Deutsche Bank to pay $38 million in US silver price-fixing case

Deutsche Bank AG has agreed to pay $38 million to settle U.S. litigation over allegations it illegally conspired with other banks to fix silver prices at the expense of investors, according to court papers filed on Monday.

The settlement, disclosed in papers filed in Manhattan federal court, came in one of many recent lawsuits in which investors have accused banks of conspiring to rig rates and prices in financial and commodities markets.

The settlement had been expected since April, though terms had yet to be disclosed. In court papers, lawyers for the investors say the deal will likely be an "ice breaker" that will serve as a catalyst for other banks to settle. read more »

Ernst & Young to Pay $11.8 Million for Audit Failures

The Securities and Exchange Commission today announced that Ernst & Young LLP has agreed to pay more than $11.8 million to settle charges related to failed audits of an oil services company that used deceptive income tax accounting to inflate earnings.

Ernst & Young’s payment will be combined with the $140 million penalty agreed to last month by the audit client, Weatherford International, and money collected from two charged Weatherford employees for a total of more than $152 million that will be returned to investors who were harmed by the accounting fraud. read more »

Boston entrepreneur convicted of insider trading

A Boston-based real estate entrepreneur was convicted on Monday of engaging in insider trading with two friends after learning of India-based Apollo Tyres Ltd's planned attempt to buy Cooper Tire & Rubber Co in 2013.

Amit Kanodia, 49, was found guilty by a federal jury in Boston on 11 of the 19 counts he faced, including conspiracy and securities fraud. He was acquitted of the other eight counts of securities fraud, prosecutors said. 

The verdict was confirmed by a spokeswoman for the U.S. Attorney's Office in Boston. Kanodia, who had pleaded not guilty, is scheduled to be sentenced on Jan. 18. read more »

Exxon Chooses War in New York’s Probe of Climate Change Research

Faced with an investigation carrying potentially ruinous consequences, the energy company stops cooperating.

ExxonMobil Corp. has finally made its move to block a New York state investigation into whether the oil giant covered up its knowledge about climate change.

New York Attorney General Eric Schneiderman launched a sweeping fraud probe of Exxon in November 2015, based on suspicion that the energy company had misled investors, regulators, and the public on what it knew about global warming dating all the way back to the late 1970s. Even as it has fought parallel investigations by Massachusetts and the Virgin Islands, Exxon has cooperated with the New York probe, turning over more than 1 million pages of documents to Schneiderman’s office.

People familiar with the company’s thinking have said that New York’s unusually broad securities-fraud statute, the Martin Act, left Exxon no choice but to comply with Schneiderman’s investigation. read more »

Bad Patents and the False Claims Act

An interesting False Claims Act case has recently been unsealed. USA ex rel. Lower Drug Prices for Consumers (LDPFC) v. Allergan and Forest Labs., Case No. 16-cv-09 (E.D.Tex. 2016) (SEALED USA Complaint).

The False Claims Act provides special incentives for whistleblowers to uncover fraud against the U.S. Government.  The Act authorizes the whistleblower to file a qui tam lawsuit on behalf of the Government and then receive a cut of any recovered damages. See 31 U.S.C. §§ 3729–3733.  The whistleblower here LDPFC appears to be a branch of the hedge fund Foxhill Capital.

This case involves Allergan/Forrest Labs U.S. Patent No. 6,545,040 that is listed in the FDA Orange Book as covering the drug Bystolic.  The basic false claims argument is that the market price of Bystolic is high because of the patent coverage – but the patent is (allegedly) invalid.  If true, this means that Medicare, Medicaid, and the VA hospitals are all paying more than they should for the drug.  As stated by the complaint: “The current market price for Nebivolol (Bystolic) is a false price because the ‘040 patent is invalid.” read more »

 

 

Suit claims SRHS schemed to defraud federal health programs

The federal government is investigating claims in a lawsuit filed by a former Spartanburg Regional Healthcare System employee who alleges the health system schemed to defraud the government by filing false claims with Medicaid, Tricare and Medicare in order to boost revenues by “hundreds of millions of dollars” since 2009.

The suit alleges SRHS acquired medical practices and overpaid the physicians, resulting in losses to those practices, with the understanding that those physicians would refer patients to SRHS for more extensive medical procedures that could be billed to Tricare, Medicare and Medicaid. read more »

FINRA fines Merrill Lynch $2.8 million for reporting violations

The Financial Industry Regulatory Authority fined Bank of America's Merrill Lynch $2.8 million on Tuesday for what it called systemic violations in record-keeping and how the firm reported trades and order audit trail system data.

The allegations involve trade and order audit data that brokerages submit to FINRA, and which the regulator uses to detect, among other things, possible market manipulation.  read more »