SEC’s Proposed Rule 21F seeks regulatory balance

4 November 2010

Yesterday, the SEC published for comment proposed SEC Rule 21F implementing the securities whistleblower provisions of the Dodd-Frank Wall Street Reform Act.*  While the proposed Rule contains some laudable features, it would in some ways undermine whistleblower incentives that Congress intended to deliver through Dodd-Frank.  Examples?  Read on. Let’s take the bad news first.  Incredibly, […]

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Are Medicare FIs/MACs immune from FCA liability?

28 October 2010

What if a Medicare fiscal intermediary (like Cahaba*) knows or is recklessly ignorant that Dr. Fraud is not a licensed physician and yet pays Dr. Fraud $20,000 in Medicare funds for cancer treatments?  Is Cahaba immune from liability to the government for Dr. Fraud’s false claims under the False Claims Act?  Answer:  No, not if […]

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SEC whistleblowers: How confidential, really?

23 August 2010

What level of confidence should prospective confidential* SEC whistleblowers have that their identities will remain forever undisclosed?  Answer: Next to zero.  Whistleblowers of all varieties — including SEC ones — should expect that eventually, one way or another, their role in blowing the whistle will come out.

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Development Fund for Iraq missing $8.7 billion

27 July 2010

False Claims Act and SEC whistleblower claims could be lurking in records, such as they are, of the Development Fund for Iraq.  The U.S. Department of Defense is unable to account for 96 percent of $9.1 billion in Development Fund for Iraq money it has received, according to an audit report just released by the […]

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Goldman v Dell: Will SEC enforcement volatility sideline securities whistleblowers?

26 July 2010

Why did Dell pay $100 million in a strong case while Goldman Sachs paid $550 million in what many say was a “weak case”?   Why did Michael Dell and Kevin Rollins end up settling for $4 million each but Goldman’s Lloyd Blankfein paid nothing?  For would-be SEC whistleblowers  — whose financial rewards depend on “monetary […]

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Accounting Fraud Charges Snag Dell Computer and Execs

24 July 2010

Is the SEC on a roll or just looking over its shoulder at salivating securities whistleblowers? On the heels of settling with Goldman Sachs last week for $550 million, the SEC yesterday announced its $111+ million take from settling accounting fraud charges against Dell Computer and several current and former Dell executives including Michael Dell, […]

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Did Dodd-Frank spur the SEC’s $550M Goldman Sachs settlement?

24 July 2010

Was it mere coincidence that the SEC suddenly settled with Goldman Sachs for $550 million — a figure widely seen as a fraction of what Goldman should have paid — on the same day, July 15, 2010, that the new SEC whistleblower bounty program finally passed both houses of Congress?

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CIDs on the rise in whistleblower investigations?

22 July 2010

United States attorneys pursuing false claims actions are using civil investigative demands (“CIDs”) more frequently than in the past in False Claims Act qui tam cases, according to panelists at a July 20, 2010 ALI-ABA False Claims Act webcast. The CID uptick comes thanks to Section 5 of DOJ Directive No. 1-10 (full document after […]

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Nashville whistleblower awarded treble damages

21 July 2010

Wondering how seemingly small falsehoods can produce large whistleblower awards?  In a recent Tennessee case, a general contractor was tagged for treble damages totaling $1,661,423 after his subcontractor completed 98 percent of the electrical work on a military base construction project. Turns out the subcontractor failed to pay his electricians Davis-Bacon Act “prevailing wages” as […]

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Dodd-Frank signed by the President

15 July 2010

The leviathan Dodd-Frank Wall Street Reform and Consumer Protection Act was  signed by President Obama on July 21, 2010.  In the Senate version of the bill, neither “Wall Street Reform” nor “Consumer Protection” appeared in the bill’s title, a fact not lost on Iowa Senator Chuck Grassley who opposed it:  “It’s a bill that most […]

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