Blog
No Gag Clauses in Financial Services Settlements Oct 20, 2014
In an October Regulatory Notice, FINRA, in recognizing the contribution that whistleblowers make, reiterated that it is a violation of FINRA Rule 2010 to include confidentiality provisions in settlement agreements or any other documents. These include confidentiality stipulations made during a FINRA arbitration proceeding that prohibit or restrict a customer…
Largest Failure of Care Settlement Ever: Nursing Home Chain to Pay $38 million in Medicare Fraud Settlement Oct 10, 2014
One of the largest nursing home chains in the country, Extendicare, has agreed to pay $38 million to resolve allegations that it billed Medicare and Medicaid for substandard care at nearly three dozen facilities around the country, the Justice Department said Friday. A federal investigation into Extendicare prompted by whistleblowers…
Boeing Pays $23 Million for Labor Charges Fraud Oct 10, 2014
The Boeing Company has paid the United States $23 million to settle whistleblower allegations of fraudulent billing under maintenance contracts for the C-17 “Globemaster” aircraft at Boeing Aerospace Support Center (BASC) during the period of 2003-2007.The settlement resolves allegations originally brought in a lawsuit by present and former Boeing employees…
Defense Contractor Nailed for $13.7 million Oct 8, 2014
Virginia contractor DRS Technical Services agreed to pay U.S. $13.7 million to settle charges of overbilling the Army and Coast Guard, the Justice Department said Tuesday. The government contends that from January 1, 2003 to December 31, 2012, DRS billed CECOM for work performed by individuals whose job qualifications did…
Broker-Dealer Failure to Supervise Liability: Wells Fargo Advisors LLC Settles Burger King Insider Trading Charges with SEC for $5 Million Sep 23, 2014
Wells Fargo Advisors LLC has agreed to pay a $5 million penalty to settle SEC charges that a former broker engaged in insider trading of Burger King stock before the company's 2010 buyout.According to a criminal complaint filed in January, the Department of Justice alleged that Waldyr Da Silva Prado…
Second Circuit Adopts Bright-Line Rule For Determining Customer Status For Mandatory FINRA Arbitration Sep 22, 2014
Thirty years after the McMahon decision (Shearson/American Express Inc. v. McMahon, 482 U.S. 220 (1987)), which upheld mandatory arbitration of customer disputes, the Second Circuit Court of Appeals clarified under what circumstances a claim against a brokerage firm must be filed in arbitration in Citigroup Global Markets, Inc. v. Abbar, No.…
SEC to Pay $30 million in Its Largest Whistleblower Award Yet Sep 22, 2014
The SEC said Monday that it expects to pay more than $30 million in an award under its whistleblower program, more than double the agency's previous high for a payout under the plan. Click for SEC Release
FINRA Rule Proposal for New Hire Background Checks Moves to SEC Sep 18, 2014
FINRA is pushing ahead with a rule-change that would require brokerage firms to vet new hires more thoroughly. Firms already are expected to review job applicants. The new rule makes that requirement more stringent by forcing them to conduct a search of public records. Click for Proposed Rule Change
DoJ Criminal Division will Increase Scrutiny of False Claims Act Lawsuits for Criminal Prosecution Sep 17, 2014
Assistant Attorney General announces that the Justice Department's Criminal Division will increase its scrutiny of whistleblower allegations alleging fraud against the government. Click for Main Justice Article
Recent Corporate Fraud- Database of Actions Taken Against Companies by the US Government Since 2000 Aug 30, 2014
Brandon Garrett, professor at the University of Virginia Law School, has compiled a database of legal actions taken against corporate defendants by the US government since 2000. His findings provide, among other things, a summary of 2,163 guilty pleas and convictions as well as 303 companies that have agreed to…