CFTC fines Russia’s VTB $5 mln for fictitious forex trades at “non true prices"

The U.S. Commodity Futures Trading Commission today issued an Order filing and simultaneously settling charges against banking institutions JSC VTB Bank, headquartered in St. Petersburg, Russia, and VTB Capital PLC for executing fictitious and noncompetitive block trades in Russian Ruble/U.S. Dollar  futures contracts, which were cleared through the Chicago Mercantile Exchange.  VTB Capital, a U.K.-incorporated bank, is 94% owned by a holding company that, in turn, is 100% owned by VTB.

The CFTC’s Order requires VTB and VTB Capital to jointly and severally pay a $5 million civil monetary penalty as a result of their unlawful conduct. read more »

SEC Issues $4 Million Whistleblower Award

The Securities and Exchange Commission today announced an award of more than $4 million to a whistleblower whose original information alerted the agency to a fraud.

The SEC’s whistleblower program has awarded more than $111 million to 34 whistleblowers since its inception in 2011.

“Our program continues to incentivize whistleblowers to come forward with solid information that helps us bring violators to justice before more wrongdoing can occur,” said Jane Norberg, Acting Chief of the SEC’s Office of the Whistleblower. read more »

SEC Warns Auditors To Keep Things Strictly Professional

In reaching more than $9 million in settlements with Ernst & Young on Monday, the U.S. Securities and Exchange Commission is sending a stern reminder that cozy relationships between audit partners and clients are off the table, while also demonstrating that its focus on accounting isn’t limited to the content of financial reports, experts said.

Ernst & Young LLP agreed to pay a total of $9.3 million in two separate enforcement actions, without admitting or denying allegations that it failed to recognize red flags and step in when one partner became good friends with the chief financial officer of a client, and another partner became romantically entangled with the chief accounting officer of a different client. read more »

US Slams Bid To Toss, Transfer FCA Suit Over Army Rations

A Kuwaiti food supplier can't claim it wasn't properly served with a suit claiming it gouged the U.S. military on rations for troops in Iraq when it has already acknowledged the False Claims Act allegations, the U.S. government told a Georgia federal court Friday.

Public Warehousing Co. KSC has argued the government has not followed the law in serving the supplier with the suit and that it should therefore be tossed. The U.S. Department of Justice replied on Friday that the court had allowed it to serve the company through its U.S. attorneys and a newspaper announcement after the Kuwaiti government stonewalled more formal efforts read more »

Alaska Native Co. Says FCA Claims Must Be Tossed

An Alaska Native corporation and a subsidiary pressed a federal court Friday to let the company try to end a False Claims Act suit, saying the relator who brought the suit had failed to show several subsidiaries weren’t eligible for a Small Business Administration contract program.

Ben Ferris asked the court on Sept. 6 to reject a bid by Afognak Native Corp. and its subsidiary, Alutiiq LLC, to dismiss his suit alleging that the companies falsely claimed 14 Alutiiq subsidiaries were eligible for an SBA program for disadvantaged social groups in order to qualify for millions of dollars in federal government contracts. Ferris claimed the companies were arguing that their representations about the eligibility of the Alutiiq subsidiaries weren’t false, not that they weren’t material to the government’s decision. read more »

Confusion Over Dodd-Frank Is Leaving Whistleblowers Exposed

Should Dodd-Frank’s anti-retaliation provisions be read broadly or narrowly? It’s a question that’s divided district courts and led to a split between the Fifth and the Second circuits. read more »

Lenders Have Adjusted to New Mortgage Rules: CFPB

The Consumer Financial Protection Bureau appears pleased with the progress banks and nonbank mortgage lenders have made to comply with new rules governing the mortgage sector.

A lot of the CFPB rules required by the Dodd-Frank Act have been implemented. "They are working well. Homeownership is expanding,"

Regions Financial Corp. in Birmingham, Ala., recently agreed to pay $52.4 million to settle allegations that it violated the False Claims Act by originating and underwriting mortgages that did not meet Federal Housing Administration requirements. read more »

$90B Whistleblower Complaint Against Chemical Companies

Could recover as much as $27 billion if it succeeds in a whistleblower complaint.

The Am Law Daily also points out that the suit is not a typical case under the False Claims Act. Typically such cases allege overbilling by a government contractor. The Kasowitz case, on the other hand, claims the four companies failed to pay a civil penalty that was never assessed for failure to report the health risks. The companies will likely argue they can’t owe a fine that was never imposed. read more »

A case making a similar “reverse claim” for DuPont’s alleged failure to report cancer-causing leaks is pending before the New Orleans-based 5th U.S. Circuit Court of Appeals. read more » 

Florida whistleblower seeks SCOTUS review in MWI Nigeria case

A Florida whistleblower is asking the U.S. Supreme Court to review a case that alleges a Deerfield Beach company used public money to pay millions of dollars to a Nigerian strongman in the 1990s – among the longest-running whistleblower cases in U.S. history. 

The petition to the Supreme Court was filed Monday, 18 years after whistleblower Robert Purcell first lodged the allegations against Moving Water Industries. read more »

Lance Armstrong whistleblower questions Bradley Wiggins and Team Sky

The Sunday Times journalist who helped to expose shamed cyclist Lance Armstrong's doping activities has criticized the behavior of the all-conquering Team Sky set-up.

Back in 2013, Sunday Times chief sports writer David Walsh accepted an invitation from Team Sky general manager Sir David Brailsford to spend 13 weeks observing his team's activities from the inside.

In his latest column for the newspaper, Walsh has questioned many of the things he uncovered during that time, particularly with regard to former Tour de France winner and multiple Olympic champion, Sir Bradley Wiggins. read more »

Whistleblower awards and new scrutiny of SEC enforcement

By any measure, the whistleblower bounty provisions of the Dodd-Frank Act have been an unmitigated success in bringing essential information to the Securities and Exchange Commission, leading to substantive enforcement actions. According to an SEC press release, the whistleblower program has led to over $500 million in financial remediation paid by companies and bounties paid to 33 whistleblowers have now exceeded the $107 million mark. According to SEC Chairperson Mary Jo White, “The SEC’s whistleblower program has proven to be a game changer for the agency.”

Kindred pays feds largest penalty ever recorded for integrity agreement violations

Kindred Healthcare will pay a $3 million penalty and close several sites after failing to implement corrections to its billing system under a corporate integrity agreement with the federal government. It's the largest such penalty issued to date.

HHS' Office of Inspector General said Tuesday that the massive post-acute care provider failed to correct improper billing practices during the fourth year of its five-year corporate integrity agreement, stemming from a prior $25 million False Claims Act settlement with Gentiva Healthcare. Kindred acquired Gentiva in February 2015 in a $1.8 billion deal. read more »