The U.S. Department of Justice’s (DOJ) Civil Cyber-Fraud Initiative, announced last October, is designed to leverage existing whistleblower incentives for employees, or other persons with inside knowledge, to identify lapses in federal contractors’ cybersecurity and privacy practices. We gave that issue in-depth treatment here, with particular focus on the U.S. District Court for the Eastern District of California’s opinion in United States ex. rel. Markus v. Aerojet Rocketdyne Holdings, Inc., No. 2:15-cv-02245 WBS AC, 2022 WL 297093 (E.D. Cal. Feb. 1, 2022), denying the defendant’s motions for summary judgment on a majority of the relator’s False Claims Act (FCA) claims.
Last month, DOJ announced that Aerojet Rocketdyne Holdings Inc. (Aerojet) “has agreed to pay $9 million to resolve allegations that it violated the False Claims Act by misrepresenting its compliance with cybersecurity requirements in certain federal government contracts.” The relator—Markus, a former cybersecurity professional at Aerojet—will receive $2.61 million as recovery for bringing the qui tam action. Given that the Markus case presents a clear incentive for cybersecurity professionals across the federal supply chain to bring a whistleblower claim, as well as the DOJ’s stated intention of pursuing such claims as a matter of protecting our nation’s cybersecurity, we provide some high-level, practical considerations for contractors to consider.
What Is a Company’s Risk?
The following questions are...
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