Today’s headlines frequently feature major corporations targeted by employee whistleblowers. These whistleblowers have typically alleged fraud against the government, often in qui tam actions brought under the federal False Claims Act (FCA) or analogous state statutes. For a number of companies, settling the criminal and civil charges in these matters has cost hundreds of millions of dollars.
Last year’s Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”) included new whistleblower provisions for securities, accounting fraud, and bribery allegations by individuals against SEC- and CFTC-reporting companies. Dodd-Frank expands the FCA’s whistleblower incentives to cover all securities law violations, not just frauds perpetrated against the government. The new law also significantly increases the potential financial awards to whistleblowers. Employees who directly contact the SEC, for example, can receive between 10% and 30% of penalties that exceed $1 million.
Patterson Belknap’s False Claims Act and Whistleblower Defense Team regularly defends companies facing these allegations in a variety of industries, including pharmaceuticals, manufacturing, engineering, health care, financial services, and media, drawing as needed on our attorneys' extensive expertise in these areas among others. Our team includes complex commercial litigators, former prosecutors, a former state Attorney General, employment attorneys, and corporate and securities attorneys who come together to formulate and implement comprehensive strategies to address these claims.
Our clients benefit from our attorneys’ extensive, wide-ranging experience handling subpoenas and other governmental inquiries that precede a potential whistleblower lawsuit. Frequently, we are able to navigate the proceedings successfully in the early stages to avoid litigation. In the event the matter is not resolved, however, our elite trial team is well prepared to handle these issues in court.
In response to Dodd-Frank’s Whistleblower Program, Patterson Belknap attorneys are helping our clients protect themselves by strengthening their internal compliance programs. This includes incorporating a culture of compliance throughout the company, making reporting procedures readily accessible to employees, protecting privileged communications from misuse, and making sure that legitimate employee reports are investigated promptly and, if necessary, addressed quickly.
The firm’s recent matters include:
- Acting as pool counsel for a group of employees of a hospital consortium in a False Claims Act investigation conducted by the U.S. Attorney’s Office in New York. The investigation stems from claims of improperly assigning pay codes to patients.
- Representing a global manufacturing and engineering company in an action based on claims by a former employee that the company misrepresented discounts to commercial customers.
- Representing major institutions in connection with investigations and litigations brought under unfair and deceptive act statutes and the False Claims Act. These claims arise from allegations of pricing and reimbursement fraud.
- Representing a pharmaceutical manufacturer accused of violating the federal anti-kickback statute in a False Claims Act brought by the U.S. Department of Justice.
- Representing a premier medical device company in a federal False Claims Act action relating to federal procurement contracts.
- Representing a private equity firm in connection with whistleblower allegations.