Lawrence Hoskins, a UK citizen and former Alstom executive, was convicted last Friday on 11 of 12 counts for his role in a bribery scheme involving Indonesian officials. Hoskins conviction took years to secure because of jurisdictional challenges and appeals. Hoskins was originally indicted in 2013. Alstom itself settled FCPA charges at the end of 2014 and agree to pay roughly $770 million. Three other...
Last month, the California Attorney General released draft regulations for the California Consumer Privacy Act (CCPA). (Here). The regulations focus on three primary areas: (1) consumer notices; (2) consumer requests for information and handling of information; and (3) verification requirements. The implementation date for the CCPA is January 1, 2020. The deadline for submission of comments is December 6, 2019. The regulations will not become...
The Justice Department and the SEC have launched criminal and civil accounting fraud investigations against Under Armour. The sportswear maker has been suffering a rapid revenue decline over the last few years. The allegations focus on Under Armour’s accounting practices and shifting of sales from quarter to quarter to present a healthier picture of its finances than was actually occurring. Under Armour Culture Problems Over...
The Financial Industry Regulatory Authority is not known for its aggressive enforcement record. But that may be changing. FINRA recently fined BNP Paribas for $15 million for anti-money laundering deficiencies in the broker-dealer unit’s operations that allowed billions of dollars’ worth of suspicious penny stock and foreign currency transactions. BNP’s senior management failed to respond to repeated warnings from staff that the firm’s minimal AML...
Two charitable foundations that helped patients pay for drug co-payments settled anti-kickback charges for $6 million. The Patient Access Network Foundation (PANF) agreed to pay $4 million and Good Days agreed to pay $2 million to resolve AKS allegations. The charitable foundations were used as pass throughs for Denderon, Astellas, Amgen and other drug companies to funnel money to Medicare patients taking their drugs. The...
The Justice Department announced that three Unaoil executives entered FCPA guilty pleas last year. The three executives cooperated with law enforcement in the investigation and prosecution of other companies and individuals. In March 2018, the former Unaoil CEO, Cyrus Ahsani, and former Unaoil chief operations officer, Saman Ahsani, plead guilty to one count of FCPA conspiracy for paying millions in bribes to foreign officials in...
In today’s aggressive enforcement environment, corporate board members have a target on their respective backs. Even with robust liability insurance, corporate boards are operating in a state of “ignorance is bliss.” Chief compliance officers face enormous challenges, and perhaps their greatest challenge is enlisting and securing the support of the corporate board. We often hear about happy-talk about senior management and board support – but...
The Justice Department, in coordination with HHS-OIG and the FBI recently announced the arrest and prosecution of 35 individuals for a massive genetic testing fraud scheme involving dozens of telemedicine companies and cancer genetic testing laboratories (CGx). The defendants fraudulently billed Medicare more than $2.1 billion for CGx testing. Among those charged were 10 medical professionals, including nine doctors. In addition, CMS took administrative action...
Just to repeat myself – pharmaceutical and medical device firms face extraordinary risks of enforcement under the False Claims Act. While everyone likes to write and focus on FCPA or anti-corruption risks for global drug and device firms, a relative risk analysis is likely to reveal that False Claims Act risks significantly outweigh FCPA risks (not to diminish FCPA risks, but relatively speaking). As an...
On October 1, 2019, in In re Clovis Oncology, Inc. Derivative Litigation (here), a Delaware Chancery Court denied a motion to dismiss the plaintiffs’ claims under the Caremark decision against individual directors for failing to monitor the development of the biotech firm’s experimental drug and allowing it to permit inflated performance results. The Court’s decision was the second opinion issued by the Delaware courts in...
