King & Spalding, Winston & Strawn, Latham: Business of Law

Emory University is paying $ 1.5 million to settle federal civil claims violating the False Claims Act through clinical trial billing practices at the Winship Cancer Institute.

Yesterday’s agreement settles allegations by the US Department of Justice that the institute billed Medicare and Medicaid for services that the clinical trial sponsor agreed to pay. This emerges from a statement by the US Attorney’s Office in Atlanta. The government claimed that in some cases the sponsor of the study also paid the cancer institute, resulting in a double payment to Emory.

Richard Shackelford, Phyllis Sumner and Michael Paulhus of King & Spalding LLP represented Emory. Shackelford declined to comment on the settlement.

The university acknowledged accounting errors over a 10-year period but said in a statement that the settlement “is in no way an agreement or an admission that the university has liability under the False Claims Act”.

Emory spokeswoman Nancy Seideman said in a telephone interview: “The quality of care and the examinations performed have never been questioned. This is about a complicated billing process. “

The settlement does not include a so-called corporate integrity agreement that requires long-term monitoring of the process, Seideman said.

The lawsuit was brought under the whistleblower provisions of the False Claims Act. This law allows the individual bringing the lawsuit to participate in the recovery process. The amount the whistleblower will receive has not been disclosed.

T. Reed Stephens, a partner at McDermott Will & Emery LLP, who specializes in health and life sciences, said the settlement was on the low end. Stephens, who served in the civil fraud division of the Department of Justice’s civil division and followed up such cases, stated that the government normally wants to settle for at least double the amount of damages. The Emory settlement could be twice what the government claims to have lost.

“The cost of defense could have played a significant role in the university’s decision to resolve it,” he said. “If it’s a lengthy investigation, the legal costs can run into millions.”

“Without the whistleblower, the government probably wouldn’t have known about it,” said Stephens.

Legal costs

U.S. banks legal tab tops $ 100 billion in crisis cleanup

The six largest US banks, led by JPMorgan Chase & Co. and Bank of America Corp., have amassed $ 103 billion in legal costs since the financial crisis, more than any dividends paid to shareholders in the past five years were paid.

This is the amount allocated to lawyers and litigation, as well as bad mortgage settlement and foreclosures, according to Bloomberg. The sum, equivalent to $ 51 million a day, is enough to erase everything the banks made for 2012.

The rising bills have angered bankers who are counting on cost reductions to offset slow sales growth and make room for larger payouts. Roughly 40 percent of legal and litigation costs have been incurred since January 2012, and banks are warning that the number of regulators, prosecutors and investors could increase if new claims are made. The outlook tarnishes the outlook for stock prices, and by some estimates the damage could last for another decade.

JPMorgan and Bank of America contributed around 75 percent of the total costs, according to company reports. JPMorgan has spent $ 21.3 billion on legal fees and litigation since early 2008, more than any other lender, and added $ 8.1 billion to its mortgage repurchase reserves, records show.

Five years after the financial crisis rocked global markets, banks are accused of misleading mortgage-backed buyers, manipulating interest rates on global credit pricing, and manipulating the credit derivatives and commodities markets.

The data was compiled from quarterly reports to the Federal Reserve, SEC, and investors from January 2008 through June 2013. The reports come from Bank of America, JP Morgan, Citigroup Inc., Wells Fargo & Co., Goldman Sachs Group Inc. and Morgan Stanley Y-9C forms, which contain bank holding companies with assets of more than $ 500 million to submit to the Fed. The forms contain specific costs, such as legal costs, that exceed 3 percent of total interest-free expenses.

Some banks differentiated between litigation costs and legal fees, which could include routine costs of running a business such as drawing up contracts instead of litigation. Most expenses at JPMorgan, Bank of America, and Citigroup, however, were specifically litigation-related, the records show.

The spokesmen for the six banks declined to comment on their legal costs.

The total would be billions of dollars higher if US cases were counted with the largest European banks. HSBC Holdings Plc, Europe’s largest lender, agreed last year to pay $ 1.92 billion for the handling of US money laundering probes. UBS AG, Switzerland’s largest lender, announced in July that it would pay Fannie Mae and Freddie Mac $ 885 million for claims it had improperly sold mortgage-backed securities.

Barclays Plc, UBS and the Royal Bank of Scotland Group Plc were fined a total of $ 2.5 billion to clarify allegations by regulators in the US and elsewhere that they helped defeat that of the Londoner Manipulate the reference interest rate offered by the interbank.

For more click here.

In the courts

Credit Union Agency wins appeals court ruling on big bank suits

The National Credit Union Administration has won an appeals court ruling bringing claims against major banks for allegedly misleading claims about the marketing of mortgage-backed securities.

The Denver Court of Appeals unanimously upheld a lower court ruling that the NCUA can rely on an “extender law” that gives it more time to file what lenders said was late been.

This “serves the purpose of the law by giving the NCUA sufficient time to investigate and file any potential claims once they take control of a failed credit union,” the three-judge panel said.

Tuesday’s ruling triggers an appeal from RBS Securities Inc. that caused a judge in the Kansas City, Kansas court this year to halt most progress on several related cases pending resolution.

NCUA has filed similar lawsuits against entities of Goldman Sachs Group Inc., JPMorgan Chase & Co. and other banks. RBS Securities is a unit of the Royal Bank of Scotland Group Plc.

Ed Canaday, a spokesman for RBS Securities, declined to comment on the ruling.

“We are pleased with the court’s decision,” said NCUA board chairwoman Debbie Matz in a statement. “We will pursue our claims against companies that have sold faulty mortgage-backed securities to corporate credit unions.”

The Alexandria, Virginia-based agency has reportedly entered into settlements of $ 335 million with Bank of America Corp., Citigroup Inc., Deutsche Bank AG and HSBC Plc.

The case is National Credit Union Administration Board against Nomura Home Equity Loan Inc., 12-3295 and 12-3298, U.S. Court of Appeals for the 10th Circuit (Denver).

Law firm news

Winston & Strawn will open their Silicon Valley office in September

Winston & Strawn LLP will be opening an office in Palo Alto, California next month. The new office is the seventeenth in the world, the company said in a statement, reflecting its efforts to expand its intellectual property litigation practice.

Winston & Strawn has more than 200 attorneys working in various areas of IP law, including more than 20 partners who have led IP litigation for the first time in various courts in the US and Europe.

“This new office will be an important anchor to serve our growing number of local Valley customers,” said Thomas Fitzgerald, the company’s managing partner, in the statement.

The office is led by partner David Enzminger.


Omnicom’s Attorney: Inside the Publicis-Omnicom Merger: Video

Mark Gerstein, global chairman of the merger and acquisition practice at Latham & Watkins LLP, spoke to Bloomberg Law about his representation of Omnicom Group Inc. in the merger with Publicis Groupe SA, a combination that will create the world’s largest advertising company.

In this “Rainmakers” episode, Gerstein also explains the unique challenges of this “fusion of equals”.

To see the interview, click here.

Before it’s here, it’s in the Bloomberg Terminal.


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