How mistreating whistleblowers could become a liability for you and your company

The repeated attempts by Barclays' Chief Executive Officer (CEO) Jes Staley to uncover the identity of a whistleblower at the British bank demonstrates how employees' confidence in their ability to raise grievances can be easily shattered, according to the partner of a consultancy which helps firms to establish robust whistleblowing systems.

"Jes Staley has, at a stroke, punctured the trust that his workforce has in this incredibly important thing," read more »

Betting on Zero: Herbalife doc feeds investors' feud as director claims 'dirty tricks'

Ted Braun’s film investigating allegations of pyramid scheme has strong debut – but saga involving business leaders, Latino activists and US officials is not over

When a documentary film questioning Herbalife’s business practices hit the festival circuit last year, the global nutrition giant launched a swift, devastating counterattack.

The stakes, after all, were high. The film, Betting on Zero, asked if the company was a vast pyramid scheme that bilked hundreds of thousands of poor, vulnerable people in the US and across the world. The company maintains its direct sales model has been misunderstood.

Herbalife, which had net sales last year of $4.5bn, appeared to have learned from SeaWorld, which hemorrhaged revenue and public support after a critical documentary, Blackfish, found wide release. read more »

Virginia Social Services settles for $7 million over alleged false claims for SNAP funds

The Virginia Department of Social Services recently agreed to pay the federal government $7.1 million to resolve allegations that it violated the False Claims Act in its administration of its food stamp program, the Department of Justice announced today. read more »

False Claims Defendants use “Attorney Advice” at their own risk

The “advice of counsel” defense can be a powerful armor for defendants against criminal and civil accusations that require a showing of intent. But that armor has a weak spot, too—its use may result in a defendant’s waiver of attorney-client privilege.

That’s what happened to several defendants facing a $330 million False Claims Act lawsuit involving alleged Medicare kickbacks for blood test referrals who were ordered by a federal district court to give over seven years’ worth of attorney communications to Department of Justice prosecutors.

Shell Knew Nigeria Ex-Minister's Company Would Get Oil-Deal Cash

Transaction under investigation amid allegations of corruption

Company previously said it was unaware minister would be paid

Royal Dutch Shell Plc said it knew some of the $1.1 billion paid to the Nigerian government in 2011 for an exploration license would go to a company linked to the country’s former oil minister, changing its previous stance on a deal that’s under investigation for alleged corruption.

The Anglo-Dutch oil company reiterated that its joint purchase with Eni SpA of the license was “fully legal” and it paid no money to Dan Etete or his company Malabu Oil and Gas Ltd. Following the publication of internal emails showing staff discussed the risk that funds from the transaction could ultimately be used to pay off officials, Shell acknowledged on Tuesday that it was aware of the former minister’s involvement. read more »

China's anti-corruption watchdog probes insurance regulator suspected of graft

The country's anti-corruption watchdog is investigating allegations of market manipulation within the industry. The probe is part of a wider crackdown on corruption ordered by President Xi Jinping.

China's anti-corruption watchdog has begun an investigation into the director of its top insurance regulatory body in a move that could prove problematic for some of China's most powerful firms. read more »

'Best banker in America' blamed for Wells Fargo sales scandal

An investigation by Wells Fargo & Co's board laid blame for the company's unauthorized accounts scandal on a high-pressure sales culture and a retail executive obsessed with stamping out negative views about her division.

The report, carried out by board Chairman Stephen Sanger and three other independent directors and released to media on Monday, said former retail division head Carrie Tolstedt ignored the systemic nature of abusive sales practices and accused her of impeding the board's efforts to address an issue that festered for years. read more »

Sheelah Kolhatkar and the Case Against Steve Cohen and SAC Capital

Steve Cohen is not in jail.

He was not criminally prosecuted.

But Mathew Martoma is in jail.

Martoma worked for Cohen at SAC Capital.

And in one week in 2008, together they made $275 million for SAC Capital after dumping and shorting the stocks of Elan and Wyeth after Martoma learned in advance about the results of a drug trial for an Alzheimer’s drug they were developing.

Martoma was sentenced to jail for nine years. He’s appealing his conviction.

Federal prosecutors in New York decided against criminally charging Cohen. Instead, they charged SAC Capital. SAC Capital pled guilty and paid a total of $1.8 billion.

That leaves Cohen with about $10 billion and able to start another hedge fund in 2018.

New Yorker writer Sheelah Kolhatkar lays out the whole sordid tale in one of the best corporate crime books of the year. read more »

J&J seeks dismissal of whistleblower's retaliation claims

Johnson & Johnson urged a judge on Monday to dismiss claims that one of its subsidiary retaliated against a former employee whose whistleblower lawsuit led to an $18 million settlement with the U.S. Justice Department.

Melayna Lokosky, a former sales representative for J&J unit Acclarent, said she was unlawfully fired in 2011 after raising questions internally about the off-label promotion of a medical device called the Relieva Stratus MicroFlow Spacer, or Stratus. read more »