The Corporate Observer : Washington D.C. Class Action Lawyer & Attorney : Steven Berk Law Firm : Consumer Protection, Corporate Abuse : The Corporate Observer Blog

The American economy will be strengthened by the new whistleblower provision in the Dodd-Frank financial reform bill. Reporting securities violations and other corporate misconduct will both strengthen the world’s confidence in American companies and limit fraudulent schemes before they metastasize. Whistleblowers – ranging from high-powered executives to entry level employees to average citizens can be among our most useful tools in combating fraud. For this reason, The Corporate Observer applauds the Dodd-Frank bill.

Under the new bill, whistleblowers will be eligible to receive:

(1)                           10% to 30% of any monetary penalty in excess of $1 million imposed as a direct result of their assistance, cooperation, and knowledge; and

(2)                           Statutory protection from employment discrimination.

Who are whistleblowers?

Conscientious and ethical citizens who become aware of corporate misconduct; and have the courage to stick their necks out to report that conduct to the appropriate governmental authority. A Whistleblower is not a snitch or a tattle tale. Rather they are vigilant citizens who speak up to protect others from becoming victims of corporate misconduct and securities fraud.

What is a whistleblower claim?

A whistleblower claim is a formal notice to the government, in this case the SEC, of wrongdoing. For example, if you become aware of illegal conduct such as:

(1)   Maintaining improper accounting practices;

(2)   Systematically misappropriating investor monies; or

(3)   Violating any other securities law;

you should consider submitting a whistleblower claim. Claims will be reviewed by the SEC and delegated to the appropriate regulatory department. From this point, the SEC will investigate the validity of the claim, the value in pursuing the accused party, and the proper penalty to assess.

To be clear, the Dodd-Frank Financial Reform bill allows whistleblowers to report any violation of securities laws to the SEC. Specific rules will be issued by the SEC in approximately 250 days.

Why file a whistleblower claim?

Individuals across America and across the globe invest in American businesses based on their reliability and integrity. Specifically, foreign governments purchase U.S. treasury bonds because they believe in the soundness of the American system. Violators of securities laws threaten the credibility and reliability of the American economy.

Those who invest in securities deserve your vigilance. Most securities are not held by wealthy individuals, but rather by average American investors who have 401K retirement accounts, college savings funds, and pension assets in stocks of public companies. Millions of American investors – thousands of people’s futures – depend on the credibility of the securities market for financial planning.

Acting as a whistleblower for securities fraud violations is every citizen’s opportunity to right corporate wrongs and protect consumers by limiting fraud.

How?

The Dodd-Frank Financial Reform Bill allows the SEC up to 270 days from July 21, 2010 to formulate rules and regulations for submitting a whistleblower claim to the SEC. Until these rules are finalized, the SEC has requested that complaints be submitted through its online forum (http://www.sec.gov/complaint.shtml) or by mail to the SEC’s complaint center at

SEC Complaint Center.

100 F Street NE

Washington, DC

20549-0213

Check back here for updates to the SEC’s claim submission guidelines and policies.

Legal Representation

Whistleblowers submitting claims anonymously are required to retain legal representation before submitting a claim. All other whistleblowers have the option to retain an attorney, but are not required to do so. At Berk Law we are experienced in whistleblower actions. Steven Berk has served in the General Counsel’s Office of the SEC and as an Assistant United States Attorney. If you’re interested in filing, or have any questions about a whistleblower claim please contact us at info@berklawdc.com   or visit our website, www.berklawdc.com for more information.

Assisted by Zach Kady

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Is an extra profit really worth jeopardizing the health of thousands of American consumers?

Generally, this blog focuses on the greed of the financial sector, but today I would like to shed light on the misconduct of a major pharmaceutical company. Companies like Pfizer have been putting profits over compliance to the detriment of society for years.

Pfizer was recently fined $1.19 billion in criminal penalties for the off-label marketing of Bextra. After rigorous testing, the FDA approved this drug for the sole purpose of easing arthritis pain and menstrual cramps. However, Pfizer employees, hungry for an extra profit, illegally marketed Bextra to doctors as a cure for all types of pain. This is referred to as “off-label marketing” and is illegal in most countries. In the United States, Federal Law prohibits pharmaceutical companies to market a drug to doctors or consumers for purposes other than those approved by the FDA and delineated on the drug’s label. According to Bloomberg, Pfizer also paid $1 billion in civil penalties relating to Bextra and two other drugs on the same day.

OVER $2 BILLION IN ONE DAY!   WHY SO MUCH?

Simply: Marketing off-label uses of drugs is almost always illegal.

I’m sure many of you are thinking, “I’ve had my doctor prescribe a drug meant for one illness in order to cure the symptoms of another.” Don’t worry; this is a common and legal practice under the Food, Drug, and Cosmetic Act. It can be a tricky legal matter, but the law permits doctors to prescribe a drug for any purpose that they deem safe and reasonable. Off-label prescription is particularly common in pediatric medicine. In fact, in an October 22^nd interview on NPR, Dr. Sydney Spiesel claimed that between 50% and 70% of all medications used by pediatricians are off-label but useful. Doctors learn about the off-label uses of drugs through medical journals and independent lab testing. Most drugs that are prescribed off-label are older and have been proven for other uses through extensive research and use.

So, why $2 billion in one day? Pfizer’s crime was marketing  Bextra and other drugs to physicians without solicitation and for uses other than those approved by the FDA. In short, off-label prescription by doctors is fine, but off-label marketing by pharmaceutical companies is expressly forbidden.  Prohibition of off-label marketing was upheld by the Supreme Court in USA v. Z Cosmetica U.S.C. 21 §§301-97. Any reasonable reader can see that overzealous marketing of off-label uses of pharmaceuticals would lead to a country flooded with “wonder drugs” – not a safe place if you ask me.

In its “Who We Are” portion of its website, Pfizer claims that it “believes that patients benefit from information about diseases and medical treatment options” and that “In order for patients to make good decisions about their health, they need access to health information.” This is an excellent policy, but while it recognizes the importance of access to information, Pfizer has shamefully ignored FDA regulations in attempts to supply its own version of the pertinent facts to doctors and consumers.

Pfizer and other companies need profits as incentives to work quickly and efficiently, but putting profits over compliance and ethics should be strongly discouraged.  Compliance in the world of pharmaceuticals translates to public health and safety. Is an extra profit really worth jeopardizing the health of thousands of American consumers? Hopefully the pain of the most recent fines will steer Pfizer’s shareholders and board members toward the right answer.

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