Legal Briefs

Capital Stack Hit With Class Action Lawsuit

October 10, 2018
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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 […]

Financial Advisors Sued For Selling 1 Global Capital Investments

October 2, 2018
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Update: The parties stipulated to a dismissal of the action without prejudice on February 5, 2019. The case is now dismissed. Brothers Anthony and Michael Pellegrino and their firm Goldstone Financial Group have been hit with a class action securities fraud lawsuit relating to their sale of 1 Global Capital investments. According to the plaintiff, […]

Renaud Laplanche Barred From the Securities Industry

September 28, 2018
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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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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, […]

How 1st Global Capital Enticed Investors

August 29, 2018
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Hallandale Beach

1 Global Capital LLC (1st Global Capital) used a network of sales agents, including barred brokers, registered and unregistered investment advisers, to find new people to invest in the company’s merchant cash advance deals, according to an August 23 Securities and Exchange Commission (SEC) complaint unsealed today. The complaint said that through April 2018, 1st […]

1st 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 […]

World Global Financing Bankruptcy Converted to Chapter 7

August 9, 2018
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bankruptcy court

Florida-based World Global Financing (WGF), who filed for Chapter 11 in May, has been ordered into liquidation following their failure to abide by the settlement agreement with Eaglewood SPV I LP. Eaglewood’s claim on WGF comprised 98% of all creditor claims. WGF agreed to settle with Eaglewood for $2.95 million, but WGF failed to make […]

Details Emerge in Florida Lawsuit Against Corporate Debt Advisors

August 9, 2018
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debt cure

A debt settlement company being sued by Itria Ventures in Miami-Dade County, FL was asked to prove its claim that it has managed over $1.5 billion in total debt, court records show. That company, Corporate Debt Advisors (CDA), advertises that it provides debt relief for small business owners. CDA responded to Itria’s request on June […]

Notorious Tampa Bay Loan Broker Likely Headed Back to Jail

July 27, 2018
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Victor Clavizzao

Tampa Bay loan broker Victor Clavizzao pleaded guilty this week to one count of wire fraud, which could land him in prison for up to 20 years. This would not be his first time behind bars. In 2009, a federal judge sentenced him to five years for conspiring to fraudulently obtain nearly $6 million in […]

JTT Funding STILL Impersonating Rival Funding Company, Court Docs Allege

July 26, 2018
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imposter

A Court-ordered injunction hasn’t prevented New York ISO JTT Funding from continuing to pretend to be Accel Capital, a new motion filed in New York County this week argues. In May, JTT Funding failed to appear in court to defend itself against claims it was impersonating Accel Capital when contracting with merchants. After reviewing the […]

Like Bureau of Consumer Financial Protection, Court Declares FHFA Unconstitutional

July 19, 2018
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FHFA Structure

The Bureau of Consumer Financial Protection (Bureau), created largely by Democratic politicians in the wake of the 2008-10 financial crisis, has not been the most popular government agency under the current administration. That said, a June court decision declared that the agency itself is, in fact, not very democratic. The controversial decision came from District […]

California Bill May Disadvantage Small Brokers

July 17, 2018
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limon-cali

A California State Assembly bill that carefully defines what a broker is, could significantly affect small, unlicensed brokers, according to Tom McCurnin, an attorney at Barton, Klugman and Oetting in Los Angeles. Assembly bill 3207 enumerates the ways that the bill would depart from the current law. Most notably, the definition of a broker would […]

How to Avoid Being Sued by a Professional TCPA Plaintiff

July 13, 2018
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Michael O'Hare Blindbid

Michael O’Hare, CEO, Blindbid Did you know that if you receive an unwanted solicitation call on your private cell phone or residential landline, you can win between $500 and $1,500 in damages from the offending company? The company can be charged for violating a statute of the 1991 Telephone Consumer Protection Act (TCPA), which prohibits […]

MCA Funder Says Debt Settlement Company Operating Illegally Without a Budget Planning License

July 11, 2018
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lawsuit over money

Merchant Cash Advance companies are on the warpath against debt settlement companies. In the latest legal offensive, High Speed Capital alleges that Corporate Debt Advisors’ debt settlement business is really just an unlicensed Budget Planning operation, a misdemeanor criminal offense in New York. High Speed’s petition cites New York General Business Law § 455. “So-called […]

Usury Argument in Merchant Cash Advance Suit Backfires Horribly

June 25, 2018
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tcpa law

A New York Supreme Court judge in Erie County, New York has had enough with attorneys trying to argue that merchant cash advances are loans. In Yellowstone Capital, LLC v. Central USA Wireless, LLC et al (Index No: 811837-2017), the Honorable Timothy J. Walker balked at the defendants’ argument that the MCA agreement was usurious. […]

Lawyers Weigh in on Federal Decision That CFPB is Unconstitutional

June 22, 2018
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attorneys weigh in on CFPB ruling

In light of a federal court ruling yesterday that the structure of the Consumer Financial Protection Bureau (CFPB) is unconstitutional, deBanked spoke with some lawyers to get their perspective on what this decision could mean. Alan Kaplinsky, Partner, Ballard Spahr Alan Kaplinsky, Partner, Ballard Spahr “I think it will sow more confusion related to the […]

Stacking Lawsuit Results in Settlement Before Trial

June 19, 2018
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lawyer going to the courthouse

A lawsuit between RapidAdvance and Pearl Capital over tortious interference will not be going to trial after all, deBanked has learned. Originally scheduled to begin on June 25th, the parties have reportedly reached a settlement. Neither party would respond for comment. RapidAdvance filed its lawsuit against Pearl in November 2015 with the hope that they […]