Litigation

Startup CEO Pleads Guilty to Defrauding Former Employees

By Camila Piedrahita Abello, J.D. Candidate 2019 | Posted on

Isaac Choi, the founder and CEO of WrkRiot, pleaded guilty to defrauding several former employees. He now faces up to 20 years in prison and a $250,000 fine.

When he pleaded guilty to one count of wire fraud, Choi admitted “he made false and misleading statements about various topics, including his educational and professional history, and the amount of his wealth” in an effort to recruit potential employees. He further admitted to emailing several employees forged documents reflecting salary payments that were never made.

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In a Sale Gone Awry, A Lesson for Other Deal Makers

By Jacqueline Alas, J.D. Candidate 2017 | Posted on

According to Reuters, GFI Group supported brokerage, trading, and clearing services, and traded technologies to global markets. In 2016, the GFI board sold GFI to CME—a global derivative market focused on trading, clearing, and regulation—even though at the end of the bidding war, CME offered a lower bid of $5.85 per share. Meanwhile, the competing buyer, BGC, a global brokerage company, offered $6.10 cash per share. This sale to CME was approved when the board overruled the decision of a committee of independent directors.

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With Profits and Consolidation on The Rise, Will Antitrust Litigation Follow?

By Travis Mitchell, J.D. Candidate 2019 | Posted on

During the 2016 election cycle, much has been made of the economy and how it appears to be rigged against the little guy. Both presidential candidates have been trying to position themselves as the solution for bringing profits back to Main Street and cleaning up “big business.” During the Democratic primaries, Bernie Sanders based his campaign on the very idea that the U.S. needed a political and economic revolution, and recent political superstars, such as Elizabeth Warren, have been ringing the bell of economic reform for the past two years. There is evidence that this is not simply politicians attempting to draw policy distinctions among themselves, but a true reflection of what Americans are feeling. According to the Pew Research Center, the economy is the number one concern among likely voters with 84 percent listing it as “highly likely” to influence their vote in the 2016 election. There is no doubt that much of this is rooted in the belief that the economy is rigged against the average American in favor of large corporations. Recent polling has found that over 70 percent of Americans believe that the economy is rigged in favor of certain groups.

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Legal Battle Between Trader Joe’s and Pirate Joe’s Continues

By Geetika Jerath, J.D. Candidate 2019 | Posted on

Trader Joe’s, a California-based grocery chain, is famous for its eclectic healthy products and its cult following. Pirate Joe’s, a proud knockoff, is notorious for its reselling of Trader Joe’s products in Canada at high prices. Court documents stated that $350,000 worth of Trader Joe’s goods were bought and resold in Pirate Joe’s stores. This was done largely via Pirate Joe’s founder, Michael Hallatt, purchasing or paying others to purchase Trader Joe’s products in Washington and drive them across the border.

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Halliburton-Baker Hughes Merger Hits Antitrust Roadblock

By Alisha Mahalingam, J.D. Candidate 2018 | Posted on

On April 6, 2016, the United States Justice Department announced the filing of an antitrust suit in the U.S. District Court for the District of Delaware to block the proposed merger between Halliburton and Baker Hughes—citing its potential to “eliminate vital competition, skew energy markets and harm American consumers.” Originally brokered in 2014, the $35 billion deal would bring together the second and third largest oil field service firms in the world. Attorney General Loretta Lynch has voiced concerns that this merger of two of the top three firms would serve to create “non-competitive duopolies” in twenty-three separate markets throughout the United States.

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First Lawsuit Regarding Fraudulent Law School Employment Data to Go to Trial

By Thao Thai, J.D. Candidate 2018 | Posted on

In the past few years, law students unable to find employment after graduation sued their alma maters for alleged fraud. The students claimed that their schools defrauded them with misleading employment figures. However, many courts rejected this argument and these cases never made it to trial. A state judge presiding over a case against New York Law School described law students as “a sophisticated subset of education consumers, capable of sifting through data and weighing alternatives.” Many courts in Florida, New York, and Michigan shared this view. Thus, judges generally concluded that law students were sophisticated enough to recognize the uncertainty of legal employment and that they chose a legal education at their own risk.

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In light of Justice Scalia’s Death, Dow Chemicals Settles Instead of Taking Its Chances in Front of the Supreme Court

By Alisha Mahalingam, J.D. Candidate 2018 | Posted on

In a statement released on February 26th, Dow Chemicals announced the $835 million settlement of a pending class-action lawsuit citing “growing political uncertainties due to recent events within the Supreme Court and increased likelihood for unfavorable outcomes for business involved in class action suits.” The suit in question—a class action lawsuit alleging illegal urethane price fixing—has already been decided by a lower court in favor of the plaintiff class with damages totaling $1.06 billion. Prior to settlement, Dow filed a writ of certiorari with the Supreme Court, requesting review of the lower court’s verdict for improper application of class-action lawsuit standards. However, it appears that the passing of Justice Scalia has revised Dow’s risk assessment to the tune of $835 million.

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Your Uber Receipt is About to Change

By Shneur Wolvovsky, J.D. Candidate 2018 | Posted on

Last week, Uber agreed to settle an unlawful-business-practice lawsuit. The terms of the settlement require Uber to pay a total of $28.5 million to some 25 million people. That is $1.14 per person before attorney fees. Windfall. There are many reasons companies will settle suits, not the least of which is to avoid a protracted and expensive litigation process. Lyft, Uber’s key U.S. rival, recently settled a similar suit. This is one in a series of cases surrounding this issue – if it can be called an issue at all.

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Emergency Hearing Set for FanDuel and DraftKings

By Dori Kojima, J.D. Candidate 2016 | Posted on

On Wednesday, November 25th, while many households prepare for the Thanksgiving holiday, New York-based users of fantasy sports companies, FanDuel and DraftKings, will also be awaiting the outcome of an emergency hearing before the New York Supreme Court. The hearing could decide whether the companies receive a preliminary injunction to operate while the illegal gambling cases against them are pending, a process that could take over a year.

The hearing will be the latest match up in the ongoing public legal battle between New York Attorney General Eric Schneiderman and the two largest daily sports fantasy companies. On November 10th, Schneiderman sent “cease-and-desist” orders to FanDuel and DraftKings, instructing the companies to stop accepting illegal bets from New York residents. In response, FanDuel and DraftKings requested relief through a temporary restraining order to stop Schneiderman until the companies could present their cases. The court denied the companies’ requests but set the date for the emergency hearing.

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In The Peak Of A Hedge Fund Asset Crisis, The Supreme Court Might Have Just “Broke The Camel’s Back” For Investor Confidence In Hedge Funds

By Alvaro Pereira, L.L.M. Candidate 2016 | Posted on

The Supreme Court rejected the petition for certiorari in United States v. Newman last month—a case about insider trading. In so doing it reaffirmed the Second Circuit Court of Appeals’ decision, which held that liability for insider trading requires proof of (1) that the discloser received a personal benefit, and (2) that the person receiving the information (“tippee”) knew about that benefit. This position not only troubles prosecutors in current insider trading cases and investigations, but is also likely to intensify the current hedge fund asset crisis by calling the credibility of the whole system into question among investors.

In a jury trial in the Southern District of New York, federal prosecutors presented evidence that Todd Newman and Anthony Chiasson (among others) were involved in insider trading. Pursuant to the evidence, it was found that these hedge fund managers received financial information from insiders about Dell and NVIDIA before that information was made available to the public—allowing them to earn millions of dollars in trades during the 2008 fiscal year. Accordingly, they were convicted in 2013 for conspiracy to commit insider trading.

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