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Proskauer Whistleblower Defense

Second Circuit Affirms No Extraterritorial Application For Dodd-Frank Anti-Retaliation Provision

Posted in Dodd Frank

In Liu v. Siemens A.G., No. 13-cv-4385, 2014 WL 3953672 (2d Cir. Aug. 14, 2014), the Second Circuit affirmed that the anti-retaliation provision in Section 922 of Dodd-Frank does not apply extraterritorially.  This post examines the Court’s reasoning and the implications of this decision—particularly for multinational employers.  For more on this decision, please review our Firm’s client alert. Continue Reading

Proskauer Obtains Dismissal of High-Stakes False Claims Act Suit

Posted in False Claims Act

On August 7, 2014, Judge Castel of the Southern District of New York dismissed a False Claims Act (“FCA”) complaint that was based primarily on allegations that the defendant Hospital improperly focused on referral revenue in its physician compensation decisions. The Court insisted that an FCA complaint must set forth specific facts supporting the allegations regarding the impropriety of the payments and at least representative actual claims submitted. Continue Reading

Second Circuit Strays From “Definitively and Specifically” Standard But Still Dismisses SOX Claim

Posted in SOX Whistleblower Decisions

On August 8, 2014, the Second Circuit affirmed the dismissal of a SOX whistleblower retaliation claim brought by a former AECOM Technology Corp. (“Company”) employee, holding that he did not engage in protected activity because he lacked a reasonable belief that the alleged conduct of which he complained violated one of the enumerated federal provisions in Section 806 of SOX.  Nielsen v. AECOM Technology Corp., No. 13-0235-CV (2d Cir. August 8, 2014).  Notably, however, the court abandoned the stricter standard – previously used by courts in the Circuit – that focuses on whether the employee’s protected communications “definitively and specifically” related to one of the listed categories of fraud or securities violations in Section 806. Continue Reading

SOX Claim Dismissed: Rejection of IP Assignment Clause Not Protected Activity

Posted in SOX Whistleblower Decisions

The U.S. District Court for the Northern District of Illinois recently granted a Rule 12(b)(6) motion to dismiss a SOX whistleblower retaliation claim, concluding that the plaintiff did not engage in protected activity.  Fuqua v. SVOX AG, No. 14-cv-216 (N.D. Ill. Aug. 1, 2014).  This is a useful decision for employers faced with SOX whistleblower claims alleging attenuated connections to fraud on shareholders. Continue Reading

SEC Issues Whistleblower Award, Waives Voluntary Requirement

Posted in SEC

The Securities and Exchange Commission (SEC) decided that a whistleblower who did not “voluntarily” provide information to the SEC was nonetheless eligible to receive a monetary award of $400,000. The whistleblower’s disclosure was not voluntary under the SEC’s own rules because it occurred after a previous inquiry to the company by a self-regulatory organization.  Nevertheless, the SEC concluded that it was “appropriate in the public interest and consistent with the protection of investors to waive the ‘voluntary’ requirement” and rewarded the whistleblower monetarily. Continue Reading

SEC Denies Whistleblower Award Claim for Harbinger-Falcone Recovery

Posted in SEC

As recently reported by Ed Benson of Law 360, on July 4th, 2014, the United States Securities and Exchange Commission (the “SEC” or “Commission”) issued a final order that denied a whistleblower award claim on the $18 million that the SEC recovered in a settlement agreement with Harbinger Capital Partners LLC (“Harbinger”) and the company’s chief executive Philip Falcone (“Falcone”). Continue Reading

Watchdogs Petition SEC to Strengthen Prohibitions Against Impeding Complaints to SEC

Posted in Best Practices, Dodd Frank, SEC

On July 18, 2014, a coalition of plaintiff-side lawyers and government watchdog groups proposed ways to strengthen the SEC whistleblower program in two petitions filed with the SEC.  The groups urged the SEC to update Rule 21F-17, which prohibits any action that would “impede” an individual from communicating with the SEC about securities law violations, by expanding its rules governing the use of nondisclosure agreements and increasing the scope of protections for whistleblowers. Continue Reading

Texas Federal Court Dismisses FCA Claims As Insufficiently Pled

Posted in False Claims Act

In U.S. ex rel. Williams v. McKesson Corp., No. 3:12-CV-0371-B (N.D. Tex. July 9, 2014), a Texas federal court recently dismissed a qui tam whistleblower suit by a former employee of McKesson, a Texas-based entity that provides billing-related services to the health care industry, holding that the former employee failed to establish “the existence of a false or fraudulent claim submitted to the government for payment.” Continue Reading