SEC Awards $3 Million to Joint Whistleblowers

The Securities and Exchange Commission today announced an award of $3 million to whistleblowers whose tip launched the SEC's investigation and subsequent successful enforcement action involving an alleged securities law violation that impacted retail investors. The whistleblowers submitted their tip jointly to the Commission and will share the award.

The SEC has now awarded more than $384 million to 64 individuals since issuing its first award in 2012.  All payments are made out of an investor protection fund established by Congress that is financed entirely through monetary sanctions paid to the SEC by securities law violators. No money has been taken or withheld from harmed investors to pay whistleblower awards. Whistleblowers may be eligible for an award when they voluntarily provide the SEC with original, timely, and credible information that leads to a successful enforcement action.  Whistleblower awards can range from 10 percent to 30 percent of the money collected when the monetary sanctions exceed $1 million.

As set forth in the Dodd-Frank Act, the SEC protects the confidentiality of whistleblowers and does not disclose information that could reveal a whistleblower’s identity. read more »

Indiana Hospital to Pay $3.6 Million to Resolve False Claims Act Allegations Arising From Kickbacks to Referring Physicians

The Department of Justice announced today that Rialto Capital Management LLC and its former affiliate RL BB-IN KRE LLC have agreed to pay $3.6 million to resolve allegations that Rialto and the Kentuckiana Medical Center, a Clarksville, Indiana-based hospital owned by RL BB, violated the Anti-Kickback Statute, the Stark Law, and the False Claims Act by engaging in illegal financial arrangements with two doctors who referred patients to KMC. Until November 2018, RL BB was an affiliate of Rialto, which oversaw management of the hospital.

The settlement resolves allegations that KMC, under the direction of Rialto, provided personal loans to two referring doctors and then repeatedly forbore from requiring repayment of those loans. The United States alleged that the hospital’s failure to collect on loans to key referral sources constituted a form of remuneration prohibited by both the AKS and the Stark Law. read more »

False Claims Act Complaint Against South Carolina Chiropractor, Pain Management Clinics, Urine Drug Testing Laboratories, and Substance Abuse Counseling Center

The United States has filed a complaint under the False Claims Act against Daniel McCollum, a chiropractor based in Greenville, South Carolina, and pain management clinics and urine drug testing laboratories that McCollum owned or managed for engaging in illegal financial relationships and providing medically unnecessary services and items, including urine drug testing and steroid injections and prescriptions for opioids and lidocaine ointment

The United States filed its complaint in three consolidated lawsuits pending in the United States District Court for the District of South Carolina under the qui tam, or whistleblower, provisions of the False Claims Act. Under the Act, a private citizen can sue on behalf of the government and share in any recovery. read more »