Novo Settles U.S. Probe of Kickbacks, Disguised Salespeople

Novo Nordisk A/S has agreed to settle a U.S. probe of its marketing of diabetes drugs that allegedly included disguising salespeople as medical educators and paying kickbacks to persuade doctors to prescribe its medicines. The allegations were disclosed when a whistle-blower lawsuit was unsealed by a judge. read more

UBS, BNP, RBS Get Subpoenas in U.S. Treasuries Probe

Federal prosecutors have subpoenaed several banks as part of a criminal investigation into possible manipulation of the U.S. Treasuries market, according to people familiar with the matter.

The Justice Department issued subpoenas last month to banks including UBS Group AG, BNP Paribas SA and the Royal Bank of Scotland Group Plc seeking information on the $14 trillion market, said two people, who asked not to be named because the investigation is confidential. read more »

Executives Charged in Connection With Accounting Failures at Government Contractor

The Securities and Exchange Commission today announced charges against two former executives at a government contractor that was the subject of an SEC enforcement action earlier this year and paid a $1.6 million penalty for accounting failures.

The SEC Enforcement Division alleges that David Pruitt, the then-vice president of finance in the Army Sustainment Division of L3 Technologies Inc., circumvented internal accounting controls and caused L3 to improperly recognize $17.9 million in revenue from a contract with the U.S. Army by creating invoices that were not actually delivered at the same time that the revenue was recorded.  The extra revenue allegedly enabled employees in that division to barely satisfy an internal target for management incentive bonus payments. read more »

Blood Testing Laboratory to Pay $6 Million to Settle Allegations of Kickbacks and Unnecessary Testing

Quest Diagnostics Inc. has agreed to pay $6 million to resolve a lawsuit by the United States alleging that Berkeley HeartLab Inc., of Alameda, California, violated the False Claims Act by paying kickbacks to physicians and patients to induce the use of Berkeley for blood testing services and by charging for medically unnecessary tests. Quest, which is headquartered in Madison, New Jersey, acquired Berkeley in 2011, and ended the conduct that gave rise to the settlement.

“We rely on doctors to provide honest, independent recommendations regarding clinical testing,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Companies that pay kickbacks to referring doctors corrupt those doctors’ independence, leaving patients vulnerable to expensive and unnecessary testing.” read more »

SEC Charges EB-5 Operator With Securities Fraud

The Securities and Exchange Commission today announced that an Idaho man has agreed to pay back several million dollars he siphoned away for personal use rather than investing it as promised to create U.S. jobs through the EB-5 Immigrant Investor Program.

The SEC alleges that Serofim Muroff raised more than $140.5 million in EB-5 offerings to Chinese investors through his companies Blackhawk Manager and ISR Capital for the intended purposes of acquiring and developing luxury real estate in McCall, Idaho, and investing in gold mining ventures in Idaho and Montana.  Muroff allegedly misappropriated more than $5 million in investor funds for such unrelated uses as an investment in a zip line operation as well as his purchase of two personal residences, a Range Rover, and a BMW. read more »

A Whistle Was Blown, but Who Was Listening?

The Securities and Exchange Commission calls itself the whistle-blower’s advocate. But one participant in the agency’s lauded whistle-blower program isn’t so sure.

He is Michael J. Lutz, an accounting specialist who raised his hand in early 2013 when he was at Radian Group, the giant mortgage insurer. At the time, Radian was still weathering the subprime crisis; it had insured loads of soured mortgages, and Mr. Lutz believed the company was lowballing the amount it might have to pay in claims on the loans. read more »