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November 2015 Archives

Attorney Whistleblower Case Dismissed

As discussed in a previous SFMS blog, whistleblowers can be employees, suppliers, contractors, clients, or any individual who becomes aware of illegal activities - including attorneys. Although whistleblowers are often incentivized to come forward with information about legal violations, attorneys should be aware of specific restrictions before blowing the whistle. Recently, New York State Judge Joan A. Madden dismissed a case because the whistleblower, who was an attorney, broke ethics rules.

U.S. Government Sues Hundreds of U.S. Hospitals Over Claims of Medicare Fraud

Medicare is a federally-funded program that "provides subsidized medical insurance for the elderly and certain disabled people." According to 2013 estimates by the National Committee to Preserve Social Security, some 52.3 million Americans currently rely upon Medicare for their primary health and medical needs.

Tyson Foods fights against workers' right to class action status: part II

In a recent blog post, we began discussing the numerous lawsuits being waged against Tyson Foods related to allegations that the company continues to violate provisions of the Fair Labor Standards Act and engage in time-keeping practices which essentially amount to wage theft. We began discussing the 2007 lawsuit which was filed by some 3,000 low-income workers from one of the company's food processing plants who were granted class action status in their battle to recover wages which they assert the company failed to pay them.

DOJ Intervenes in Inchcape FCA suit

The Department of Justice ("DOJ") entered into a False Claims Act ("FCA") suit against a defense contractor that allegedly caused false claims to be made to the U.S. Government. Inchcape Shipping Services Holdings Ltd. ("Inchcape" or the "Company") is accused of overcharging the U.S. Government for port services around the world.

KT Tape False Advertising Class Action

Companies rely upon advertisements to attract customers. Catchy slogans and aesthetically pleasing posters have the potential power to convince people to buy a product. However, companies have an obligation to make sure their advertising is true and not misleading. If a company does not meet its duty, there are laws to protect consumers from false advertising. Last year, Red Bull settled a class action lawsuit that claimed its slogan, "Red Bull gives you wings," was false advertising. Unsurprisingly, Red Bull was unable to prove its energy drink could give its customers wings.

House Panel intervenes in SEC's Insider Trading Investigation

In a past blog post, "Humana Insurance Insider Trading Investigation Includes 44 Funds," we relayed the details of an investigation by the Securities and Exchange Commission ("SEC"). The investigation alleged that before the Centers for Medicare and Medicaid Services ("CMS") made an announcement regarding reimbursement rates for the Medicare advantage program, a senior aide in the House of Representatives leaked information about the rates to a privately held broker-dealer, Height Securities, LLC ("Height"), which provides research, advisory, and investment banking services to institutional investors, financial sponsors and corporations. The SEC claimed that Height passed on the information to its clients. Heights' clients were then able to buy a great deal of shares in healthcare insurance companies, which substantially increased trading for healthcare stocks right before the announcement. When the share price increased due to the positive announcement from CMS, these investors profited and allegedly did so as a result of receiving illegal information.

Tyson Foods fights against workers' right to class action status

There is power in numbers and that's one of the main reasons why the preservation of class action lawsuits among wronged employees is so important. Collectively, employees who are granted class action status have a much louder voice than any one or handful of employees acting alone.

SEC Anticipates Increase in Whistleblower Tips

The Dodd-Frank Wall Street Reform and Consumer Protection Act ("Dodd-Frank") is one of many laws that protect consumers from fraudulent acts committed by corporations. In order to increase transparency and expose organizations that engage in illicit activity, Dodd-Frank includes a "whistleblower program" that incentivizes individuals to come forward with information regarding possible securities law violations. If the information is original and leads to a Securities and Exchange Committee ("SEC") enforcement action in which more than $1,000,000 in sanctions is ordered, the SEC is authorized to provide monetary awards between 10 to 30 percent of what it collects to the individual.

California Volkswagen owners accuse carmaker of fraud

With a name that translates into English as "the people's car company," since its formation in 1937, the German motor vehicle company Volkswagen eventually grew to become the biggest carmaker in the world. However, when news of the company's deceptive practices related to emissions-rigging software became public earlier this fall, Volkswagen’s reign at the top came to an abrupt end.

Government contractor settles qui tam lawsuit for $26.75M

For many private businesses, a service contract with the United States government is a highly-coveted prize. notes that the U.S. government has paid out more than $8 billion dollars in contract deals. While many government contractors take care to ensure that they are accurate and ethical in their billing practices and dealings with the government agencies to which they provide goods and services, some regard a government contract as an opportunity to defraud the government and to essentially steal from U.S. taxpayers.