Legal Briefs

Analyzing Confessions of Judgment

March 4, 2019
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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
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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
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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
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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
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AG-NY

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
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ponzi scheme

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
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New York Supreme Court

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
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contract

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
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SEC Building

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
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NYC

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 […]

SEC Scoffs at 1st Global Capital’s Attempt to Dismiss Securities Complaint

November 17, 2018
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1st Global Capital Bankruptcy

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
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lawyer going to the courthouse

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
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Courtroom

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 […]

Capital Stack Hit With Class Action Lawsuit

October 10, 2018
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class action lawsuit

A class action lawsuit brought by former employees of Capital Stack, LLC was filed in federal court on Tuesday for damages resulting from alleged labor law violations. David Rubin, Brian Stulman, eProdigy ACH, LLC, and eProdigy Operations, LLC are also among the named defendants. Capital Stack is a merchant cash advance company based in New […]

Renaud Laplanche Barred From the Securities Industry

September 28, 2018
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LendIt USA 2016

Renaud Laplanche, 1 month before he resigned from LendingClub at the LendIt USA 2016 conference in San Francisco, California, USA on April 11, 2016. (photo by Gabe Palacio) The SEC announced today that it charged LendingClub Asset Management, formerly known as LendingClub Advisors LLC (LCA), and its former president and co-founder Renaud Laplanche, with fraud […]

War on Debt Settlement Continues: 16 Defendants Sued in RICO Case

September 6, 2018
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war

Fourteen individuals and two companies (including Decision One Debt Relief) were sued by Funding Metrics in Federal court last month for allegedly “conducting a nationwide illegal debt restructuring scheme through numerous acts of mail and wire fraud.” The suit, which stems from the defendants’ interference with Funding Metrics’ merchant cash advance customers, makes six claims, […]

1 Global Capital Charged With Fraud by SEC

August 29, 2018
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SEC Building

Securities & Exchange Commission building The Securities & Exchange Commission unsealed a 10-count complaint against 1 Global Capital LLC (“1st Global Capital”), its owner Carl Ruderman, and related parties on Wednesday. The South Florida firm “fraudulently raised more than $287 million from more than 3,400 investors to fund its business offering short-term financing to small […]

MCA Companies Have Won a “Sh*t Ton” of Cases, Judge Declares

August 27, 2018
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welcome to buffalo

A judge in Buffalo, New York has finally had enough with merchants trying to claim that merchant cash advances are loans. At issue were defendants who sought to overturn a confession of judgment filed by SOS Capital. The Honorable Catherine Nugent Panepinto, who presided over the case, didn’t like that one bit, but what was […]

Two Commercial Finance Consultants Charged By SEC in Ponzi Scheme

August 22, 2018
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SEC Building

Two commercial finance consultants were charged by the SEC earlier this week for their alleged role in soliciting investors to place their savings into mortgage-backed securities issued by Woodbridge Group of Companies, LLC, a company revealed to be a $1.2 billion ponzi scheme. Barry Kornfeld and Ferne Kornfeld of Parkland, Florida, allegedly earned $3.7 million […]

Merchant Cash Advance Company Wins in Bankruptcy Court After Judge Rules It’s an Ordinary Part of Business

August 21, 2018
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bankruptcy court

Last week, a bankruptcy judge in the Northern District of Illinois ruled that a merchant had used so many merchant cash advances that it had become a normal part of their business. At issue was Network Salon Services, a business founded in 2004 that was brought back from the brink of insolvency in January 2013 […]