U.S. law provides an incentive for employees who see their companies taking illegal actions that violate the law, pose a risk to health or safety, or cost the government tax revenue to inform the authorities of these actions.
The law provides whistleblowers with protection from harassment, threats, or other punitive actions from their employer. What’s more, whistleblowers whose actions save the government money can also receive a share of the revenue collected.
However, it is not uncommon for employees to use the statute strategically as a way to protect themselves from prosecution or punishment when they themselves have done something illegal or unethical. And when such a thing occurs, it can be difficult for the courts to distinguish between nefarious behavior and bona fide whistleblowing.
If it is difficult for the courts to disentangle, it is even more so for investors. But sometimes there are clues that a whistleblower lawsuit may be a ruse, and the travails of the health technology company CareDx with one such lawsuit illustrates the problem.
CareDx is a precision medicine company that develops and commercializes testing products for organ transplant patients. Michael Olymbios was its head of community nephrology. That position was senior enough so as to afford him access to a wealth of confidential and proprietary business information.
In 2020 he told the company he was resigning to join a financial services firm that had no connections to the industry. The company...
(The Lion) — A Senate Democrat has proposed a bill to repeal the federal Education Freedom Tax Credit, which passed in President Donald Trump’s budget bill last year. Sen. Mark Kelly, D-Arizona, m...