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

Last month, this Blog wrote about McGowan v. Clarion Partners, LLC , a decision involving the enforceability of a transaction term sheet. In McGowan , Justice Scarpulla of the New York County, Supreme Court, Commercial Division, held that the term sheet before the court was a binding contract because it contained all the material terms of the proposed venture that would reasonably have been expected to be included under the circumstances. This month, by contrast, Justice Sin

On the same day that he signed a directive ordering a review of the Labor Department's fiduciary rule (discussed here ), President Trump signed an executive order directing the Treasury Secretary and other regulators to review existing regulations to determine whether they support six core principles. Included in those principles are: Empowering Americans to make independent financial decisions; Fostering economic growth through more rigorous regulatory impact analysis; Advan

In this Blog’s last entry , we discussed the advantages and disadvantages of forming a limited liability company (“LLC”). Today’s entry discusses whether non-managing members of a manager-managed LLC owe fiduciary duties to the other LLC members and to the LLC itself. An LLC is a hybrid business entity having the attributes of both a corporation and a partnership. E.g. , Willoughby Rehabilitation & Health Care Ctr., LLC v. Webster , 2006 NY Slip Op. 52067(U) (13 Misc. 3d 123

New business owners have many decisions to make when they start a business. Many of these decisions will impact the business for years to come. Among them is the correct type of business to form. One of the most common business forms used by entrepreneurs is the Limited Liability Company (“LLC”). While LLCs share many of the same attributes as an S-Corporation or C-Corporation, they are more flexible and require less formalities and paperwork. An S-Corporation (formerly kno

In February, the Royal Bank of Scotland was hit with a $85 million civil penalty by the U.S. Commodity Futures Trading Commission ("CFTC") in connection with the bank's attempted manipulation of a benchmark tied to U.S. dollar based swap transactions over a five-year period from January 2007 through March 2012. The commodities watchdog found that RBS bid, offered and executed transactions that were pegged to the U.S. Dollar International Swaps and Derivatives Association Fix

The Anti-Retaliation Provisions of The False Claims Act: The decision to blow the whistle is not an easy one to make, especially when the person blowing the whistle does so on his/her employer. A person’s career, financial security, reputation and sometimes personal safety can be at risk. This is true whether the person worked for the company that is the subject of a potential whistleblower (or “qui tam”) action. Recognizing the risks, Congress amended the False Claims Act (

The enforceability of a covenant not to compete is an issue that commercial and business lawyers often consider in their practice. Sometimes, the issue arises when an employee leaves a business to open his/her own shop, while other times the issue arises in the sale of a company. On January 18, 2017, in Shimon v. Paper Enterprises, Inc. , 2017 NY Slip Op. 30101(U) , Justice Sylvia G. Ash of the Supreme Court, Kings County, Commercial Division, issued an injunction enforcing

Last month, this Blog wrote about the uncertainty surrounding implementation of the Department of Labor’s (“DOL”) fiduciary rule. On February 3, 2017, that uncertainty was reinforced with the issuance by President Trump of a memorandum directing the DOL to determine whether the fiduciary rule should be revised or rescinded. The memorandum directs the DOL to delay the implementation date of the rule by 180 days. What is the Fiduciary Rule? The regulations in question expande

Arbitration is an alternative dispute resolution mechanism that enables parties to resolve disputes without going to court. Arbitration is similar to a trial without the formalities. It is an adversarial proceeding where the parties can call witnesses and present evidence to a neutral arbitrator or panel of arbitrators. The rules of discovery and evidence are relaxed to make it a shorter and more cost-efficient process. An attorney or retired judge, who works for a private A