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The head offices of Valeant Pharmaceuticals International Inc. are seen in Laval, Quebec May 20, 2014.CHRISTINNE MUSCHI/Reuters

A California court has slapped the wrists of Valeant Pharmaceuticals International Inc. and Pershing Square Capital Management LP over allegations of insider trading in their hostile attempt to take over Allergan Inc.

But the decision fell short of ruling that the hostile-takeover partners engaged in an "improper and illicit insider trading scheme," as Allergan had been seeking.

The United States District Court for the Central District of California found that Allergan "raised serious questions as to whether Valeant and Pershing Square violated [Securities and Exchange Commission] Rule 14e-3, which prohibits trading on the basis of material nonpublic information when an offering person has taken a substantial step or steps to commence a tender offer of a target company," Allergan said on Tuesday.

The court ordered Valeant and activist investor Bill Ackman's Pershing Square to make adjustments to their proxy solicitation statement of Sept. 24 by disclosing that the partnership they struck in February included an agreement between Pershing Square and Valeant to be called "co-bidders" if the Allergan-Valeant deal was in the form of a tender offer.

It also found that serious questions were raised as to whether Valeant, Pershing Square and its PS Fund 1 violated insider trading rules between February and April by buying Allergan shares without publicly disclosing information about Valeant's plans for a tender offer.

Judge David O. Carter also ruled that Valeant, Pershing Square and PS Fund 1 can vote their shares of Allergan at a Dec. 18 meeting at which Pershing Square is seeking to oust a majority of Allergan's board members.

Allergan had been seeking an injunction to disallow the shares from being voted at the meeting.

Pershing Square is Allergan's largest shareholder.

Valeant and Pershing Square said on Tuesday that they will promptly make the "additional disclosures" ordered by the court.

"Today's ruling is a victory for all Allergan shareholders as it puts the choice of Allergan's future in the hands of its owners," Valeant chairman and chief executive officer Michael Pearson said in a news release Tuesday.

"We look forward to the December 18 special meeting, where we hope to move a large step closer to the compelling combination of Valeant and Allergan that will create an unrivalled platform for growth and value creation."

Valeant's cash-and-stock offer is valued at about $182 per share but the Laval, Que.-based company has indicated the bid could reach $200.

Botox-maker Allergan has repeatedly rebuffed Valeant's offers, saying they are inadequate and significantly undervalue Allergan.

Allergan confirmed on Monday that it was approached about a potential friendly transaction by another party, identified in some reports as Actavis PLC.

Valeant and Pershing Square officials were not immediately available to comment on Tuesday.

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