Tag Archives: Company Legal & Law Matters

FTX advisor and Alameda CEO Caroline Ellison gets two years in prison

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A US district court judge sentenced Caroline Ellison, the former advisor and ex-girlfriend to the convicted crypto fraudster and FTX founder Sam Bankman-Fried, to two years in prison.

The New York Times reported Ellison’s sentence for her role in the $8 billion in fraud committed by the FTX crypto exchange that sent Bankman-Fried to federal prison for 25 years back in March. Ellison will also have to serve three years of supervised release once she’s finished her prison sentence.

Ellison pled guilty at the end of 2022 to seven counts of fraud just as Bankman-Fried was being extradited to the US from the Bahamas. US Securities and Exchange Commission (SEC) Director of Enforcement Sanjay Wadhwa said following Ellison’s plea that she and Wang “were active participants in a scheme to conceal material information from FTX investors.”

Ellison was also the former chief executive officer of FTX’s sister company Alameda Research. Prosecutors said she diverted FTX customers’ funds onto Alameda’s books to hide risks from their clients. Ellison testified against Bankman-Fried, making her a key witness in his criminal fraud trial.

Prosecutors also got Bankman-Friend’s house arrest and bail revoked when a judge determined the FTX founder tried to hinder Ellison’s testimony last year. Bankman-Fried tried to message FTX’s general counsel on Signal and email in 2023 to influence Ellison’s testimony who was only identified as “Witness-1.”

Nine months later, Bankman-Fried showed a New York Times reporter personal writings from Ellison that prosecutors said were an attempt to damage her reputation especially amongst prospective jurors. The judge agreed both instances merited Bankman-Fried’s arrest and jailing while he awaited trial. Bankman-Fried is currently serving his 25-year sentence in a federal prison in Brooklyn awaiting appeal for his conviction.

Ellison issued a statement before her sentence apologizing for her crimes to the people she and her former firm defrauded. Prosecutors did not issue a recommended sentence and characterized her cooperation with investigators as “exemplary” in a memo to the judge.

“Not a day goes by that I don’t think of the people I hurt,” Ellison said in court. “I am deeply ashamed of what I have done.”

This article originally appeared on Engadget at https://www.engadget.com/big-tech/ftx-advisor-and-alameda-ceo-caroline-ellison-gets-two-years-in-prison-214828333.html?src=rss

FTX advisor and Alameda CEO Caroline Ellison gets two years in prison

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A US district court judge sentenced Caroline Ellison, the former advisor and ex-girlfriend to the convicted crypto fraudster and FTX founder Sam Bankman-Fried, to two years in prison.

The New York Times reported Ellison’s sentence for her role in the $8 billion in fraud committed by the FTX crypto exchange that sent Bankman-Fried to federal prison for 25 years back in March. Ellison will also have to serve three years of supervised release once she’s finished her prison sentence.

Ellison pled guilty at the end of 2022 to seven counts of fraud just as Bankman-Fried was being extradited to the US from the Bahamas. US Securities and Exchange Commission (SEC) Director of Enforcement Sanjay Wadhwa said following Ellison’s plea that she and Wang “were active participants in a scheme to conceal material information from FTX investors.”

Ellison was also the former chief executive officer of FTX’s sister company Alameda Research. Prosecutors said she diverted FTX customers’ funds onto Alameda’s books to hide risks from their clients. Ellison testified against Bankman-Fried, making her a key witness in his criminal fraud trial.

Prosecutors also got Bankman-Friend’s house arrest and bail revoked when a judge determined the FTX founder tried to hinder Ellison’s testimony last year. Bankman-Fried tried to message FTX’s general counsel on Signal and email in 2023 to influence Ellison’s testimony who was only identified as “Witness-1.”

Nine months later, Bankman-Fried showed a New York Times reporter personal writings from Ellison that prosecutors said were an attempt to damage her reputation especially amongst prospective jurors. The judge agreed both instances merited Bankman-Fried’s arrest and jailing while he awaited trial. Bankman-Fried is currently serving his 25-year sentence in a federal prison in Brooklyn awaiting appeal for his conviction.

Ellison issued a statement before her sentence apologizing for her crimes to the people she and her former firm defrauded. Prosecutors did not issue a recommended sentence and characterized her cooperation with investigators as “exemplary” in a memo to the judge.

“Not a day goes by that I don’t think of the people I hurt,” Ellison said in court. “I am deeply ashamed of what I have done.”

This article originally appeared on Engadget at https://www.engadget.com/big-tech/ftx-advisor-and-alameda-ceo-caroline-ellison-gets-two-years-in-prison-214828333.html?src=rss

Visa slapped with a DOJ antitrust lawsuit

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The Department of Justice (DOJ) filed an antitrust lawsuit against Visa. The lawsuit alleges that the financial firm holds a monopoly over debit network markets allowing it to charge banks and markets with exorbitant fees that get passed onto consumers and keep rival companies like PayPal and Square from competing on their level.

Bloomberg first reported on Monday that the DOJ planned to file an antitrust suit against Visa following a multiyear investigation into Visa’s business practices starting in 2020. Visa attempted to acquire the fintech startup Plaid with a $5.3 billion bid but the DOJ filed a lawsuit blocking the deal claiming the acquisition would eliminate a competitive threat that challenged Visa’s powerful control of debit markets.

Visa dropped the bid a year later to avoid any further legal entanglements but the DOJ continued investigating Visa’s business practices.

The DOJ alleges in its latest lawsuit that Visa’s “web of exclusionary agreements” with banks and businesses helped strengthen its market dominance and “smother” any potential competitors. Attorney General Merrick Garland said in a statement that Visa “unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.

“Merchants and banks pass along those costs to customers, either by raising prices or reducing quality or service,” the statement reads. “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of nearly everything.”

Visa's General Counsel Julie Rottenberg told Engadget in an emailed statement that the DOJ's lawsuit is "meritless" and that they plan to vigorously defend themselves in court. 

"Today's lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving," Rottenberg said by email. "When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide. We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable."

This article originally appeared on Engadget at https://www.engadget.com/big-tech/visa-slapped-with-a-doj-antitrust-lawsuit-204710873.html?src=rss

Visa slapped with a DOJ antitrust lawsuit

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The Department of Justice (DOJ) filed an antitrust lawsuit against Visa. The lawsuit alleges that the financial firm holds a monopoly over debit network markets allowing it to charge banks and markets with exorbitant fees that get passed onto consumers and keep rival companies like PayPal and Square from competing on their level.

Bloomberg first reported on Monday that the DOJ planned to file an antitrust suit against Visa following a multiyear investigation into Visa’s business practices starting in 2020. Visa attempted to acquire the fintech startup Plaid with a $5.3 billion bid but the DOJ filed a lawsuit blocking the deal claiming the acquisition would eliminate a competitive threat that challenged Visa’s powerful control of debit markets.

Visa dropped the bid a year later to avoid any further legal entanglements but the DOJ continued investigating Visa’s business practices.

The DOJ alleges in its latest lawsuit that Visa’s “web of exclusionary agreements” with banks and businesses helped strengthen its market dominance and “smother” any potential competitors. Attorney General Merrick Garland said in a statement that Visa “unlawfully amassed the power to extract fees that far exceed what it could charge in a competitive market.

“Merchants and banks pass along those costs to customers, either by raising prices or reducing quality or service,” the statement reads. “As a result, Visa’s unlawful conduct affects not just the price of one thing — but the price of nearly everything.”

Visa's General Counsel Julie Rottenberg told Engadget in an emailed statement that the DOJ's lawsuit is "meritless" and that they plan to vigorously defend themselves in court. 

"Today's lawsuit ignores the reality that Visa is just one of many competitors in a debit space that is growing, with entrants who are thriving," Rottenberg said by email. "When businesses and consumers choose Visa, it is because of our secure and reliable network, world-class fraud protection, and the value we provide. We are proud of the payments network we have built, the innovation we advance, and the economic opportunity we enable."

This article originally appeared on Engadget at https://www.engadget.com/big-tech/visa-slapped-with-a-doj-antitrust-lawsuit-204710873.html?src=rss

X is reportedly now complying with orders from Brazil’s Supreme Court

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X is reportedly reversing course after weeks of refusing to comply with conditions set by the Brazilian Supreme Court that would allow it to operate in the country again. According to The New York Times, the company’s lawyers said in a Friday court filing that X has named a legal representative in Brazil as demanded by justice Alexandre de Moraes and removed accounts that the judge had identified as a threat to democracy, along with paying the fines it owed. But, the publication also reports that the Brazil Supreme Court has said X did not submit all the necessary paperwork, and now has five days to do so.

The paperwork X failed to submit is that which would prove it formally appointed a legal representative in Brazil, as required by Brazilian law, according to Reuters. X named Rachel de Oliveira Conceicao as its new legal representative in the filing on Friday. The company has been working to restore service to users in Brazil after it was blocked at the end of August, and briefly came back online earlier this week using Cloudflare’s DNS. But, it said that this was “inadvertent and temporary.” In a statement, an X spokesperson said at the time, “While we expect the platform to be inaccessible again in Brazil soon, we continue efforts to work with the Brazilian government to return very soon for the people of Brazil.”

Brazil has threatened X and Starlink with daily fines of nearly $1 million if they do not comply with the ban in the country. Justice Moraes also made it so users in Brazil could be fined roughly $8,900 if caught using a VPN to access X. The company’s latest move is a step toward resolving the issue and potentially bringing X back to Brazil legally.

This article originally appeared on Engadget at https://www.engadget.com/social-media/x-is-reportedly-now-complying-with-orders-from-brazils-supreme-court-170651920.html?src=rss

Nintendo and The Pokémon Company are suing Palworld creator Pocketpair

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Nintendo and The Pokémon Company have filed a patent infringement lawsuit against Pocketpair in Tokyo. Pocketpair is the Japanese video game developer behind Palworld, a game people have been describing as a Pokémon parody, featuring cute gun-toting monsters. The game, released in Early Access form on January 18, was an instant hit, selling 15 million copies on Steam and crossing 25 million players within just a month. 

The Pokémon Company said a few days after Palworld came out that it was going to investigate a game "released in January 2024" and will "take appropriate measures to address any acts that infringe on intellectual property rights related to Pokémon." Looks like the investigation is over, and it has decided to take legal action. 

"This lawsuit seeks an injunction against infringement and compensation for damages on the grounds that Palworld, a game developed and released by the Defendant, infringes multiple patent rights," Nintendo said in its announcement of the lawsuit. 

Pocketpair previously said that its game is more like Ark Survival Evolved and Valheim than Pokémon. Company CEO Takuro Mizobe claimed that Palworld "cleared legal reviews" and that no lawsuits were filed against Pocketpair regarding its development. While Palworld's monsters would look familiar to Pokémon fans, it takes on a darker tone. You can choose to play as a friend to the monsters known as "Pals" and fight off the poachers trying to kill them. But you can also kill and eat Pals, make them fight to the death and even sell them into slavery.

Shortly after Nintendo announced its lawsuit, Pocketpair responded. "At this moment, we are unaware of the specific patents we are accused of infringing upon, and we have not been notified of such details," the company wrote. "It is truly unfortunate that we will be forced to allocate significant time to matters unrelated to game development due to this lawsuit. However, we will do our utmost for our fans, and to ensure that indie game developers are not hindered or discouraged from pursuing their creative ideas."

Update, September 19 2024, 9:40AM ET: This story has been updated with Pocketpair's response to Nintendo's lawsuit.

This article originally appeared on Engadget at https://www.engadget.com/gaming/nintendo/nintendo-and-the-pokemon-company-are-suing-palworld-creator-pocketpair-031320550.html?src=rss

Report: Google offered to sell AdX to end EU antitrust suit

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In an effort to quell monopoly concerns in the EU, Google reportedly offered to sell its AdX advertising marketplace. Sources told Reuters that European publishers rejected Google's offer, arguing that the company would have to divest more in order to dismantle the conflicts of interest in its online advertising operations. Lawyers familiar with the antitrust cases said this was the first time Google had offered to sell off an asset in response to this type of lawsuit.

Despite this alleged sale offer, Google is publicly standing firm about its adtech business. "As we have said before, the European Commission's case about our third-party display advertising products rests on flawed interpretations of the ad-tech sector, which is fiercely competitive and rapidly evolving. We remain committed to this business," a Google rep told the publication. We've reached out to Google and will update this story if we receive any additional comment from the company.

Google's control over online advertisements has raised concerns around the globe. Regulators have questioned whether the company's activity in multiple stages of the adtech supply chain allows it to favor its own businesses, creating an unfair advantage that could hurt competition and increase advertising prices.

The European Commission began this push against the company's ad arm last June. The UK's competition watchdog also raised the alarm over a possible Google ad monopoly earlier this month. Google is also currently being sued by the Department of Justice over the same topic in the US.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/report-google-offered-to-sell-adx-to-end-eu-antitrust-suit-203612819.html?src=rss

MrBeast and Amazon are being sued by contestants of their planned competition show

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A lawsuit on behalf of five unnamed contestants who participated in YouTuber MrBeast’s Beast Games was filed on September 16 in Los Angeles against MrBeast as well as Amazon, which plans to distribute the show. It’s also seeking class-action status.

Beast Games is the brainchild of Jimmy Donaldson, also known as MrBeast. This game show had participants go through challenges for a shot at $5 million in cash. There would only be one winner out of 1,000 participants, so the money would only go to the last person standing.

When the five contestants participated in the game show, they each wanted to win the money, but nothing prepared them for the poor conditions, mistreatment and harassment they experienced. Among the 14 complaints are failure to pay minimum wages, sexual harassment, false advertising and failure to provide uninterrupted meal and rest breaks.

The plaintiffs filed this lawsuit on behalf of all Beast Games contestants besides themselves. Much of the lawsuit’s content is hidden, including the contestants’ names and the exact details of their mistreatment. Of note were the female contestants’ experiences. The lawyers claimed that the work environment there “fostered a culture of misogyny and sexism where Production Staff did nothing.”

The contestants were considered employees under California law, but MrBeast and Amazon allegedly misclassified them to obtain a tax credit of around $2 million. They also arrived on set to discover that instead of 1,000 total competitors, there were far more people playing for the prize, thus lowering everyone's chances of coming out a winner. According to the New York Times, the total number of contestants was about 2,000, something MrBeast said was the plan all along. The plaintiffs claimed this significantly reduced anyone’s chances of winning and was considered false advertising. Even worse, the show organizers did not grant them meal and rest breaks as required by California law. According to the lawsuit, some of the show participants developed injuries that “continue to persist and will persist from the future.”

This isn’t the first time MrBeast has been involved in a lawsuit. Last year, he sued Virtual Dining Concepts (VDC) for making subpar MrBeast Burgers, ruining his reputation. VDC countersued MrBeast, seeking $100 million in damages.

According to a report from Variety, MrBeast and Amazon have yet to comment on the lawsuit, with the former refusing to. Beast Games, slated for an Amazon Prime Video release, still has no announced release date.

This article originally appeared on Engadget at https://www.engadget.com/entertainment/streaming/mrbeast-and-amazon-are-being-sued-by-contestants-of-their-planned-competition-show-152613641.html?src=rss

Google wins appeal against $1.7 billion EU fine for ‘abusive’ advertising practices

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The amount of fines Google has to pay in Europe may have become just a bit smaller. It has successfully convinced the European Union's General Court to annul the €1.5 billion ($1.7 billion) penalty levied against it back in 2019 for what the European Commission described as "abusive practices in online advertising." According to the Financial Times, the General Court agreed with the commission's assessment that Google did block rival advertisers from its platform. However, it argued that the commission failed to take into account "all the relevant circumstances" when it assessed how long the company had implemented anti-competitive practices. 

The commission, under competition chief Margrethe Vestager, found back in 2019 that Google had prohibited publishers from placing search adverts from competitors on its search results pages from 2006 until 2009. It changed its rules slightly in 2009, but it wasn't until 2016 that it removed the clause pertaining to the restriction in its contracts. The fine for this particular case was larger than expected, because the commission said it took into account "the duration and gravity of the infringement."

"This case is about a very narrow subset of text-only search ads placed on a limited number of publishers' websites," Google said in a statement to the Financial Times. "We made changes to our contracts in 2016 to remove the relevant provisions, even before the commission’s decision. We are pleased that the court has recognized errors in the original decision and annulled the fine. We will review the full decision closely." Meanwhile, the commission told the publication that it "will carefully study the judgment and reflect on possible next steps." It could still appeal the court's decision.

This is just one of the multiple antitrust fines the European Commission has slapped against Google over the past years. Earlier this month, EU's highest court upheld a different $2.7 billion penalty against the company. The commission imposed that fine on Google back in 2017, because it found that the company, as Vestager explained, "abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors." 

Vestager is stepping down from her role as the European Union's commissioner for competition within the next few weeks. She has been tough on big tech companies throughout her run, and the market abuse cases she has filed over the years led to the creation of the Digital Markets Act (DMA), a regulation meant to prevent the largest players in the industry from abusing their market power.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/google-wins-appeal-against-17-billion-eu-fine-for-abusive-advertising-practices-123006698.html?src=rss

Amazon accused of deceptive ‘sales’ of its own products in lawsuit

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Amazon is facing a class-action lawsuit that accuses the company of misleading pricing practices. The suit alleges that Amazon deceived shoppers by showing inflated list prices for Fire TVs, thus making discounts seem more significant than they actually were.

The lawsuit was filed in the US District Court for the Western District of Washington and claims that the company regularly adopted this practice, calling it a "persistent and uniform scheme." The suit alleges that Amazon created "fake list prices" for its own Fire TVs, making the apparent "discounts" deceptive.

It goes on to accuse the company of tricking its customers into buying Fire TVs by omitting "critical information" concerning the length of the sale and when the list price was actually in use. This allegedly led to Amazon customers spending "more money than they otherwise would have if not for the purported time-limited bargains." The suit claims that "many of the Fire TVs have not been anywhere near the advertised list prices for a year or more."

The lawsuit alleges violations of Washington’s Consumer Protection Act, which bans “unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce.” Plaintiff David Ramirez seeks compensatory and punitive damages, in addition to an injunction to stop Amazon from continuing the alleged practices. The suit seeks compensatory damages "in amounts determined by the court and/or jury" and prejudgment interest on everything awarded. 

The lawsuit references a similar case in California from 2021 in which Amazon was barred from using false or misleading list prices in its advertising. The company also agreed to pay around $2 million in penalties and restitution as part of that settlement. As for this case, it’s still early days. 

An Amazon spokesperson declined to comment when approached by Seattle-based news organization KIRO 7. We reached out to the company for our own comment and will report back when we get a response. 

This article originally appeared on Engadget at https://www.engadget.com/big-tech/amazon-accused-of-deceptive-sales-of-its-own-products-in-lawsuit-193027775.html?src=rss