FCPA! DOJ & SEC Resource Guide just published

14 November 2012

FCPA! It doesn’t mean what you think it means. Which is why the DOJ and SEC have just co-authored a book explaining what they mean when they say “FCPA.” The Foreign Corrupt Practices Act (“FCPA”) is a favorite SEC and DOJ enforcement tool. Some folks have no clue what it means. Others don’t care. Many […]

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6th Circuit joins 2nd & 7th: In FERA § 4(f)(1), “claims” means “cases”

3 November 2012

Words mean things, don’t they? The next sentence is a real mouthful, so take a deep breath before proceeding. Yesterday, in United States ex. rel. Sanders v. Allison Engine Co., Nos. 10-3818/10-3821, the 6th Circuit Court of Appeals held that the word “claims” — in the phrase “all claims under the False Claims Act,” in § […]

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UVA-BYU MetaFraud: SEC droid we’re looking for?

26 September 2012

Researchers at University of Virginia and BYU have developed what may be the Holy Grail of securities-fraud surveillance: a software algorithm they’ve named MetaFraud. In a forthcoming article in MIS Quarterly, co-authors Ahmed Abbasi, Conan Albrecht, Anthony Vance, and James Hansen, describe the algorithm, which they say identifies financial statement fraud with 80-percent accuracy. According to a […]

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PCAOB’s Chinese “Potemkin audit” plan: Blame state secrecy & Western colonialism?

24 September 2012

$12.8 billion.  That’s the market capitalization created by reverse mergers through which 159 Chinese companies entered U.S. securities markets between January 1, 2007 and March 31, 2010. Speaking at Cal State Irvine last Friday, PCAOB Member Lewis H. Ferguson disclosed that of these companies, 67 have had their auditors resign, while 126 have been “delisted” […]

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False Claims Act tax twister: Are relator’s attorney fees deductible?

24 September 2012

Yes and no. Internal Revenue Code § 62(a)(20) is the authority on the federal income tax treatment of fees paid by whistleblowers to their attorneys, in federal FCA and federal-law based whistleblower retaliation cases.  IRC § 62(a)(20) says that such attorney fees, if paid after October 22, 2004 with respect to any judgment or settlement occurring […]

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Legal perspective on IASB-FASB revenue recognition draft: It’s complicated!

18 September 2012

Got revenue? Better learn to account for it. It’s not going to get any easier, thanks to a new standard coming soon, from your local FASB and IASB. For SEC whistleblowers and attorneys engaged in many business-related practice areas, revenue accounting can be a big issue. It is the most common source of financial reporting […]

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Huge: IRS awards $104 million to whistleblower Birkenfeld

11 September 2012

Kudos to Bradley Birkenfeld and the IRS Whistleblower Office!  Six years into its “new” Whistleblower Program, the IRS has finally paid its first award [see update below], a whopping $104 million to banking whistleblower Bradley Birkenfeld. Talk about sending a message. In its determination letter, the IRS provided [see update below] considerably more information about […]

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Modest & mysterious: SEC’s issues first whistleblower award

22 August 2012

For the past three months, suspense has been building among the whistleblower bar over how much the SEC would pay to whom and why.  Now we know . . . not much except that the first award was for $50,000, paid to _________, in relation to a case that remains mostly a mystery.  With this […]

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9th Circuit: Underbidding for Cost-Plus Contracts is False Claim

9 August 2012

False Claims Act liability can result from low-ball bidding on cost-plus government contracts, according to the 9th Circuit’s August 2, 2012 decision in U.S. ex rel Hooper v. Lockheed Martin Corporation, No. 11-55278 (9th Cir. Aug. 2, 2012). Relator Nyle J. Hooper argued that Lockheed deliberately under-estimated its costs in support of a low-ball bid submitted […]

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Blowing the Whistle for Paterno on Louis Freeh & Penn State

2 August 2012

Louis Freeh’s post-mortem hatchet job on Joe Paterno deserves to be booed out of every stadium in the country.  So does the NCAA’s absurdly hypocritical, overblown response.  Nice to see that other knowledgeable observers agree, as Paul Mirengoff writes at Powerlineblog. Mirengoff quotes an (unfortunately) unidentified friend and former prosecutor who wrote: As to the […]

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