November 21, 2019 / 11:20 PM / 19 days ago

False Claims Act applies to banks seeking Fed emergency loans - 2nd Circ

By Nate Raymond A federal appeals court on Thursday revived a whistleblower lawsuit against Wells Fargo & Co after concluding the False Claims Act can be used to sue companies who defraud the Federal Reserve System’s emergency lending facilities.

The 2nd U.S. Circuit Court of Appeals in New York reversed the dismissal of a lawsuit alleging the bank and Wachovia Corp, now owned by Wells Fargo, during the 2008 financial crisis misrepresented their financial condition to obtain emergency loans from Federal Reserve Banks (FRBs).

“Fraud during a national emergency against entities established by the government to address that emergency by lending or spending billions of dollars is precisely the sort of fraud that Congress meant to deter when it enacted the FCA,” U.S. Circuit Judge Robert Katzmann wrote.

To read the full story on WestlawNext Practitioner Insights, click here:

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