Trade War With China Ignites

Why Starbucks Latest Data Reveal Should Worry Investors

Why Starbucks Latest Data Reveal Should Worry Investors