Dodd-Frank Act Impacts Whistleblowers | Hodgson Russ

The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 brings a new round of sweeping reform to our nation’s financial system. Under the Dodd-Frank Act, a whistleblower who provides “original information” to the U.S. Securities Exchange Commission (SEC) or the U.S. Commodity Futures Trading Commission (CFTC) is eligible to receive a portion of the proceeds recovered by the government as a result of a successful enforcement action.

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Whistleblowers and the False Claims Act’s Public Disclosure Bar

The False Claims Act’s “public disclosure bar” can sometimes prevent a whistleblower from pursuing a lawsuit based on information that has been disclosed in particular settings, such as government hearings, government reports, and news reports. In light of this provision, a company facing a potential whistleblower action may consider self-reporting potentially unlawful activity to government authorities before a whistleblower files.

“Beating the whistleblower to the punch” may be a useful strategy in some circumstances, but one should seek legal advice before moving forward. Self-disclosure has become a complicated area, and courts disagree on whether it triggers the public disclosure bar.

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Whistleblower Lawsuit Costs GlaxoSmithKline $750 Million

The Department of Justice (DOJ) has released its False Claims Act statistics for fiscal year 2010. According to this press release, the DOJ recovered $3 billion this year in False Claims Act recoveries, 83 percent, or $2.5 billion, of which involved health care fraud. The Obama Administration has made no secret of its focus on health care fraud, and health care companies have been in the news recently for getting caught up in false claims liability.

While the government made out pretty well this year, whistleblowers didn’t do too badly either, recovering $385 million. And one relator in particular has been in the news for her whistleblowing against one of the largest drug manufacturing companies in the world, GlaxoSmithKline, for one of the scariest health care frauds ever perpetrated. 

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