Legal Briefs
Direct Lending Investments Had Over 950 Investors
April 16, 2019Documents filed in a New York Supreme Court case by the receiver managing Direct Lending Investments (DLI), revealed that DLI had more than 950 investors worldwide with collective investments on the books totaling over $780 million. For those wondering what’s happened since word of the hedge fund’s shocking demise, Bradley D. Sharp of Development Specialists, […] |
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Lots of Tech Buzzwords, Scary Problems
April 16, 2019advanced machine-learning, algorithms, big data, streamlined, technology, consumer-friendly A federal regulator cut through the shield of fintech buzzwords on Monday when it announced that a darling of online lending valued at $2 billion, failed to properly handle rudimentary loan practices. The lender is Chicago-based Avant, who reportedly settled with the FTC for $3.85 million. According […] |
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Indicted Loan Brokers Out On Bond, 1 Still in Custody
April 5, 2019Four of the five loan brokers indicted in a fake business loan scam that tricked an Ohio resident out of hundreds of thousands of dollars in upfront fees, have been released on bond. Only one, a defendant by the name of Haki Toplica, remains in custody. All of the defendants have entered pleas of not […] |
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Class Action Lawsuit Filed Against Brendan Ross, Direct Lending Investments, and Others
April 2, 2019A class action lawsuit has been filed in California against Direct Lending Investments, LLC (DLI), Brendan Ross, Bryce Mason, Frank Turner, Rodney Omanoff, and Quarterspot Inc. alleging breach of contract, breaches of fiduciary duty, aiding and abetting breaches of fiduciary duty, and fraudulent inducement. The claims are drawn from a series of revelations that have […] |
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Debt Settlement Mastermind of MCA Industry Finally Caves, Pleads Guilty to Criminal Charges
March 30, 2019
The mastermind that pioneered debt settlement in the merchant cash advance industry ended his career with a whimper last week. Sergiy Bezrukov pled guilty to Conspiracy to Commit Bank Fraud and Conspiracy to Commit Money Laundering. Bezrukov has been in jail for two years awaiting trial, which had been repeatedly postponed because he kept on […]
Direct Lending Investments Charged With Fraud by the SEC
March 25, 2019
Update: DLI has agreed to the appointment of a receiver to marshal and preserve the assets of Direct Lending and the funds. The SEC has also published a press release on the matter. One of the biggest online lending hedge funds has been accused of fraud by the SEC. On Friday, the SEC sued Direct […]
Analyzing Confessions of Judgment
March 4, 2019
Platzer, Swergold, Levine, Goldberg, Katz & Jaslow, LLP (“Platzer”) has built one of the leading Merchant Cash Advance practices in New York City. With years of experience handling traditional lending transactions, Platzer has expanded its representation to Merchant Cash Advance Companies (“MCA”) in all aspects of their business cycles, including Participation Agreements, Assets Utilization, Transactional […]
1 Global Capital Issued Securities, Court Rules
February 17, 2019
1 Global Capital founder Carl Ruderman suffered a major setback in his case with the SEC earlier this month, when the Court ruled that his company’s Syndication Partner Agreements and Memorandums of Indebtedness were in fact, securities. Ruderman had filed a motion to dismiss the SEC’s claims against him personally but the Court struck it […]
Coming Soon: The End of Confession of Judgments (COJs) in New York State
January 16, 2019
New York State plans to outlaw the use of Confession of Judgments (COJs) in small business loan contracts this year, according to details revealed in Governor Andrew Cuomo’s newly published Justice Agenda. The proposal, dubbed “Stopping Predatory Merchant Cash-Advance Loans,” is a 3-part plan to: Codify an FTC rule that prohibits COJs in consumer loans […]
Trial of Debt Settlement Mastermind Sergiy Bezrukov Postponed, Again
January 13, 2019
The trial of debt settlement mastermind Sergiy Bezrukov has been postponed until April 1, 2019, court records indicate. The planned January 14 start date was just the latest in a series of postponements. Bezrukov is charged with conspiracy to defraud, mail fraud, wire fraud, bank fraud, and money laundering. The charges carry a maximum penalty […]
Former Merchant Cash Advance CFO Charged With Fraud by New York Attorney General
January 4, 2019
A former merchant cash advance CFO and executive for a fund that provides capital to merchant cash advance companies, has been charged with fraud by the New York Attorney General. The allegations against Stephen Brown stem from his role as CFO of Cardis Enterprises International, a company that claimed to possess patented and proprietary technology […]
Kornfelds Settle With SEC Over Woodbridge Ponzi Scheme
January 3, 2019
Barry M. Kornfeld and Ferne Kornfeld, both fundraising agents for 1st Global Capital, have settled with the SEC for their role in Woodbridge Group of Companies LLC, a $1.2 billion ponzi scheme. Woodbridge was another Florida-based company that is unrelated to 1st Global Capital. As part of the settlement, the Kornfelds agreed to disgorge $3.69 […]
Defunct MCA Company Tried to Escape Signed Confession of Judgment
December 13, 2018
When a Florida-based merchant cash advance company, World Global Financing (WGF), declared bankruptcy this past May, it entered into a binding settlement agreement with its largest creditor, a hedge fund known as Eaglewood. There was a caveat. Eaglewood required that WGF sign a Confession of Judgment (COJ) as part of the agreement that would afford […]
MCA Participations and Securities Law: Recognizing and Managing a Looming Threat
December 11, 2018
Reprinted with permission from: Pepper Hamilton LLPAuthors: Gregory J. Nowak and Mark T. Dabertin Due to the high volume of relevant judicial decisions issued by New York courts over the past two years, the risk that enforceability of a merchant cash advance (MCA) contract1 might be successfully challenged as a disguised usurious loan has received […]
1st Global Capital Consents With SEC
November 28, 2018
Subject to approval in two courts, 1 Global Capital LLC (aka 1st Global Capital) has confirmed it will consent with the SEC to be permanently enjoined and restrained from violating securities laws. The papers were submitted to the Court yesterday. Though the terms include 1st Global Capital’s California counterpart, 1 West Capital, LLC, there is […]
Who Are the New York City Marshals?
November 28, 2018
In 2017, New York City Marshal Ruth Burko earned less in poundage than she owed the city in annual fees. At 91-years old, Burko’s tenure as a city licensed judgment enforcer has finally come to an end. She technically announced her retirement at the end of 2016 but her long career began when Mayor John […]
1st Global Capital’s Bankruptcy Costs
November 25, 2018
Attorneys have spent 1,9234.20 hours on the 1st Global Capital bankruptcy, a recent fee application reveals. Excluding reimbursements, attorneys at Greenberg Traurig, LLP submitted a bill for $1,028,136.20 over a 3 month period for operating the company as debtors-in-possession. Meanwhile in the SEC case last week, the Court ordered to expand receivership over the Ruderman […]
SEC Scoffs at 1st Global Capital’s Attempt to Dismiss Securities Complaint
November 17, 2018
The SEC is not impressed with 1st Global Capital’s attempt to dismiss the charges it stands accused of. Yesterday, the SEC filed opposition papers, writing “Having defrauded thousands of investors out of almost $300 million, Defendant Carl Ruderman now asks the Court to let him escape the consequences of his actions by dismissing the Amended […]
“Out Of State” MCA Funder Not Precluded From Entering COJs in New York, Court Rules
October 18, 2018
In May 2017, Funding Metrics (FM), a small business funding provider, entered a signed Confession of Judgment (COJ) in Westchester County, NY against a California-based customer. The Court issued a judgment a mere five days later. That should have been the end of it, but on July 26th, the customer hired law firm White & […]
ISO Pretending to be Funder May Be Sent to Jail
October 14, 2018
A New York Supreme Court judge ordered on Thursday that Long Island-based ISO JTT Funding either be fined or sent to prison if it does not comply with a previous restraining order obtained by NYC-based funder Accel Capital. Accel alleges that JTT funding has been impersonating it through correspondence and on contracts, a scheme that […]
