Financial exploitation and abuse is all too common in today’s day and age. In fact, it is one of the fastest-growing forms of abuse of seniors and adults with disabilities. According to a recent MetLife study, titled “ Broken Trust: Elders, Family & Finances ,” about one million seniors lose an estimated $2.6 billion annually from financial exploitation and abuse. Last October, the Financial Industry Regulatory Authority (“FINRA”) announced that it had submitted proposed ru

On March 29, 2017, Sen. Chuck Grassley and Sen. Ron Wyden, the founding members of the Senate Whistleblower Protection Caucus, introduced the IRS Whistleblower Improvements Act of 2017 , bipartisan legislation intended to improve communication between the IRS and whistleblowers and strengthen the protections for whistleblowers against workplace retaliation. “Whistleblowers are a crucial line of defense against waste, fraud and abuse,” said Wyden in a joint statement . “This

Being a whistleblower involves personal sacrifice and professional risk. Many violations of the law go unreported because people who know about them are afraid of being disciplined, losing their job, being demoted, or being passed over for promotion. Recognizing the financial, reputational and professional risks associated with whistleblowing, Congress included in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (the “Dodd-Frank Act” or the “DFA”) stron

As many investors know, the securities industry settles securities transactions ( e.g. , the purchase and sale of equities, as well as corporate and municipal bonds) on the third day after a transaction is executed by sending payment for the transaction to the seller and the securities to the buyer. This settlement cycle is known as “T+3” – shorthand for “trade date plus three days.” Prior to 1995, the financial markets operated on a longer settlement cycle – “T+5”. In 1995,

This Blog previously wrote about a case involving a whistleblower’s claim, under the “alternate remedy” provision of Section 3730(c)(5) of the False Claims Act (“FCA”), to settlement proceeds obtained in a later-filed action brought by the government even though the whistleblower had voluntarily dismissed his earlier qui tam action. Earlier this month, Judge William H. Pauley, III had the opportunity to address the issue in United States ex rel. Kolchinsky v. Moody’s Corp .

Medicare and Medicaid fraud costs taxpayers billions of dollars each year. In 2016, the Government Accountability Office (“GAO”) estimated that in fiscal year 2015, taxpayers lost almost $90 billion to improper payments from Medicare and Medicaid providers. The GAO defines an improper payment to be any payment that should not have been made or that was made in an incorrect amount (including overpayments and underpayments) under statutory, contractual, administrative, or ot

The Department of Justice ("DOJ") recently announced that CA Technologies ("CA") has agreed to pay $45 million to resolve allegations under the False Claims Act related to a General Services Administration ("GSA") contract awarded to the company for software licenses and maintenance services. CA is an international information technology management software and services company with headquarters on Long Island, New York. The government alleged that CA made false statements

The Financial Industry Regulatory Authority, Inc. ("FINRA") has proposed a rule change that will allow broker-dealers to project the performance of investment strategies or asset allocations, but not specific stocks, in communications with clients. If approved, the new rule would put brokers on an equal footing with registered investment advisers that are currently allowed to use these projections in their communications. The self-regulatory organization ("SRO") is currentl

Last November, this Blog discussed the faithless servant doctrine under New York law. ( Here .) As explained, the courts have applied the doctrine to a wide variety of misconduct, including, but not limited to, conflicts of interest, stealing money or goods, and secretly starting a competing business. Any act that can give rise to a claim for breach of fiduciary duty will trigger the doctrine. The penalty for violating the doctrine is harsh: the employee must forfeit all com

On February 21, 2017, the Supreme Court vacated the judgment in Bishop v. Wells Fargo & Co . and remanded the case to the Second Circuit “for further consideration in light of Universal Health Servs. v. United States ex rel. Escobar ,” in which the Court recognized the implied certification theory as “a basis for liability” in False Claims Act (“FCA”) lawsuits. In Bishop , the relators, Robert Kraus and Paul Bishop (together, the “relators”), brought a qui tam action unde

The New York Department of Financial Services' ("DFS") cybersecurity regulations became effective March 1, 2017, but the rules are slated to be phased in on a rolling basis 180 days after the effective date. The rules apply to financial institutions, financial services companies, insurance firms and other entities regulated by the DFS ("Covered Entities"). The rules require Covered Entities to establish and maintain cybersecurity programs in order to identify internal and ex

An important part of any litigation is documentary discovery. As any litigant can attest, especially in complex matters, documents form the foundation of discovery plans and strategies, and, more significantly, proof at trial. Consequently, litigants must collect and preserve their documents, particularly electronically stored information (“ESI”), from the moment they are aware of their involvement in a lawsuit, or when there is a reasonable anticipation that a lawsuit may be

Your client is engaged in negotiations to sell his company’s widgets in a purchase and sale transaction. After months of negotiations, the parties verbally agree to the salient terms of the transaction – that is, they agree to price, quantity, and specifications. You summarize these terms in an email on the same day. Your email also confirms that a formal contract will follow. The following day, you send the contract to the buyer and its counsel. The agreement contains the a

Over the past few weeks, this Blog has explored the advantages and disadvantages of forming a limited liability company (“LLC”), as well as the fiduciary obligations of non-managing members in manager-managed LLC to each other and the LLC itself ( here and here ). In today’s installment, this Blog will explore the circumstances under which a member in a multi-member LLC can obtain a judicial dissolution of the company. The Law Governing the Dissolution of an LLC An LLC i

This Blog has previously written about the bases upon which the losing party in an arbitration can challenge the award. ( Here .) Among the bases discussed include the arbitrator’s impartiality and his/her authority to hear the dispute and rule on the matter. What happens when a party to an arbitration is unhappy with the rulings and the proceeding before an award is issued? Can the unhappy party challenge the fairness of an ongoing proceeding, and, more particularly, the in

In a case of first impression for the courts within the Second Circuit, Judge Richard J. Sullivan of the United States District Court for the Southern District of New York answered the foregoing question: no. United States v. L-3 Commc’ns Eotech, Inc. , No. 15-cv-9262 (RJS) (S.D.N.Y. Feb. 3, 2017). An Overview of the False Claims Act and the Whistleblower Reward The False Claims Act (“FCA” or the “Act”) prohibits businesses and individuals from defrauding the government by

Last month this blog wrote about the Securities and Exchange Commission's list of exam priorities for 2017 here . Included in that list was a focus on registered representatives and employers with prior records of misconduct. This is also an exam priority for the Financial Institution's Regulatory Authority (Finra). The self regulatory organization has put in place a new exam unit that will focus on identifying high risk and recidivist brokers who pose a potential risk to in

Like their larger siblings, small businesses that do business with the government, e.g. , healthcare providers who receive reimbursement from Medicare or Medicaid, government contractors or subcontractors, and nonprofit companies that receive state or federal funding, are at risk of being the subject of a whistleblower claim. Given the risks, small businesses should have whistleblower polices in place – policies that can encourage employees to report misconduct internally and