On November 19, 2020, the U.S. Department of Justice announced that it had entered into settlement agreements with a Johnson & Johnson subsidiary and a private equity firm, the Gores Group. The settlement with TGG related to alleged False Claims Act violations by a former TGG portfolio company. This settlement is the latest indication of a continuing trend in FCA enforcement actions against private equity firms. It underscores for private equity firms the need to assess the heightened risk of FCA liability in connection with portfolio companies operating in certain industries where FCA claims are more likely, such as in the health care and life sciences space, to incorporate such assessments into their diligence process for new acquisitions, and to consider carefully their level of involvement in the operations of portfolio companies particularly in these industries.
Regulations, Compliance, & Enforcement
Trending Now
One Part Legal, One Part Behavioral: A Winning Recipe for a More Thoughtful Compliance Program • DOJ Has Agreed Not to Oppose Entry of Judgment On Three Specific Biden-Era Davis-Bacon Act Rules Involving Materialmen, Truckers, and the Application of the Christian Doctrine. • A Decade Later, Escobar Is Still Shaping FCA Cases • Senate Panel Advances NDAA Measure Restricting Defense Contractor Stock Buybacks • AI Is Taking Background Checks from ‘Months to Hours,’ Clearance Agency Says
DOJ Settles Claims with Private Equity Firm over Alleged False Claims Act Violations by Its Portfolio Company
Artur Szczybylo | Shutterstock
Track False Claims Act cases, audit trends, and compliance best practices with our Compliance & Enforcement newsletter, delivering up-to-the-minute intelligence Monday–Saturday — Subscribe here.