CCCP False Claims Act & Whistleblower Laws 5 — Questions and Answers
Question 1: Under the Sarbanes-Oxley Act whistleblower provision (18 U.S.C. § 1514A), which employees are protected from retaliation?
- Employees of publicly traded companies and their contractors who report securities law violations (Correct answer)
- Only C-suite executives of public companies
- Employees of all companies with over 100 employees
- Federal government employees reporting financial fraud
Correct answer: Employees of publicly traded companies and their contractors who report securities law violations
SOX § 1514A protects employees of publicly traded companies and their subsidiaries or contractors who report violations of securities laws or SEC rules.
Question 2: A company discovers that a former employee has filed a sealed qui tam complaint. What is the company legally prohibited from doing?
- Taking retaliatory action against the employee for filing the complaint (Correct answer)
- Conducting an internal investigation into the alleged fraud
- Self-disclosing the potential violation to the government
- Retaining outside counsel to evaluate the claims
Correct answer: Taking retaliatory action against the employee for filing the complaint
The FCA's anti-retaliation provision prohibits adverse employment actions because an employee engaged in protected activity, including filing a qui tam complaint.
Question 3: In False Claims Act cases, what is the purpose of the 'government's share' versus the 'relator's share' distinction?
- The government retains 70-75% of proceeds when it intervenes; the relator receives 15-25% (Correct answer)
- The relator always receives 50% of the recovery as the original source
- The government and relator split proceeds equally in all cases
- The relator's share is fixed at 10% regardless of government intervention
Correct answer: The government retains 70-75% of proceeds when it intervenes; the relator receives 15-25%
When the government intervenes, it retains most of the recovery (roughly 75-80%) while the relator typically receives 15-25%; if the government declines, the relator may receive 25-30%.
Question 4: Which whistleblower statute has a SOX-style process where the initial complaint must be filed with OSHA before proceeding to federal court?
- The False Claims Act anti-retaliation provision under 31 U.S.C. § 3730(h)
- The Dodd-Frank SEC whistleblower provision
- The Energy Reorganization Act whistleblower provision (Correct answer)
- The Consumer Financial Protection Act
Correct answer: The Energy Reorganization Act whistleblower provision
The ERA whistleblower provision requires initial administrative filing with OSHA before a complainant can bring a case in federal district court.
Question 5: A qui tam relator's complaint is filed under seal. During the seal period, what is the government required to do?
- Investigate the allegations and decide whether to intervene (Correct answer)
- Immediately notify the defendant of the pending complaint
- Serve the defendant within 30 days
- Refer the complaint to state authorities
Correct answer: Investigate the allegations and decide whether to intervene
During the seal period, typically 60 days (often extended), the DOJ investigates the allegations to decide whether to intervene and take over the prosecution.
Question 6: Under the Dodd-Frank whistleblower program, an employee who first reports internally before going to the SEC is treated as if they reported to the SEC on which date?
- The date of the internal report, provided they report to the SEC within 120 days (Correct answer)
- The date the SEC receives the complaint
- The date the employer completes its internal investigation
- The date the employee retains legal counsel
Correct answer: The date of the internal report, provided they report to the SEC within 120 days
SEC rules allow whistleblowers who first report internally to receive credit as of their internal report date if they subsequently report to the SEC within 120 days.
Question 7: Which FCA provision creates liability for a person who conspires with another to submit a false claim, even if they did not personally submit the claim?
- 31 U.S.C. § 3729(a)(1)(C) (Correct answer)
- 31 U.S.C. § 3729(a)(1)(A)
- 31 U.S.C. § 3729(a)(1)(B)
- 31 U.S.C. § 3730(d)
Correct answer: 31 U.S.C. § 3729(a)(1)(C)
Section 3729(a)(1)(C) imposes FCA liability on any person who conspires to commit an FCA violation, extending liability beyond the person who actually submits the false claim.
CCCP False Claims Act & Whistleblower Laws 5
Under the Sarbanes-Oxley Act whistleblower provision (18 U.S.C. § 1514A), which employees are protected from retaliation?