Whistleblowing has traditionally involved insider reports of corporate wrongdoing by employees of a business. A recent whistleblower lawsuit may signal the start of a new era in the False Claims Act as businesses begin to turn in their unethical competition to the U.S. Government in order to preserve fair competition in the marketplace (and earn a bounty for their help).
Since the Ontario Securities Commission opened its whistleblower program to tips, at least four individuals have filed complaints against one of Canada’s largest private equity firms according to the Wall Street Journal. Officials at the Ontario Securities Commission and a unit of the Toronto Police Service have inquired about the matter with the multi-billion dollar investment firm at issue.
The Department of Justice (DOJ) is expected to investigate electronic health record (EHR) software providers for health care fraud following allegations against a major player that resulted in a $155 million settlement under the False Claims Act for skirting meaningful use regulations.
The Securities and Exchange Commission (SEC) recently agreed to provide approximately $2.5 million to a SEC whistleblower that worked for a government agency. The SEC whistleblower both provided the initial information that led to the opening of the case but also provided critical documents and testimony that accelerated the pace of the enforcement action. The SEC, per its policy, did not identify the whistleblower, the defendant or identifying details.
The $89 million settlement in May between Financial Freedom and the United States regarding claims under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 resulted in a $1.6 million bounty for a FIRREA whistleblower.
Celgene agreed to pay $280 million to settle a False Claims Act lawsuit brought in California accusing it of promoting two cancer drugs for unapproved uses. Pharmaceutical companies may only promote drugs for their FDA-approved indications even though doctors may legitimately prescribe them for off-label purposes. The False Claims Act authorizes whistleblowers to seek recovery (on behalf of the government) of the money it was improperly billed as a result of the improper marketing.
The National Highway Traffic Safety Administration (NHTSA) has yet to publish the proposed rules for the NHTSA whistleblower program. This whistleblower program was authorized by the Fixing America’s Surface Transportation (FAST) Act in December 2015.
A report earlier this month by the Financial Conduct Authority detailed the declining number of whistleblower tips reported to the British authorities. From 2014-15 to 2016-17, the number of reports has declined each year, resulting in just 900 cases in the last year. In 2014-15, the FCA had 1,340 whistleblower reports.
A media outlet, Financial Planning, is predicting that a pair of SEC whistleblowers will share an award of approximately $70.6 million out of the $307 million in regulatory fines against JPMorgan in 2015. Another outlet, Advisor Hub, put the number at $61 million instead. Either award amount would be the largest in the history of the SEC whistleblower program to date.
The Chief of the SEC’s Office of the Whistleblower, Jane Norberg, and the Director of the CFTC Whistleblower Office, Christopher Ehrman, spoke recently at the Practicing Law Institute’s program on June 28, 2017, titled Corporate Whistleblowing in 2017. Their comments covered a wide range of hot topics in the field of whistleblower law and were relayed in a recent JDSupra article, so we thought them appropriate to briefly detail here for current and potential Dodd-Frank whistleblowers.