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Government Enforcement Actions

Please also see our Recent Government Enforcement Actions page.

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February 9, 2024

Five broker-dealers, seven dually registered broker-dealers and investment advisers, and four affiliated investment advisors have been ordered to pay more than $81 million in total for longstanding, widespread violations of the recordkeeping provisions of the Investment Advisers Act of 1940.  The firms were found to have failed to maintain and preserve electronic communications since at least 2019.  The firms include Northwestern Mutual Investment Services LLC, Northwestern Mutual Investment Management Co. LLC, and Mason Street Advisors LLC, who will pay $16.6 million; Guggenheim Securities LLC and Guggenheim Partners Investment Management LLC, who will pay $15 million; Oppenheimer & Co. LLC, who will pay $12 million; Cambridge Investment Research Inc. and Cambridge Investment Research Advisors Inc., who will pay $10 million; Key Investment Services LLC and KeyBanc Capital Markets Inc., who will pay $10 million; Lincoln Financial Advisors Corp. and Lincoln Financial Securities Corp., who will pay $8.5 million; U.S. Bancorp Investments Inc., who will pay $8 million; and The Huntington Investment Company, Huntington Securities Inc., and Capstone Capital Markets LLC, who will pay $1.25 millionSEC

February 9, 2024

Simple Health Plans LLC and CEO Steven J. Dorfman have been ordered to pay $195 million for violating the FTC Act and Telemarketing Sales Rule and misleading consumers into believing they were signing up for healthcare plans that covered a wide array of services.  Despite  paying as much as $500 per month for benefits, consumers were essentially uninsured and exposed to limitless medical expenses.  FTC

February 8, 2024

The CFPB has ordered that Consumer First Legal Group, LLC, and attorneys Thomas G. Macey, Jeffrey J. Aleman, Jason Searns, and Harold E. Stafford pay $12 million in consumer redress and penalties for charging millions in advance fees to homeowners seeking foreclosure relief.  The advance fees charged were allegedly for legal representation, but the company and the attorneys failed to provide any.  CFPB

February 1, 2024

One of the nation’s largest healthcare systems, Providence, has agreed to forgive more than $137 million in medical debt and refund more than $20 million to patients following a lawsuit by Washington State.  According to the Attorney General’s Office, between 2018 and 2023, Providence trained staff to demand payments from low income patients who were eligible for financial assistance, then sent some of those same patients to debt collectors even if they were Medicaid beneficiaries.  Almost 99,500 patients will receive relief as a result of this settlement, with the average refund amounting to about $478.  WA AG

February 1, 2024

Marketing firm Publicis Health, which was agency of record for all of Purdue Pharma’s branded opioid drugs as well as for other opioid manufacturers, has agreed to a $350 million national settlement for helping to fuel the prescription opioid crisis.  A government investigation found that the multinational company farmed data from recordings of conversations between patients and providers and used that data to develop Purdue’s sales tactics.  As part of this settlement, Publicis has also agreed to disclose thousands of internal documents detailing its work for opioid companies, such as Purdue, on a public website.  CA AG; NC AG; PA AG

February 1, 2024

Hikma Pharmaceauticals has reached a settlement in principle with multiple states for $150 million following allegations that the opioid manufacturer failed to monitor and report suspicious orders.  From the settlement proceeds, $115 million will be paid in cash, while the remaining $35 million will be allocated toward opioid addiction treatment medications.  CA AG; NC AG; VA AG

January 31, 2024

In the fourth-largest Controlled Substances Act (CSA) settlement in history, e-commerce company eBay has agreed to pay $59 million for its failure to properly regulate the sales of pill presses and encapsulating machines on its website.  Such devices can be used to produce pills that mimic pills produced by legitimate pharmaceutical companies.  To combat this, the CSA requires that purchasers of such devices have their identities verified, recorded, and reported to the DEA; however, eBay failed to do so.  DOJ

January 24, 2024

Johnson & Johnson has agreed to pay $149.5 million to Washington State for its role in fueling the opioid epidemic after the Attorney General Bob Ferguson rejected a 2021 settlement and chose to continue litigation.  The company was a top supplier of ingredients used to make opioid drugs, and marketed the drugs for chronic pain conditions that studies showed were not effectively treated by opioids.  This is the fifth national settlement that Washington State has rejected, and the third so far that has netted the state more than it would have received under the national settlement.  WA AG

January 16, 2024

Silver Lake Hospital, a long-term care hospital in New Jersey, will pay $18.6 million, and its principal investors Dr. Richard Lipsky and Columbus Management South LLC will pay another $12 million, to resolve allegations of violating the False Claims Act and Federal Debt Collection Procedures Act (FDCPA).  The hospital allegedly claimed excessive cost outlier payments from Medicare, well in excess of its needs or ability to repay, and transferred millions of dollars to investors without receiving equivalent value in return.  DOJ

January 16, 2024

J.P. Morgan Securities LLC (JPMS) has agreed to pay $18 million to settle charges of violating the whistleblower protection rule of the Securities Exchange Act of 1934.  According to the SEC, JPMS asked hundreds of clients who received credits or settlements over $1,000 to sign confidentiality agreements that allowed them to answer SEC inquiries, but not voluntarily contact the SEC.  SEC
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