Didn't see in notables….

Claire Mccusker #3 at DOJ gave a VERY INTERESTING speech on Monday….related to Q ops? Much of the speech was about the whistleblower statute and corporate compliance programs

Highlights:

But today I want to talk about our emphasis on corporate enforcement policy and in particular what we and the rest of the Department are doing to promote and incentivize corporate compliance.

But first let me just say that it is a privilege to be addressing this group of lawyers and compliance officers because you serve as gatekeepers, who endeavor every day to make sure that businesses operate legally and ethically. You are the first line of defense, and every day you work to prevent corporate misconduct from happening in the first place.

Q#964

WE ARE THE GATEKEEPERS OF ALL [BY ALL WE MEAN ALL] INFORMATION.

U1>CAN>EU>RUSSIA>IRAN>NK>SYRIA>PAK>>>

IRAN NEXT.

Now let me turn to why the Department is in the business of promoting compliance programs and what we are doing to get better at that task.

…two weeks ago, the Civil Division announced a False Claims Act reform that takes a page from the Corporate Enforcement Policy, and thus is very significant to the compliance profession.

In a pair of memos now codified in the Justice Manual, the Department recently curbed its own issuance of subregulatory guidance and limited the ways in which other agencies’ guidance can be used to prove violations of law both in the Department’s civil enforcement actions (such as False Claims Act cases) and in criminal prosecutions. This is a huge advance in administrative transparency and accountability vis-a-vis the regulatory community. In the wake of the new amendments to the Justice Manual, guidance documents may be used in certain evidentiary contexts—as evidence of scienter, for example, or of professional or industry standards—but the Department’s litigators may not “treat a party’s noncompliance with a guidance document as itself a violation of applicable statutes or regulations” because “guidance documents cannot by themselves create binding requirements that do not already exist by statute or regulation.”

When faced with new guidance, the best first step is to determine the extent to which a new guidance document mirrors the requirements of the underlying statutes and/or regulations, particularly in light of binding judicial precedent.

Let me make one final point about the new False Claims Act policy. We included an important note in the policy about the compliance program that exists at the time of the violation. The Department will take into account the nature and effectiveness of the company’s compliance program in evaluating whether the violation of law was committed knowingly and therefore whether the False Claims Act is the appropriate remedy in the first instance.

To be clear, the False Claims Act does not contain a “compliance defense.” And, the mere existence of a fig-leaf compliance program will not garner a company any benefit. Indeed, over the years we unfortunately have encountered companies that knowingly and intentionally circumvented their very own compliance programs. In one case, for example, a company ignored fraud complaints conveyed through its own compliance program, fired its compliance officer, and went so far as to go after the individuals who, in good faith and under the promise of confidentiality, conveyed their concerns about potential fraud in the company. These are not best practices. In situations like that, a compliance system that the company circumvents or does not adhere to could be highly relevant evidence that the company recklessly disregarded the law in violation of the False Claims Act.

https://www.justice.gov/opa/speech/remarks-principal-deputy-associate-attorney-general-claire-mccusker-murray-compliance

>>6587052

^^^DOJ focusing False Claims Act cases on effectiveness of compliance programs

Here's a nice write-up on what this actually means for a Defendant in a False Claims Act (whistleblower) case…

Compliance Weaknesses Equal “Reckless Disregard"

The government apparently could not prove that Medco Health’s upper management had actual knowledge of the alleged false invoicing or sufficient involvement in the billing process to have “reckless disregard” or “deliberate indifference.” Instead, in order to satisfy the FCA’s “knowledge” requirement, the government asserted in its complaint that Medco Health acted “with reckless disregard … of the truth or falsity of information it submitted to the United States” in support of its claims, because Medco Health’s board members and officers “failed to implement a corporate compliance program which satisfied the requirements of proper corporate practice and Delaware law.” (Medco Health is a Delaware limited liability corporation.)

The government’s complaint included a laundry list of actions that Medco Health’s board and officers failed to take that largely tracks the elements of an effective compliance program set forth under U.S. Sentencing Commission guidance on compliance and ethics programs, which is widely recognized as the bellwether standard for corporate compliance programs in the United States. Specifically, the government alleged that Medco Health acted with reckless disregard of the truth or falsity of its claims because its board and officers failed to:

establish an effective code of ethics

designate specific high-level personnel with direct responsibility for overseeing compliance who had direct access to the CEO and board of directors

appoint a compliance officer with responsibility for independently investigating and acting on matters related to compliance

inform employees of the existence and details of the company’s compliance program

arrange for regular reports to the board concerning internal investigations

establish effective methods of monitoring, auditing, or reporting on compliance, including without limitation establishing an anonymous hotline and providing protection for whistleblowers

implement systems to assure reasonable steps to respond to or investigate reported offenses

consistently enforce the company’s policies and procedures through corrective action

While referencing the obligations of Medco Health’s board under Delaware law, the Government expressly relied upon In re Caremark, 698 A.2d 959 (Del. Ch. 1996), the seminal case for the proposition that directors have a duty to implement a “corporate information and reporting system” that is reasonably designed to provide senior management and the board with timely, accurate information sufficient to allow them to assess the corporation’s compliance with applicable laws.

An Effective Compliance Plan Is No Longer Optional

Read more: https://www.hklaw.com/publications/failure-to-maintain-an-effective-compliance-and-ethics-program-can-expose-a-company-to-liability-under-the-false-claims-act-05-31-2006-1/

>>6587052

^^^DOJ focusing False Claims Act cases on effectiveness of compliance programs

Here's a nice write-up on what this actually means for a Defendant in a False Claims Act (whistleblower) case…

Compliance Weaknesses Equal “Reckless Disregard"

The government apparently could not prove that Medco Health’s upper management had actual knowledge of the alleged false invoicing or sufficient involvement in the billing process to have “reckless disregard” or “deliberate indifference.” Instead, in order to satisfy the FCA’s “knowledge” requirement, the government asserted in its complaint that Medco Health acted “with reckless disregard … of the truth or falsity of information it submitted to the United States” in support of its claims, because Medco Health’s board members and officers “failed to implement a corporate compliance program which satisfied the requirements of proper corporate practice and Delaware law.” (Medco Health is a Delaware limited liability corporation.)

The government’s complaint included a laundry list of actions that Medco Health’s board and officers failed to take that largely tracks the elements of an effective compliance program set forth under U.S. Sentencing Commission guidance on compliance and ethics programs, which is widely recognized as the bellwether standard for corporate compliance programs in the United States. Specifically, the government alleged that Medco Health acted with reckless disregard of the truth or falsity of its claims because its board and officers failed to:

establish an effective code of ethics

designate specific high-level personnel with direct responsibility for overseeing compliance who had direct access to the CEO and board of directors

appoint a compliance officer with responsibility for independently investigating and acting on matters related to compliance

inform employees of the existence and details of the company’s compliance program

arrange for regular reports to the board concerning internal investigations

establish effective methods of monitoring, auditing, or reporting on compliance, including without limitation establishing an anonymous hotline and providing protection for whistleblowers

implement systems to assure reasonable steps to respond to or investigate reported offenses

consistently enforce the company’s policies and procedures through corrective action

While referencing the obligations of Medco Health’s board under Delaware law, the Government expressly relied upon In re Caremark, 698 A.2d 959 (Del. Ch. 1996), the seminal case for the proposition that directors have a duty to implement a “corporate information and reporting system” that is reasonably designed to provide senior management and the board with timely, accurate information sufficient to allow them to assess the corporation’s compliance with applicable laws.

An Effective Compliance Plan Is No Longer Optional

Read more: https://www.hklaw.com/publications/failure-to-maintain-an-effective-compliance-and-ethics-program-can-expose-a-company-to-liability-under-the-false-claims-act-05-31-2006-1/>>6587150

> seeking to overturn the idea that corporations are "persons" under the law.

Read my posts this thread…..DOJ just announced they are cracking down on corporations in False Claims Act cases that don't have effective compliance programs. Hrm….lots of entities have sealed docs in their name maybe?

>>6587150

> seeking to overturn the idea that corporations are "persons" under the law.

Read my posts this thread…..DOJ just announced they are cracking down on corporations in False Claims Act cases that don't have effective compliance programs. Hrm….lots of entities have sealed docs in their name maybe?