secEarlier today, the SEC announced that it would pay an unidentified compliance officer a whistleblower bounty award of between $1.4 and $1.6 million.   This is the second award that the SEC has made to a whistleblower with internal audit or compliance responsibilities.  According to the SEC, the recipient of the bounty award “had a reasonable basis to believe that disclosure to the SEC was necessary to prevent imminent misconduct from causing substantial financial harm to the company or investors.”  

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.

SEC LogoStephen Cohen, Associate Director in the Securities and Exchange Commission’s (SEC) Enforcement Division, recently advised companies being investigated to flaunt their compliance programs to the agency, according to an article in the Wall Street Journal (subscription required).  More specifically, while speaking on a panel at the 2013 Corporate Whistleblowing Forum, Mr. Cohen suggested that companies would benefit during investigations if they demonstrate a strong internal compliance program and a culture of compliance and ethics.  Officials from the Justice Department and Commodity Futures Trading Commission, who also spoke on the panel, agreed and reiterated that companies may garner goodwill if they are forthcoming with information and proactive when problems arise.   

In yet another large recovery for the DOJ, on December 6, 2012, DFB Pharmaceuticals, and its subsidiary, Healthpoint Ltd., agreed as part of a settlement to pay up to $48 million to resolve allegations that Healthpoint caused false claims to be submitted to Medicare and Medicaid for an unapproved drug, Xenaderm.  This settlement resulted from allegations against Healthpoint in a multi-defendant whistleblower action brought under the qui tam, or whistleblower, provisions of the False Claims Act.

On December 4, the Justice Department announced a record-breaking recovery of $4.9 billion in settlements and judgments in civil cases brought under the False Claims Act (FCA) for the fiscal year ending September 20, 2012. This year’s recovery eclipses the prior record by more than $1.7 billion. The last fiscal year’s recovery comprises more than a third of the total recoveries of $24.2 billion since the Act was amended in 1986.