Whistleblowers’ Should Seek Counsel – Not Line the Pockets of Short Sellers
A recent news article in the New York Times, “The Bounty Hunter of Wall Street,” featured Andrew Left, an “activist” short seller who receives leaked documents and other intelligence about publicly-traded companies from confidential sources. Armed with this information, short sellers leak negative information to the press. When the information negatively impacts the target company’s stock price, the short sellers make millions.
As the article states, short sellers use inside information related to potential wrongdoing by publicly-traded health care companies, including pharmacy benefit managers (PBMs). PBMs are involved in literally every prescription that is dispensed, nationwide, every day. They play a critical role in the Medicare prescription drug program, Medicare Part D. The PBM industry is also one of the most opaque segments of the healthcare arena. It will take someone with access to drug data received by the PBM and drug data generated by the PBM to shed light on the inner workings of this multi-billion dollar industry.
Like PBMs, virtually every healthcare company earns significant revenues from billings to government funded programs, most notably Medicare and Medicaid. There are significant federal dollars spent on the federal employees health benefits program (FEHBP), and the healthcare programs for our military, including Tricare. A major portion of state budgets are also dedicated to funding healthcare for state and county employees.
However, there is a more appropriate use for inside information related to potential wrongdoing by publicly-traded or privately held healthcare companies, including PBMs. When the inside information is related to potential healthcare fraud (or other government contractor fraud), the taxpayers who contribute their hard-earned money to federal and state treasuries, and the person who assists in that endeavor by providing needed information, should be benefitting from that information – not wealthy short sellers.
There are programs that reward insiders who assist in ferreting out wrongdoing and returning fraudulent profits to federal and state governments. Those with knowledge of potential wrongdoing by any company that profits from federal or state government funds would do well to seek competent counsel who specializes in bringing cases under the federal False Claims Act, analogous state false claims acts, or the private insurance whistleblower statutes of California and Illinois. All of these statutes provide the relator, a person who is the source of such information, with share of the recovery (from 15 to 30%, and in the case of the California statute, potentially higher), in recognition of the whistleblower’s efforts.