Lack of trust caused by impropriety poses ‘systemic risks,’ FSB chairman tells G-20 members.

The global financial system is subject to emerging vulnerabilities from misconduct by traders and bankers as well as from developments in financial technology, Bank of England governor Mark Carney wrote in a letter to leaders of the Group of 20.

Mr. Carney, writing in his capacity as the chairman of the Financial Stability Board, the global financial standards setter, said, “The incidence of financial sector misconduct has risen to a level that has the potential to create systemic risks by undermining trust in both financial institutions and markets.” read more »

Simi Valley woman awarded $15.4 million after investing in Ponzi scheme pushed by insurance salesman

A Simi Valley retiree was awarded $15.4 million in damages Wednesday after insurance giant MetLife was found liable for losses she suffered in an investment that turned out to be a Ponzi scheme.

A Los Angeles Superior Court jury said that the New York insurer, two of its subsidiaries and broker Tony Russon should pay the punitive damages to Christine Ramirez — on top of about $240,000 she lost in the scheme run by now deceased Sherman Oaks money manager Bruce Fred Friedman.

Although MetLife officials indicated that they might appeal the case, the amount of punitive damages awarded to Ramirez could make it more likely for the insurer to pursue settlements with nearly 100 other plaintiffs who also lost money. read more »

Did whistleblower out First Mortgage's $7.5 million Ginnie Mae mortgage bond fraud?

The Securities and Exchange Commission is offering a reward to the whistleblower that revealed a scheme at First Mortgage Corporation that involved several of the company’s senior executives lying about the performance of the mortgages the company originated, re-securitizing them, and defrauding investors out of $7.5 million – if in fact there is one.

Earlier this year, the SEC fined First Mortgage and the company’s chairman and CEO, president, and chief financial officer, and other executives a total of $12.7 million for pulling current, performing loans out of Ginnie Mae mortgage bonds by falsely claiming the mortgages were delinquent in order to sell them at a profit into newly-issued residential mortgage-backed securities. read more »

DOJ: Doctor's group performed medically unnecessary drug screen procedures

Coastal Spine and Pain to pay over $7M for violation of False Claims Act

A physicians group, Coastal Spine and Pain, has agreed to pay $7.4 million to the federal government to resolve allegations that it violated the False Claims Act by performing medically unnecessary drug screen procedures, the U.S. Department of Justice said Wednesday.

The settlement relates to the business' use of tests that identify and count particles of illicit drugs in patients' urine. The DOJ said the quantitative drug tests, which are very specific and expensive, are appropriate only if there is reason to doubt the more general and cheaper qualitative drug test screens. However, the DOJ said regardless of results of the less expensive test, Coastal performed and billed all patients for the quantitative drug tests. read more »

2nd Circ. Judges Doubt Dismissal Of JPM Whistleblower Suit

Two Second Circuit judges had clear misgivings Thursday about the dismissal of former JPMorgan Chase & Co. wealth management pro Jennifer Sharkey's whistleblower retaliation suit against the megabank, saying a dispute about whether Sharkey was fired for performance reasons appeared to be a question for a jury.

Judges Reena Raggi and Denny Chin said repeatedly throughout oral arguments in the wake of U.S. District Judge Robert W. Sweet's 2015 dismissal of the Sarbanes-Oxley Act damages suit that disagreement between Sharkey and her former boss, defendant Leslie Lassiter, over why she was fired was not easily resolved on the law alone.

The bank says Sharkey, who had at least $250 million in assets under management when she was fired in August 2009. read more »

Omnicare Asks To Appeal $421M FCA Suit To 1st Circ.

Omnicare urged a Massachusetts federal judge Wednesday to certify for appeal her decision to greenlight a $421 million False Claims Act suit alleging the pharmacy company took kickbacks from drugmaker Organon. 

Omnicare asked the judge either to reconsider her recent order declaring two relators had provided sufficient evidence to raise questions about whether the company engaged in unlawful conduct or to allow the company to appeal that ruling to the First Circuit. Omnicare argued its conduct was protected by a "regulatory discount safe harbor" allowing drug discounts as long as they are disclosed to the federal government on request. read more »