Class Action Against Merchant Cash Advance Company FailsMay 30, 2016 | By: Sean Murray
A lawsuit filed against a Fintech company last October had a familiar ring to it, predatory lending. In the Philadelphia Court of Common Pleas, plaintiff Korea Week Inc. sought to make their case against defendant H Capital a class action.
The suit, which listed seventeen causes of action, raised eyebrows initially because of who the plaintiff’s attorney was. Robert Neil Wilkey, the lead counsel for Korea Week, had just been reinstated to practice law after a long suspension following a conviction for identity theft. In 2010, Wilkey pled guilty to the allegations of stealing the identity of a law client to obtain a credit card. Just a year prior to that, Wilkey was diagnosed as a pathological gambler and was seeking professional treatment while also maintaining an active membership with Gamber’s Anonymous. After his conviction he was suspended from practicing law, but was reinstated on July 7th, 2015. Less than four months after that, he filed a chilling lawsuit against H Capital, several employees and other companies believed to have been involved in a predatory lending scheme.
The case was moved to federal court, whereby additional plaintiffs and defendants were introduced. Among the new claims were that defendants were Racketeer Influenced Corrupt Organizations, an allegation that was also made against Lending Club just a month earlier.
On February 22nd of this year, ex-convict Wilkey withdrew as counsel from plaintiff’s legal team.
In April, the judge dismissed the majority of the claims with prejudice.
Earlier this month, one of the plaintiffs withdrew after being unwilling to participate in discovery.
On May 27th, the judge denied Class Action certification because each named class representative had waived its right to participate in a class action in exchange for business financing. The Judge’s memorandum of law on the matter can be downloaded here.
The case number is 2:15-cv-06351-MAKLast modified: May 30, 2016
Sean Murray is the founder of deBanked, a 10-year veteran of the merchant cash advance industry, a casual Lending Club and Prosper investor, the co-founder of Daily Funder, an alternative lending speaker, consultant, writer, and enthusiast. Connect with me on LinkedIn or follow me on twitter.