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SEC Announces Its Largest-Ever Whistleblower Awards

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Re: SEC Announces Its Largest-Ever Whistleblower Awards

#51

Post by dmix »

AlexCoventry wrote: post #12
refurb wrote: post #7

Whistleblowing can be it's own business model, just do a google search for Ven-a-care. Ven-a-care is a small pharmacy down in the Florida Keys. A few decades ago, it started to notice that the price it was paying for certain drug was very different from what the gov't thought they cost. Gov't price reporting is incredibly strict in pharma due to past mucking with the numbers. So they started a lawsuit which was picke…

It's great that Markopolos has found a way to make his forensic skills pay.

And in pharma it will continue to keep paying and paying as the fundamental problems creating 500% markups on drugs is never being solved [1]:

> "What they discovered was that they were buying drugs for a buck and Uncle Sam was paying $5 for 'em,” Burns says. “Five-hundred percent markups, 1,000 percent markups, 2,000 percent markups that Uncle Sam was paying.”

[1] http://slatestarcodex.com/2016/08/29/reverse-voxsplaining-dr...

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#52

Post by psergeant »

dopamean wrote: post #6

Does the SEC have a line item in its budget for whistleblower awards? If so what do they do if there are a lot of cases to pay out? Can they run out of money for these things? I'd love to know what that process looks like.

The linked article adds significant detail

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#53

Post by CryptoPunk »

_red wrote: post #18
matt4077 wrote: post #4

This program is a great example how setting the right incentives can destabilize a criminal conspiracy. It’s also worth noting that “traditional” law enforcement in white collar crimes is essentially the same: the possibility of criminal proceedings almost always outweighs the sort of incentives a corporation can offer lower-level employees. Would you risk jail time as a bookkeeper earning a 5-figure salary at #bigCo…

Those incentives cut both ways. It also creates a huge avenue for rogue employees to suddenly craft themselves payout strategies. The law firm that we use recently told about such an action they defended for another client. A disgruntled employee, who suspected they would soon be fired for lack of performance, "setup" certain actions, documents, prompted specific executive responses to emails, etc. The claim was that…

In both East Germany and Revolutionary France people had their enemies destroyed through these kinds of methods. They either found some dirt on them (not hard to do when everything is illegal), and reported it to the authorities, or simply fabricated allegations and reported those.

In East Germany it meant loss of their job, and possibly imprisonment. In Revolutionary France it was off with their heads.

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#54

Post by dmix »

turc1656 wrote: post #28
matt_wulfeck wrote: post #22

While I appreciate a criminal getting caught, these types of systems that incentives private citizens spying and reporting on one another are bothersome on many levels.

Why does it bother you? Do you equate it with some sort subset of McCarthyism - i.e. turning the government loose on your neighbor, etc.? To me, it's more of a "see something, say something" deal. But the issue with that is that there is a substantial personal risk to doing so when one works in the industry and usually the employer they are blowing the whistle on. That means they run the risk of destroying their care…

Completely agree, the reward is a counter balance to the real-world risks. It's not some idealistic regulatory system that bets on a finite group of agents to catch malicious actors in a rapidly changing systems with millions of events each day.

Nor does it create massive inefficiencies in the system by forcing every company/employee/transaction to jump through arbitrary hoops in order to verify they are legit, designed to catch yesterdays criminals.

Instead of paranoid dragnets it promotes enforcement on a case-by-case basis, sourced closer to problem and by the people who actually understand the problem.

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#55

Post by maxxxxx »

afarrell wrote: post #41
maxxxxx wrote: post #34

Earlier quoted context omitted.

I'd prefer them to get arrested like the rest of us when we do shady stuff.

I'd prefer to make conspiracies untenable than to strengthen them by penalizing those who betray the conspiracy. Then again, I also think we should offer Kim Jong Un a nice vacation home on St. Helena.

Considering that St. Helena was a pretty miserable place back then I tend to agree.

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#56

Post by bastawhiz »

kbutler wrote: post #48

> By law, the SEC protects the confidentiality of whistleblowers and does not disclose information that might directly or indirectly reveal a whistleblower’s identity. I wonder if they tell the IRS?

I would think it's in their best interest to not disclose anything to anyone. You don't want to do anything to disincentivize whistleblowers.

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#57

Post by maxxxxx »

s73v3r_ wrote: post #26
gadders wrote: post #15

Earlier quoted context omitted.

Bradley Birkenfeld did quite well whistleblowing on UBS [1]. $104m. https://en.wikipedia.org/wiki/Bradley_Birkenfeld#Whistleblow...

Considering many of these people end up blacklisted from their industry, we as a society kind of owe it to them.

We owe that guy 104 million?

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#58

Post by make3 »

bharris62 wrote: post #35
s73v3r_ wrote: post #26

Earlier quoted context omitted.

Considering many of these people end up blacklisted from their industry, we as a society kind of owe it to them.

you cannot be fired for being a whistleblower, so if you 'all the sudden' had performance problems and got fired shortly after whistleblowing, i imagine courts would side with you.

if you really can't be fired, you surely won't be doing any actual work ever, even if you still get paid.

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#59

Post by pbhjpbhj »

refurb wrote: post #46
Bromskloss wrote: post #37

Earlier quoted context omitted.

> the price it was paying for certain drug was very different from what the gov't thought they cost Is this a sign of wrongdoing? I don't know how things are supposed to work.

Drug pricing isn't transparent. The list price is publically available, but many manufacturers offer point of sales discounts or rebates. For some drugs the actual price might only be 10% of the list price. This makes it hard for Medicare and Medicaid to know how much to reimburse. It's in the drug company's and the pharmacy's best interest that what Medicare pays is as high as possible, since the difference between…

>and the companies get sued for every pill they sold at that wrong price. //

They should instead lose all profits, and the C-grades lose all that years compensation and be barred temporarily from starting any new companies.

Only if misdeeds jeopardise their other profits will they take notice, otherwise it's always worth trying the fraud because they can do some business without fraudulently presenting prices and so maintain the business.

These sorts of deleterious actions should lead to punishment that risks putting the company in to receivership.

Re: SEC Announces Its Largest-Ever Whistleblower Awards

#60

Post by refurb »

pbhjpbhj wrote: post #59
refurb wrote: post #46

Earlier quoted context omitted.

Drug pricing isn't transparent. The list price is publically available, but many manufacturers offer point of sales discounts or rebates. For some drugs the actual price might only be 10% of the list price. This makes it hard for Medicare and Medicaid to know how much to reimburse. It's in the drug company's and the pharmacy's best interest that what Medicare pays is as high as possible, since the difference between…

>and the companies get sued for every pill they sold at that wrong price. // They should instead lose all profits, and the C-grades lose all that years compensation and be barred temporarily from starting any new companies. Only if misdeeds jeopardise their other profits will they take notice, otherwise it's always worth trying the fraud because they can do some business without fraudulently presenting prices and so…

One particular penalty that is an option is being disbarred from participating in Medicare/Medicaid. Depending on the disease the drug treats, that can be 50% of your market. And you're disbarred as an entity, not just the individual drug.

Interesting, when Pfizer was found to be promoting off-label use of their drug (another no-no), they were disbarred. Well... their Pharmacia-Upjohn subsidiary was disbarred. Luckily that entity doesn't actually have any sales.

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