DOJ doubles down in brief to discredit ‘Wall Street-backed’ False Claims Act whistleblower

In response to pushback from a corporation that has filed more than a dozen False Claims Act suits alleging healthcare fraud on behalf of the U.S. government, the Justice Department last week filed a reply brief defending its motion to dismiss 11 qui tam suits by Health Choice Group, which DOJ describes as a “shell company” controlled by “investors and former Wall Street investment bankers.” read more »

Is Elon Musk trying to commit ‘suicide by SEC’ by taunting the agency?

The sad and tragic phenomenon of individuals goading police officers into shooting them is sufficiently common to have earned a nickname: “Suicide by cop.”

One wonders if something similar is driving Elon Musk’s deliberate taunting of the Securities and Exchange Commission, which has the authority to seek his removal from the management of Tesla.

In the latest development in this long-running saga, the SEC on Monday asked a federal judge in New York to declare Musk in contempt of court. The SEC hasn’t said what penalty it would like to see imposed on Musk, but its motion isn’t good news for Tesla, which as we write is off by about 1.5% in early Nasdaq trading, to about $294. read more »

The P.G. & E. Bankruptcy and the Coming Climate-Related Business Failures

P.G. & E. may be the most high-profile company to date to face collapse for reasons linked to climate change, but it won’t be the last

Dozens of other industries will follow suit. Bruce Usher, a professor at Columbia Business School who studies climate change and investing foresees three kinds of climate-related risks that may cause companies to fail in the future: physical risks, policy-related risks, and technological risks. The changing environment may cause damage to property or facilities owned by companies, or it could fuel lawsuits and liability payments related to damage caused by companies to others’ property, as was the case with P.G. & E  read more »

The Personal Toll of Whistle-Blowing

Why one physician took the risk of becoming an F.B.I. informant to expose alleged Medicare fraud.

To become a whistle-blower, Darren Sewell had filed what is known as a “qui tam” complaint—the term comes from a Latin phrase that translates as “he who brings an action for the king as well as for himself.” Qui-tam cases are brought under the False Claims Act, a law passed in 1863, under President Lincoln, in response to war profiteers peddling defective weapons and ailing mules to the Union Army. The law allows private citizens to file suit on behalf of the government against anyone believed to be defrauding the government. The vast majority of these cases involve health care. To some, qui-tam cases are controversial because whistle-blowers share in the money that the government recovers. This provision was included in the legislation to encourage individuals, especially those who might be involved in the theft themselves, to report the abuse. One of the bill’s sponsors, Senator Jacob Howard, of Michigan, said that he had based the qui-tam provision on the “old-fashioned idea of hold[ing] out a temptation, and ‘setting a rogue to catch a rogue’ . . . a reward for the informer who comes into court and betrays his co-conspirator.” read more »

Two Businessmen Charged with Foreign Bribery in Connection with Venezuela Bribery Scheme

A former sales representative and the president of a U.S.-based company were charged in an indictment unsealed today on foreign bribery, wire fraud and money laundering charges for their alleged roles in a scheme to corruptly secure business advantages, including contracts and payment on past due invoices, from Venezuela’s state-owned and state-controlled energy company, Petroleos de Venezuela S.A.

The indictment alleges that beginning in or around 2009 and continuing through at least 2013, Pinto, a sales representative for a Miami-based PDVSA supplier (“Company A” in the indictment), and Muller, the President of Company A, conspired with others to bribe three PDVSA officials in exchange for providing assistance in connection with Company A’s PDVSA business.  According to the indictment, in exchange for bribe payments the PDVSA officials allegedly assisted Company A in obtaining additional PDVSA contracts, inside information and payment on past due invoices. read more »

Trader Admits to Engaging in Spoofing and Manipulative Scheme at a Proprietary Trading Firm

The Commodity Futures Trading Commission (CFTC) today issued an Order filing and settling charges against Krishna Mohan (Mohan), in which Mohan admits to engaging in manipulative and deceptive schemes, along with other individuals, which involved thousands of acts of spoofing (bidding or offering with the intent to cancel the bid or offer before execution) in a variety of futures contracts traded on the Chicago Mercantile Exchange and Chicago Board of Trade. The Order finds that Mohan engaged in this unlawful activity while trading for his former employer, a proprietary trading firm named as “Firm A” in the Order.   

The Order requires Mohan to cease and desist from violating the Commodity Exchange Act’s prohibition on spoofing and the use of manipulative and deceptive schemes. The Order also bans Mohan for three years from trading and other activities in CFTC-regulated markets. read more »

Novartis socked with $1.5M whistleblower verdict

A New Jersey state jury on Tuesday hit Novartis Pharmaceuticals Corp. with net damages, totaling nearly $1.5 million regarding a former company executive’s claims that she was fired in retaliation for objecting to a proposed drug study.

The court rejected the pharmaceutical company’s stance that she was properly terminated for violating company policies.

On the second day of deliberations, the eight jurors, for the most part, sided with Min Amy Guo in her whistleblower suit. The suit alleged that she was fired for raising concerns in 2012 about the potential study of cancer drug Afinitor by pharmaceutical distribution company McKesson Corp., including that the study appeared to be a kickback to McKesson to help sell the medicine. read more »