Archives: Whistleblower

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SEC Adopts Amendments to Whistleblower Program Rules

The Securities and Exchange Commission has voted to adopt numerous amendments to the rules governing its whistleblower program. See https://www.sec.gov/news/press-release/2020-219 The whistleblower program serves as a significant tool for the Commission to encourage individuals to come forward with information regarding suspected security fraud. As set forth in the SEC’s press release, “The amendments to the … Continue Reading

SEC Announces Largest Whistleblower Award of 2020 – Over $27 Million

The Securities and Exchange Commission (the “SEC”) announced a whistleblower award of more than $27 million, representing the largest SEC whistleblower award of 2020.  This is the sixth largest award overall since the inception of the SEC whistleblower program in 2011. Congress established the whistleblower program to incentivize whistleblowers to report specific, timely, and credible … Continue Reading

CARES Act $2.2-Trillion Emergency Relief Fund Potential ‘Hotbed’ for Government Fraud, Abuse Investigations

With enactment of the CARES Act on March 27, Congress appropriated $2.2 trillion, the largest economic stimulus package in history, to combat COVID-19 and the serious economic damage it has wrought to all facets of the economy. Along with this mammoth government subsidy, however, comes the prospect of unprecedented fraud and abuse in sectors of … Continue Reading

Congress Considers Proposed Protections for Intelligence Community Whistleblowers

The United States House Oversight and Reform Subcommittee on Government Relations is considering proposed changes to protections available to U.S. Intelligence Community (IC) whistleblowers. The Subcommittee’s January 28, 2020, public hearings received testimony from David K. Colapinto, National Whistleblower Center, Glenn A. Fine, U.S. Department of Defense, Elizabeth Hempowicz, Project on Government Oversight, Michael E. … Continue Reading

Over $2 Billion in Sanctions Ordered by the U.S. Securities and Exchange Commission

In its 2019 Annual Report to Congress, the U.S. Securities and Exchange Commission (“SEC” or “Commission”) whistleblower program announced a “momentous milestone”: The SEC has ordered over $2 billion in sanctions since the inception of the whistleblower program. The Report outlined other key statistics from FY 2019.  Approximately $60 million was awarded to eight individuals … Continue Reading

The Waiting Is the Hardest Part: Staff Decreases, Whistleblower Claim Increases Strain OSHA

A February 20, 2019 article from Bloomberg Law provides statistics to explain the significant delays experienced by litigators and attorneys alike in Occupational Safety and Health Administration’s investigation of whistleblower claims. A substantial increase in the number of whistleblower complaints filed with OSHA over the past five years and a contemporaneous decrease in the number … Continue Reading

A Look Back at Key Corporate Governance and Internal Investigations Issues in 2018

2018 was a transformative year for corporate governance. Record whistleblower awards, an increasing number internal investigations partly arising out of the #MeToo movement, an expansion of the role of companies’ boards, and corporate social responsibility all shaped 2018. This is our retrospective review of these trends.  Record Whistleblower Tips and Awards and Possible Changes Companies … Continue Reading

Effective Compliance Programs Require a Commitment from the Top

We follow the leader wherever we go, and that applies to compliance, as well. While federal and state laws require organizations to adopt compliance programs, a low level of commitment to these compliance efforts from the highest levels of management can pose a serious threat to the implementation and sustainability of such programs. It is … Continue Reading

Record High Awards and Supreme Court Decision Further Incent Potential Whistleblowers to Report Conduct to the SEC

On March 19, 2018, the Securities and Exchange Commission (“SEC”) announced its highest ever Dodd-Frank Act (“DFA”) bounty awards to three whistleblowers. These SEC awards represent a new milestone in the SEC’s ongoing efforts to incentivize would-be whistleblowers to report unlawful conduct directly to the Commission. Two whistleblowers will divide a nearly $50 million award … Continue Reading

Retaliation Plaintiff Not a Covered Whistleblower under Plain Reading of Dodd-Frank Act, Court Rules

A former employee who failed to show he reported alleged securities law violations to the Securities and Exchange Commission (SEC), as required under the Dodd-Frank Wall Street Reform and Consumer Protection Act (DFA), cannot claim his former employer unlawfully retaliated against him, federal Judge William J. Martini has ruled. Price v. UBS Financial Services, Inc., … Continue Reading

Circuit Split Over Protection Afforded By Dodd-Frank Whistleblower Provision Widens

In Somers v. Digital Realty Trust, 15-17352 (9th Cir. March 8, 2017), a split Ninth Circuit Court of Appeals widened an existing circuit court split by ruling that Section 21F of the Dodd-Frank Act (“DFA”) protects individuals who make internal disclosures as well as those who make disclosures to the Securities and Exchange Commission (“SEC”). … Continue Reading

CFTC Has Banner Year For Enforcement Actions in FY2016

The U.S. Commodity Futures Trading Commission (CFTC) recently released its enforcement results for fiscal year 2016.  In FY 2016, the CFTC filed 68 enforcement actions and obtained restitution, disgorgement and penalty orders totaling approximately $1.29 billion.  The CFTC collected and deposited at the U.S. Treasury over $484 million in civil monetary penalties, nearly double the … Continue Reading

California Court Rules Sarbanes-Oxley Preempts California Law Regarding Privileged Communications in Suit by Former In-House Counsel

By determining that the Sarbanes-Oxley Act (“SOX” or the “Act”) preempts California’s ethical rules, the Northern District of California ruled that an in-house attorney can rely on privileged communications and confidential information to the extent they are reasonably necessary to assert a claim or defense. Wadler v. Bio-Rad Laboratories, Inc., et al., No. 3:15-cv-02356 (N.D. … Continue Reading

U.S. Securities and Exchange Commission Surpasses $100 Million in Awards Through Whistleblower Program

On August 30, 2016, the U.S. Securities and Exchange Commission (“SEC”) announced that it surpassed the $100 million mark in monetary awards for whistleblowers. Through the enactment of the Sarbanes-Oxley Act of 2002 and the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (“Dodd-Frank Act”), Congress established the whistleblower program to incentivize whistleblowers … Continue Reading

Sometimes a Complaint is Just a Complaint: Eighth Circuit Applies Reasonableness Standard to Reject Employee’s SOX Retaliation Claim

Earlier this summer, in Beacom v. Oracle, the U.S. Court of Appeals for the Eighth Circuit affirmed summary judgment dismissing the SOX and Dodd Frank Act claims of an employee who was fired from his Vice President position after he says that he complained about changes in his employer’s financial forecasting. The Court upheld dismissal … Continue Reading

SEC Announces Third-Highest Award Ever to Whistleblower

On May 17, 2016, the Securities and Exchange Commission (SEC) announced that it would award between $5 million and $6 million, the third-highest award ever, to a whistleblower who provided information detailing securities violations committed by the whistleblower’s former employer. Under the so-called “bounty” provision of the Dodd-Frank Act, the SEC is authorized to award … Continue Reading

“Put Up or Shut Up:” The Third Circuit Denies Former Tyco Employee’s SOX Whistleblower Claim

There have been a series of legal battles since 2009 between Tyco Electronics Corp. and its former accounts payable manager, Jeffrey Wiest, fired for sexually harassing and engaging in inappropriate sexual relations with several female subordinates. In the latest skirmish, a Third Circuit panel unanimously backed Tyco, holding that Wiest was, in fact, discharged for … Continue Reading

Best Practices When a Current Employee Complains

It is vital that all employers investigate internal complaints that may be covered under a variety of laws, including EEO laws (for example, Title VII, ADA, ADEA, and state EEO laws), whistleblower laws such as, Sarbanes-Oxley, Dodd Frank (and state whistleblower laws), OSHA, the False Claims Act, and the NLRA. Additionally, employers conduct investigations in … Continue Reading

NEW JERSEY SUPREME COURT ADDRESSES CRIMINAL LIABILITY OF WHISTLEBLOWERS

When the Supreme Court of New Jersey held in Quinlan v. Curtiss-Wright Corp., 204 N.J. 239 (2010) that an employee’s unauthorized taking of an employer’s confidential documents can constitute protected activity when the documents are used in support of a discrimination claim. it left several vexing questions unanswered. In particular, the Court did not explain … Continue Reading

New Jersey Supreme Court Rejects Heightened Standard For “Watchdog” Whistleblowers

Written by Richard J. Cino and Michael D. Ridenour In a decision that is likely to have far-reaching impact on employers, the New Jersey Supreme Court has rejected a heightened standard for “watchdog” employees, i.e. employees whose job duties include ensuring legal compliance, to prove whistleblower liability under the New Jersey Conscientious Employee Protection Act … Continue Reading

SEC Action Impacts Employer Confidentiality Agreements

The Securities and Exchange Commission recently settled its first administrative proceeding and enforcement action under the Dodd-Frank Act involving an employer’s use of a form confidentiality agreement.  The SEC found the agreement, which prohibited employees from discussing aspects of internal investigations without prior law department authorization, could interfere with the employee’s ability to communicate with the Commission regarding … Continue Reading

Corporate Executives Sentenced to Prison for $3.4M Kickback Scheme

Two former executives at one of the nation’s leading healthcare claims processing firms, MultiPlan, Inc., were recently sentenced to serve one year and one day in federal prison for their role in a scheme to steer contracts to technology vendors in exchange for $3.4 million in bribes and kickbacks. Keith Bush, MultiPlan’s former Vice President … Continue Reading

Justice Department Announces Recovery of Nearly $6 Billion From False Claims Act Cases in Fiscal Year 2014

The Justice Department announced that it secured a record $5.69 billion in settlements and judgments from civil cases involving fraud against the government in the fiscal year ending September 30, 2014 (“FY2014”).  This marks the first time the Justice Department recovered more than $5 billion in these cases, bringing the total recoveries under the False … Continue Reading
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