Protecting What's Right

The United States has intervened in a False Claims Act suit filed against software manufacturer Oracle.  The government charges that the company bamboozled the government by charging it higher prices than the deeply discounted prices offered to Oracle’s commercial customers.  According to the Justice Department, the scheme violated federal regulations governing General Services Administration contractors hired under Multiple Award Schedule contracts, which cut through some of the usual red tape for federal agencies looking to purchase products from the GSA schedule.  To ensure that the government receives as good a deal as contractors’ commercial customers, contractors must provide the government with “the best price given to the most favored customer.”

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Wall Street goliath Goldman Sachs has disclosed in a filing with the Securities and Exchange Commission that it is being sued by computer network technicians for overtime pay.  The five plaintiffs, who routinely worked over 70 hours a week without receiving overtime pay, are seeking class action certification for themselves and others who were not paid overtime for work over the 40-hour workweek, as required by the Fair Labor Standards Act.  Their lawsuit claims that more than 100 employees in New Jersey and New York have been underpaid by Goldman Sachs.

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The maker of blood pressure medication ProAmatine will remove the drug from the market, after the U.S. Food and Drug Administration (FDA) threatened to recall the drug because of lack of proof concerning the drug’s long-term benefits.  The FDA stated that the maker failed to conduct postmarketing clinical trials to confirm the drug’s effectiveness.

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The New York Attorney General has announced an $8 million settlement with Affinon Group over charges that the company tricked online shoppers to sign up for discount clubs with hidden fees.  A restitution fund for consumers duped out of their money will be set up with $5 million of the settlement; the remaining $3 million comprises fines payable to the state.  Five other companies that used the marketing firm and others for similar programs have also settled the case for $2 million in restitution and fines.

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A New York judge has merged two derivative shareholder suits against Goldman Sachs executives regarding Abacus, the transaction that culminated in a $550 civil fraud settlement with the Securities and Exchange Commission (SEC) earlier this summer.  The SEC had accused the company of selling collateralized debt obligations without disclosing to investors that Goldman client Paulson & Co. had helped to choose and bet against the securities.

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A lawsuit against pharmaceutical company Wyeth—maker of the diet drug Redux—can proceed, according to a recent decision by the U.S. 6^th Circuit Court of Appeal.  The appeals court ruled that the estate of a woman who died because of the drug can proceed with its case alleging that the drug maker was negligent in bringing the drug to the market.

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The U.S. Food and Drug Administration (FDA) has announced an investigation into whether the drug Stalevo, which is used to treat Parkinson’s disease, may increase elderly patients’ risk of heart attack and stroke.  The FDA encourages patients taking the drug to talk to their physicians about their risk of cardiovascular disease.

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The nationwide recall of millions of eggs due to salmonella contamination has grown to over half a billion and now involves a second farm. Hillandale Farms of Iowa announced on Friday that it was recalling over 170 million eggs due to salmonella contamination.  The strain of salmonella affecting the Hillandale eggs is the same as that contaminating eggs recently recalled by Wright County Egg.  The Hillandale recall applies to eggs sold between April and August under the brand names Hillandale Farms, Sunny Farms, Sunny Meadow, Wholesome Farms, and West Creek.

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The Gulf Coast Claims Facility (GCCF) will begin accepting business and personal claims on Monday from those affected by the Gulf oil spill.

BP said last week that it was no longer accepting claims as the transition to the new entity was taking place. The oil giant, which said it has paid hundreds of millions of dollars in claims so far, will continue to handle claims put in by government entities.

Attorney Kenneth Feinberg, the man in charge of the $20 billion escrow account established to compensate oil spill victims for damages, emphasized Sunday that his facility is independent of the government and BP. Eligible businesses claims that submit a claim will be paid in no more than seven days and eligible individuals will receive a check within 48 hours, according to Feinberg.

Meanwhile, federal investigators are hearing testimony from BP executives in a joint probe into the cause of the explosion that led to the oil spill.

The hearings will continue through Friday.