Bristol-Myers Squibb (NYSE:BMY) has been no stranger to controversy and legal issues. The company developed its reputation as the bad sibling of the pharmaceutical sector in 2002 when an accounting scandal involving channel-stuffing to inflate sales came to light.

Ever since the channel-stuffing -- pushing products to wholesalers ahead of demand in order to meet quarterly and yearly revenue goals -- I've always wondered why the company didn't dismiss then-CEO Peter Dolan. Monday, based on a recommendation from a federal judge appointed to monitor the company after the channel-stuffing, Bristol-Myers' board finally replaced him (the company couldn't bring itself to say fired).

The impetus was that the federal judge noticed some "issues related to corporate governance in connection with the negotiation of a settlement agreement of the pending Plavix patent litigation with Apotex." Bristol-Myers then went on to say that no one found that Dolan broke any laws in the matter, which involved the blood thinner and Apotex, a manufacturer of generic drugs.

It sounds like Bristol-Myers is spinning a bit. If Dolan didn't do anything wrong in the Plavix patent negotiations with Apotex, then why would he be dismissed over the issue? Something sounds fishy to me.

A director of Bristol-Myers, James Cornelius, will take over as interim CEO. This announcement sent shares of Bristol-Myers up because Cornelius was interim CEO of Guidant when Boston Scientific (NYSE:BSX) bought it out last year. It's prudent to point out, though, that there have been rumors about Bristol-Myers being an acquisition target ever since the company engaged in talks about a potential merger with GlaxoSmithKline (NYSE:GSK) in 2002.

Investing in a company based on a possible buyout is never a good idea when the possibility is based solely on rumors and analyst speculation, at best. One stock I've owned, Rule Breakers pick PDLBioPharma (NASDAQ:PDLI), rose on buyout rumors; this should be treated like nothing more than potential icing on the cake for an investment. It's something that is usually good if it happens, but it's hoped an investment will still be a winner even if it doesn't occur.

The larger message from all that's going on at Bristol-Myers this week is that it's important to understand that large pharmaceutical companies like Bristol-Myers, Pfizer (NYSE:PFE), or AstraZeneca (NYSE:AZN) will always generate lots of press speculation and rumors because they're involved in so many dealings. As a new investor, it's critical to sort out what news materially affects your investment thesis in the company and what doesn't, so that you don't make the mistake of hyperactively wanting to buy or sell your shares on every piece of news.

GlaxoSmithKline is an Income Investor recommendation and Pfizer is an Inside Value pick.The Fool has a newsletter -- and a free trial -- for every type of investor.

Fool contributor Brian Lawler does not own shares of any company mentioned in this article and welcomes your feedback. The Motley Fool has a disclosure policy .