A Question for Tesla’s Board: What Was Elon Musk’s Mental State?

There’s no question that Elon Musk is one of the great entrepreneurs of this era. He may even be in “a class of one,” as he recently described Tesla, the revolutionary electric car company he founded.

But Mr. Musk’s tweet last week — expressing his intent to take Tesla private and declaring that he had “funding secured” for the multibillion-dollar transaction — was so impulsive, potentially inaccurate, poorly worded and thought out, and with such potentially dire consequences for himself, Tesla and its shareholders, that the board now must ask a sensitive but vital question: What was Mr. Musk’s state of mind when he wrote it?

“What does this say about the judgment of the person who set all this in motion?” said Charles M. Elson, director of the Weinberg Center for Corporate Governance at the University of Delaware. “That’s what the board has to find out.”

Mr. Musk, in subsequent blog posts, has stressed that he was only trying to be as transparent with the public as he was about to be with a few major investors. read more »

Post Acute Medical Agrees to Pay More Than $13 Million to Settle Allegations of Kickbacks and Improper Physician Relationships

Post Acute Medical, LLC, a Pennsylvania-based operator of long‑term care and rehabilitation hospitals across the country, and certain affiliated entities through which the company operates its facilities (collectively, “PAM”), have agreed to pay the United States, Texas, and Louisiana a total of $13,168,000 to resolve claims that they violated the False Claims Act, and the Texas and Louisiana false claims statutes, by knowingly submitting claims to the Medicare and Medicaid programs that resulted from violations of the Anti‑Kickback Statute and the Physician Self‑Referral Law, the Justice Department announced today.

The Anti-Kickback Statute, in relevant part, prohibits offering or paying anything of value to encourage the referral, or to encourage recommending or arranging for the referral, of items or services covered by Medicare, Medicaid, and other federally funded programs.  The Physician Self‑Referral Law, commonly known as the Stark Law, prohibits a hospital from billing Medicare for certain services referred by physicians with whom the hospital has an improper financial relationship.  Both the Anti-Kickback Statute and the Stark Law are intended to ensure that medical decision-making is not compromised by improper financial incentives and is instead based on the best interests of the patient.

Since it was founded in 2006, PAM entered into numerous physician-services contracts on behalf of its hospitals.  Although the purpose of these contracts was ostensibly to retain physicians as medical directors or in other administrative or medical roles, the United States alleged that in reality the company’s payments under these contracts were intended to induce the physicians to refer patients to PAM’s facilities.  The company allegedly violated the AKS further by entering into what it called “reciprocal referral relationships” with unaffiliated healthcare providers such as home health companies.  In the course of those arrangements, PAM allegedly referred patients to those other providers with the understanding that those providers would refer other patients to PAM’s facilities. read more »

Citigroup settles U.S. charges of bad controls that led it to lose millions: SEC

Citigroup has agreed to pay $10.5 million to settle charges related to bad loans made by its Mexican subsidiary, Banamex, between 2008 and 2014, and to trader mismarking and unauthorized proprietary trading by Citigroup Global Markets Inc. from 2013 to 2016, the Securities and Exchange Commission said on Wednesday. read more »

SEC Charges Ameriprise Financial Services for Failing to Safeguard Client Assets

The Securities and Exchange Commission today announced that Ameriprise Financial Services Inc. will pay $4.5 million to settle charges that it failed to safeguard retail investor assets from theft by its representatives.

According to the SEC’s order, five Ameriprise representatives committed numerous fraudulent acts, including forging client documents, and stole more than $1 million in retail client funds over a four-year period. The SEC found that Ameriprise, a registered investment adviser and broker-dealer, failed to adopt and implement policies and procedures reasonably designed to safeguard investor assets against misappropriation by its representatives.

The five representatives were based in Minnesota, Ohio, and Virginia, and three previously pled guilty to criminal charges. Each of the representatives was terminated by Ameriprise for misappropriating client funds. The SEC’s order found that Ameriprise has implemented a new system to safeguard clients’ money and that Ameriprise reimbursed all impacted clients for the losses they incurred due to the misconduct of the five representatives. read more »