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NEW YORK (January 4, 2024) - Freedman Normand Friedland LLP, a preeminent litigation boutique with offices in New York, Miami, and Boston, is pleased to announce the promotion of Richard Cipolla to partner. 
&ldquo;Richard is an exceptional leader whose dedication, expertise, and commitment to excellence have significantly contributed to the firm&rsquo;s success &ndash; we are thrilled to have him join the partnership,&rdquo; said Ted Normand. &nbsp;&nbsp;
Richard leverages his background in technology and big data analytics to seek efficient and effective solutions when representing his clients.&nbsp;He will continue to serve his clients in their most difficult complex commercial disputes. 
About Freedman Normand Friedland
Freedman Normand Friedland is a leading litigation boutique based in Miami, New York, and Boston, specializing in complex commercial litigation, class actions, and other high-value disputes. Our team of experienced lawyers is dedicated to providing the highest level of service to our clients, helping them achieve their goals and succeed in today&rsquo;s complex legal environment.
<a href="https://www.prnewswire.com/news-releases/freedman-normand-friedland-announces-partner-promotion-for-2024-302026485.html?tc=eml_cleartime" target="_blank" rel="noopener">PR Newswire Release</a>

NEW YORK (January 4, 2024) - Freedman Normand Friedland LLP, a preeminent litigation boutique with offices in New York, Miami, and Boston, is pleased to announce the promotion of Richard Cipolla to partner. 
 
"Richard is an exceptional leader ...

Freedman Normand Friedland Announces Partner Promotion for 2024

Second Circuit skeptical of ‘infinite’ arbitration clause for food delivery apps

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<div id="article-body">Law360 (August 14, 2023, 7:09 PM EDT) -- Former students accusing top private universities of conspiring to limit financial aid asked an Illinois federal judge Monday to sign off on the $13.5 million deal they reached with the University of Chicago, the first institution to settle out of the proposed antitrust class action. Following on the heels of their&nbsp;<a href="https://www.law360.com/articles/1599218">"agreement in principle"</a>&nbsp;in April, the former students told U.S. District Judge Matthew F. Kennelly that the University of Chicago has agreed to pay $13.5 million to bow out of their lawsuit, according to the&nbsp;<a href="https://assets.law360news.com/1710000/1710849/show_temp%20-%202023-08-14t134812.421.pdf">motion</a>&nbsp;for preliminary approval of the partial settlement. Sixteen other institutions still face allegations that they flaunted an exemption from antitrust liability for coordinating only "need-blind" admissions and financial aid, when they in fact clearly favored wealthy applicants. "Plaintiffs have reasonably concluded that the proposed cash settlement was in the best interests of the settlement class, among other reasons because, if finally approved, the settlement would assure the settlement class of a significant cash recovery without diminishing the joint and several liability of the remaining sixteen defendants," the motion states. Under the settlement agreement, the students said they will also benefit from additional information from the University of Chicago that they believe will help them better understand the alleged conspiracy. "Notably, UChicago is a relatively small undergraduate institution, nearly unique among the defendants for being located in the city in which the case is pending," the motion states. "And UChicago appears to have stopped participating in the alleged cartel about eight years before the case was filed, and to have done so because the cartel was limiting its ability to compete on price." The suit, which has been&nbsp;<a href="https://www.law360.com/articles/1588687">rife with discovery disputes</a>, was filed in early 2022 and accuses a host of private universities of working together to remove financial aid as a point of competition between them, resulting in the total price of attendance being essentially fixed for around 170,000 students over 20 years. The suit names Brown University,&nbsp;<a href="https://www.law360.com/companies/california-institute-of-technology">California Institute of Technology</a>, Columbia University,&nbsp;<a href="https://www.law360.com/companies/cornell-university">Cornell University</a>, Dartmouth College, Duke University, Emory University,&nbsp;<a href="https://www.law360.com/companies/georgetown-university">Georgetown University</a>,&nbsp;<a href="https://www.law360.com/companies/massachusetts-institute-of-technology">Massachusetts Institute of Technology</a>, Northwestern University, University of Chicago, University of Notre Dame, University of Pennsylvania, Vanderbilt University, Rice University and&nbsp;<a href="https://www.law360.com/companies/yale-university">Yale University</a>. An amended complaint in February 2022 added&nbsp;<a href="https://www.law360.com/companies/johns-hopkins-university">Johns Hopkins University</a>. At the center of the case and much of the overlapping discovery disputes is Section 568 of the Improving America's Schools Act of 1994, which conveys antitrust immunity for schools coordinating admissions, provided all students are admitted on a "need-blind basis" without considering finances. The former students said the schools formed a price-fixing cartel with a 568 Presidents Group, under which they agreed to implement a common approach to evaluating an applicant's ability to pay for school and for using that calculation when making admission decisions. The students contended the schools have already all but admitted liability in public admissions that the 568 group was meant to reduce differences in prices and maximize how much families could afford to pay, making the case now "largely about damages." Judge Kennelly last August rejected assertions of immunity in a decision&nbsp;<a href="https://www.law360.com/articles/1521075">refusing to dismiss</a>&nbsp;the suit, although at least some of the schools continue to assert an&nbsp;<a href="https://www.law360.com/articles/1574343">immunity defense</a>, while several have sworn off that defense. According to Monday's motion for preliminary approval of the UChicago deal, all members of the settlement class who timely submit claims will receive payments from the net settlement fund in proportion to the damages they allegedly suffered, according to the motion. Class counsel intends to seek no more than $4.5 million, or one-third of the gross settlement fund, in attorney fees and litigation costs, as well as $5,000 for each of the eight class representatives, the motion states. The proposed settlement class is defined as, "All U.S. citizens or permanent residents who have during the class period (a) enrolled in one or more of defendants' full-time undergraduate programs, and (b) received at least some need-based financial aid from one ore more defendants, and (c) directly purchased from one or more defendants tuition, fees, room or board that was not fully covered by the combination of any types of financial aid or merit aid (not including loans) in any undergraduate year," according to the motion. The class period for UChicago, Columbia, Cornell, Duke, Georgetown, MIT, Northwestern, Notre Dame, Penn, Rice, Vanderbilt and Yale is from 2003 through the date of preliminary approval, while the class period for Brown, Dartmouth and Emory is from 2004 through the date of preliminary approval, the motion states. For the CalTech, the class period is from 2019 through the date of preliminary approval and for Johns Hopkins, it's from 2021 through the date of preliminary approval, according to the motion. The students said the settlement class here includes about 200,000 members. "The $13.5 million is a significant sum &mdash; it will help to compensate plaintiffs for their injuries, to deter the misconduct that plaintiffs have alleged, and to enable further compensation from the remaining defendants for the alleged injury to their alumni and current students," Edward Normand of&nbsp;<a href="https://www.law360.com/firms/freedman-normand">Freedman Normand Friedland LLP</a>, an attorney for the students, said in a statement Monday. Robert D. Gilbert of&nbsp;<a href="https://www.law360.com/firms/gilbert-litigators">Gilbert Litigators &amp; Counselors PC</a>, another attorney for the students, added, "The defendants' colossal endowments have grown to surpass $230 billion. Surely the defendants can and should give larger scholarships to their incoming middle class and working class students, and compete for their attendance." "Reducing student debt and providing substantially more funds for scholarships will be good for our country," Gilbert said. "It is the right thing to do." In a statement to Law360 on Monday, UChicago said it "is committed to removing financial barriers for undergraduate students who are admitted to the college and is proud of the extensive financial aid we offer to students." The university said it believes the students' claims "are without merit," but that it looks "forward to putting this matter behind us and continuing to focus our efforts on expanding access to a transformative undergraduate education." The students are represented by Robert D. Gilbert, Elpidio Villarreal, Robert S. Raymar and Steven Magnusson of Gilbert Litigators &amp; Counselors PC, Eric L. Cramer, Caitlin G. Coslett, Daniel J. Walker, Robert E. Litan and Hope E. Brinn of&nbsp;<a href="https://www.law360.com/firms/berger-montague">Berger Montague</a>, and Edward Normand, Devin Freedman, Peter Bach-y-Rita and Richard Cipolla of Freedman Normand Friedland LLP. The University of Chicago is represented by James L. Cooper, Leah J. Harrell, Michael A. Rubin, Thomas La Voy and Valarie Hays of&nbsp;<a href="https://www.law360.com/firms/arnold-porter">Arnold &amp; Porter</a>. Brown is represented by&nbsp;<a href="https://www.law360.com/firms/morgan-lewis">Morgan Lewis &amp; Bockius LLP</a>. CalTech is represented by&nbsp;<a href="https://www.law360.com/firms/cooley-llp">Cooley LLP</a>. Columbia is represented by&nbsp;<a href="https://www.law360.com/firms/skadden-arps">Skadden Arps Slate Meagher &amp; Flom LLP</a>. Cornell and Rice are represented by&nbsp;<a href="https://www.law360.com/firms/king-spalding">King &amp; Spalding LLP</a>. Dartmouth is represented by&nbsp;<a href="https://www.law360.com/firms/jenner-block">Jenner &amp; Block LLP</a>. Duke is represented by&nbsp;<a href="https://www.law360.com/firms/gibson-dunn">Gibson Dunn &amp; Crutcher LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/saul-ewing">Saul Ewing LLP</a>. Emory is represented by&nbsp;<a href="https://www.law360.com/firms/jones-day">Jones Day</a>. Georgetown is represented by&nbsp;<a href="https://www.law360.com/firms/mayer-brown">Mayer Brown LLP</a>. Johns Hopkins is represented by&nbsp;<a href="https://www.law360.com/firms/ropes-gray">Ropes &amp; Gray LLP</a>. MIT is represented by&nbsp;<a href="https://www.law360.com/firms/freshfields">Freshfields Bruckhaus Deringer LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/goldman-ismail">Goldman Ismail Tomaselli Brennan &amp; Baum LLP</a>. Northwestern is represented by&nbsp;<a href="https://www.law360.com/firms/sidley-austin">Sidley Austin LLP</a>. Notre Dame is represented by&nbsp;<a href="https://www.law360.com/firms/williams-connolly">Williams &amp; Connolly LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/michael-best">Michael Best &amp; Friedrich LLP</a>. The University of Pennsylvania is represented by&nbsp;<a href="https://www.law360.com/firms/wilmerhale">WilmerHale</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/miller-shakman">Miller Shakman Levine &amp; Feldman LLP</a>. Vanderbilt is represented by&nbsp;<a href="https://www.law360.com/firms/white-case">White &amp; Case LLP</a>. Yale is represented by&nbsp;<a href="https://www.law360.com/firms/hogan-lovells">Hogan Lovells</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/armstrong-teasdale">Armstrong Teasdale LLP</a>. The case is Sia Henry et al. v. Brown University et al., case number&nbsp;<a href="https://www.law360.com/cases/61dc444552a215040114a4ac">1:22-cv-00125</a>, in the&nbsp;<a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-illinois">U.S. District Court for the Northern District of Illinois</a>. --Additional reporting by Bryan Koenig and Nadia Dreid. Editing by Lakshna Mehta.</div>

By Lauren Berg &middot;  
Law360 (August 14, 2023, 7:09 PM EDT) -- Former students accusing top private universities of conspiring to limit financial aid asked an Illinois federal judge Monday to sign off on the $13.5 million deal they...

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MIAMI&nbsp;and&nbsp;NEW YORK&nbsp;and&nbsp;BOSTON,&nbsp;Feb. 8, 2023&nbsp;/PRNewswire/ -- Freedman&nbsp;Normand Friedland&nbsp;is proud to announce the promotion of&nbsp;Colleen Smeryage&nbsp;to Partner. With over a decade of experience in the legal industry, Colleen has established a reputation for her exceptional legal skills and commitment to her clients.
"We are thrilled to have Colleen join our team of partners at Freedman&nbsp;Normand Friedland," said&nbsp;Vel Freedman, founding partner of the firm. "Colleen has consistently demonstrated her expertise in the field, and her tireless work ethic and dedication to our clients have earned her the respect of everyone at the firm."
At Freedman&nbsp;Normand Friedland, Colleen will continue to serve her clients in their most difficult complex commercial litigation cases.
About Freedman&nbsp;Normand Friedland
Freedman&nbsp;Normand Friedland&nbsp;is a leading litigation boutique based in&nbsp;Miami,&nbsp;New York, and&nbsp;Boston, specializing complex commercial litigation, class actions, and other high value disputes. Our team of experienced lawyers is dedicated to providing the highest level of service to our clients, helping them to achieve their goals and succeed in today's complex legal environment.
CONTACT:&nbsp;Vel Freedman,&nbsp;<a href="mailto:vel@fnf.law" target="_blank" rel="nofollow noopener">vel@fnf.law</a>
SOURCE Freedman Normand Friedland LLP
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MIAMI and NEW YORK and BOSTON, Feb. 8, 2023 /PRNewswire/ -- Freedman Normand Friedland is proud to announce the promotion of Colleen Smeryage to Partner. With over a decade of experience in the l...

Freedman Normand Friedland Announces Partnership Promotion for 2023

NEW YORK,&nbsp;Feb. 8, 2023&nbsp;/PRNewswire/ -- Freedman Normand Friedland LLP, a preeminent litigation boutique firm with offices in&nbsp;New York,&nbsp;Miami, and&nbsp;Boston, is pleased to announce that&nbsp;Richard A. Lafont&nbsp;and&nbsp;Katie Friel&nbsp;have joined our&nbsp;New York&nbsp;office.&nbsp;
Richard A. Lafont&nbsp;will be joining the firm as Counsel. Mr. Lafont is a general commercial litigator with vast experience handling banking, real estate, and, generally, complex commercial disputes. Mr. Lafont represents clients in federal and state, trial and appellate courts as well as various arbitral forums. Mr. Lafont graduated from&nbsp;Harvard University&nbsp;in 1986 and the&nbsp;University of Pennsylvania&nbsp;Law School in 1990, where he was an Editor for the Journal of International Business Law.
Katie Friel&nbsp;will be joining the firm as an associate in the firm's&nbsp;New York&nbsp;office. Katie is coming off a Fellowship in the Brennan Center's Democracy Program, where she focused on voting rights and elections. Katie earned her JD from Columbia Law School as a Hamilton Fellow, where she served as Vice President of the ACLU student organization on campus, a Staff Editor for the Columbia Journal of Law and Social Problems, and a Research Assistant for Professor&nbsp;Richard Briffault. While in law school, Friel interned with the U.S. Attorney's Office for the Southern District of&nbsp;New York, United States District Judge&nbsp;Jesse Furman&nbsp;in the Southern District of&nbsp;New York, and the ACLU Voting Rights Project.
"We're excited to welcome both Rich and Katie to our firm," said&nbsp;Amos Friedland. "They are brilliant lawyers that will add tremendous value to our practice and provide great service to our clients."
About Freedman&nbsp;Normand Friedland
Freedman&nbsp;Normand Friedland&nbsp;(<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3778896-1&amp;h=1009769214&amp;u=https%3A%2F%2Fwww.fnf.law%2F&amp;a=www.fnf.law" target="_blank" rel="nofollow noopener">www.fnf.law</a>) is a premier litigation boutique founded in 2019 to lead its clients' most challenging commercial disputes and litigate some of the nation's most complex and cutting-edge cases.
SOURCE Freedman Normand Friedland LLP

NEW YORK, Feb. 8, 2023 /PRNewswire/ -- Freedman Normand Friedland LLP, a preeminent litigation boutique firm with offices in New York, Miami, and Boston, is pleased to announce that Richard A. Lafont and Katie Friel...

Freedman Normand Friedland Announces New Counsel, Richard A. Lafont, and New Associate, Katie Friel, in its New York Office

DeSantis and Panel Discuss Need for Libel Law Reforms to Protect Everyday Citizens

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<div id="article-body">Law360 (January 26, 2023, 8:31 PM EST) -- Former students want to put the massive donations that helped wealthy children get into "need-blind" schools front and center in an antitrust case accusing top private universities of conspiring to limit financial aid, as they blasted a subset of institutions Wednesday for trying to hide those details. Out of the 17 defendants, Brown, Columbia, Dartmouth, Northwestern, Notre Dame and Yale have all sworn off claiming immunity from the suit under Section 568 of the Improving America's Schools Act of 1994, which conveys antitrust immunity for schools coordinating admissions, provided all students are admitted on a "need-blind basis" without considering finances. But the former students&nbsp;<a href="https://assets.law360news.com/1569000/1569607/https-ecf-ilnd-uscourts-gov-doc1-067128168191.pdf">argued Wednesday</a>&nbsp;this should not enable some of "the most culpable members" of the alleged price-fixing cartel to deny evidence "proving defendants' wealth favoritism, allocation of admissions slots to donor-favored applicants and admissions decisions prejudicial to scholarship applicants." U.S. District Judge Matthew Kennelly for now rejected assertions of immunity in an August decision&nbsp;<a href="https://www.law360.com/articles/1521075">refusing to dismiss the suit</a>. The plaintiffs argued Wednesday that the six schools cannot prevent discovery into admissions and fundraising with a sought protective order. They asserted in part that even though the six schools have sworn off the defense, the material is still relevant for the broader conspiracy in which 11 other defendants are still claiming that immunity. "The contested discovery bears directly on how, when and how often defendants attempted to conceal their wrongdoing and the injuries by hiding behind a publicly stated but inapplicable 'need blind' exemption for which they each annually certified that they qualified, while actually practicing wealth favoritism," the plaintiffs said. An attorney for the former students, Robert D. Gilbert of&nbsp;<a href="https://www.law360.com/firms/gilbert-litigators">Gilbert Litigators &amp; Counselors PC</a>, has receipts of that alleged favoritism, pointing in an accompanying declaration, among other things, to former&nbsp;<a href="https://www.law360.com/companies/sony-pictures-entertainment-inc">Sony Pictures CEO Michael Lynton's</a>&nbsp;$1 million check that allegedly secured his daughter admission to Brown, to a job liaising between Dartmouth's admissions and fundraising that "certainly suggests a pervasive use of wealth favoritism by Dartmouth," and to Russian oligarchs who have allegedly bought their children's way into Yale. Counsel for the plaintiffs declined to comment. Counsel for the schools did not immediately respond Thursday to press inquiries. The suit alleges the private universities worked together to eliminate financial aid as a point of competition between the schools, effectively fixing the total price of attendance for some 170,000 students over the past two decades. The suit names Brown University,&nbsp;<a href="https://www.law360.com/companies/california-institute-of-technology">California Institute of Technology</a>, Columbia University,&nbsp;<a href="https://www.law360.com/companies/cornell-university">Cornell University</a>, Dartmouth College, Duke University, Emory University,&nbsp;<a href="https://www.law360.com/companies/georgetown-university">Georgetown University</a>,&nbsp;<a href="https://www.law360.com/companies/massachusetts-institute-of-technology">Massachusetts Institute of Technology</a>, Northwestern University, University of Chicago, University of Notre Dame, University of Pennsylvania, Vanderbilt University, William Marsh Rice University and&nbsp;<a href="https://www.law360.com/companies/yale-university">Yale University</a>. An amended complaint in February added&nbsp;<a href="https://www.law360.com/companies/johns-hopkins-university">Johns Hopkins University</a>. At the center of the case and much of the overlapping discovery disputes is Section 568 and the alleged price-fixing cartel that the former students say the schools formed with a 568 Presidents Group under which they agreed to implement a common approach to evaluating an applicant's ability to pay for school and for using that calculation when making admission decisions. On Wednesday, the plaintiffs argued that regardless of the six schools' declaration that they would not use the 568 defense, Judge Kennelly has already "unequivocally ruled" that "the culpability of any one of the conspirators is evidence against all 17 conspirators." And they asserted the judge has made clear he "would not tolerate any obstructive gamesmanship from defendants," including efforts to resist showing evidence of admissions tied to donations. The battle over discovery&nbsp;<a href="https://www.law360.com/articles/1566189">goes both ways</a>. Among other things, the defendants are pushing to subpoena the students' families, fighting a sought protective order by arguing in a Jan. 20 brief that parents "are intimately involved in their children's undergraduate application process, including applications for financial aid." The students, on their part, continued Wednesday to fight discovery into things such as the schools they considered and were admitted to, the financial aid they received, the loans they took out and their satisfaction with the institutions they attended. In a separate filing, they argued that the schools' "public admissions that they engage in need-aware admissions and that the 568 Cartel's goal was to 'reduce variance' in pricing and to charge the 'maximum' amount that families can afford to pay" had made out a plainly illegal antitrust conspiracy. That makes the case now "largely about damages," according to the brief, which blasted the schools for seeking discovery on "irrelevant matters." "On the issue of who helped plaintiffs pay for college, for example, defendants argue that whether a student suffered injury depends on whether anyone helped her pay tuition. This is plainly wrong," they said. "In a horizontal price-fixing case, it is irrelevant whether the purchasers paid using their own money, borrowed money, or gifted money. This is because as a direct purchaser, the consumer suffers harm at the moment of purchase." Wednesday also saw the schools file individual answers to the lawsuit, including affirmative defenses that, in addition to 568 immunity, contend the collaboration had "procompetitive benefits" &mdash; which would only be at issue if the schools can get the case judged on the rule of reason, which is harder to prove than cases based on per se or automatic illegality &mdash; benefits like "a more efficient allocation of aid" that reduces costs and increases financial aid awards. Other defenses include assertions that the lawsuit is too old and that the students failed to "mitigate damages" because they could have gone to other schools that did not participate in the 568 group. "If plaintiffs had attended such schools, they might not have incurred any alleged price increase caused by the challenged conduct at the defendant schools they chose to attend, while still receiving a reasonably comparable education," Duke University said. "In addition, plaintiffs may not have exhausted all available sources of grants or other tuition relief that could have offset any alleged price increase." The students are represented by Edward Normand, Eric Rosen and Peter Bach-y-Rita of&nbsp;<a href="https://www.law360.com/firms/freedman-normand">Freedman Normand Friedland LLP</a>, Robert D. Gilbert and Elpidio Villarreal of Gilbert Litigators &amp; Counselors PC, Eric L. Cramer, Caitlin Coslett, Robert E. Litan and Daniel J. Walker of&nbsp;<a href="https://www.law360.com/firms/berger-montague">Berger Montague PC</a>, and Elizabeth A. Fegan of&nbsp;<a href="https://www.law360.com/firms/feganscott">Fegan Scott LLC</a>. Brown is represented by&nbsp;<a href="https://www.law360.com/firms/morgan-lewis">Morgan Lewis &amp; Bockius LLP</a>.&nbsp;<a href="https://www.law360.com/firms/cooley-llp">Cooley LLP</a>&nbsp;represents CalTech. The University of Chicago is represented by&nbsp;<a href="https://www.law360.com/firms/arnold-porter">Arnold &amp; Porter</a>. Columbia is represented by&nbsp;<a href="https://www.law360.com/firms/skadden-arps">Skadden Arps Slate Meagher &amp; Flom LLP</a>. Cornell and Rice are represented by&nbsp;<a href="https://www.law360.com/firms/king-spalding">King &amp; Spalding LLP</a>. Dartmouth is represented by&nbsp;<a href="https://www.law360.com/firms/jenner-block">Jenner &amp; Block LLP</a>. Duke is represented by&nbsp;<a href="https://www.law360.com/firms/covington-burling">Covington &amp; Burling LLP</a>,&nbsp;<a href="https://www.law360.com/firms/gibson-dunn">Gibson Dunn &amp; Crutcher LLP</a>&nbsp;and Saul Ewing&nbsp;<a href="https://www.law360.com/firms/saul-ewing">Arnstein &amp; Lehr LLP</a>. Emory is represented by&nbsp;<a href="https://www.law360.com/firms/jones-day">Jones Day</a>. Georgetown is represented by&nbsp;<a href="https://www.law360.com/firms/mayer-brown">Mayer Brown LLP</a>. Johns Hopkins is represented by&nbsp;<a href="https://www.law360.com/firms/ropes-gray">Ropes &amp; Gray LLP</a>. MIT is represented by&nbsp;<a href="https://www.law360.com/firms/freshfields">Freshfields Bruckhaus Deringer LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/goldman-ismail">Goldman Ismail Tomaselli Brennan &amp; Baum LLP</a>.&nbsp;<a href="https://www.law360.com/firms/sidley-austin">Sidley Austin LLP</a>&nbsp;represents Northwestern. Notre Dame is represented by&nbsp;<a href="https://www.law360.com/firms/williams-connolly">Williams &amp; Connolly LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/michael-best">Michael Best &amp; Friedrich LLP</a>. The University of Pennsylvania is represented by&nbsp;<a href="https://www.law360.com/firms/wilmerhale">WilmerHale</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/miller-shakman">Miller Shakman Levine &amp; Feldman LLP</a>. Vanderbilt is represented by&nbsp;<a href="https://www.law360.com/firms/white-case">White &amp; Case LLP</a>. Yale is represented by&nbsp;<a href="https://www.law360.com/firms/hogan-lovells">Hogan Lovells US LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/novack-macey">Novack &amp; Macey LLP</a>. The case is Henry et al. v. Brown University et al., case number&nbsp;<a href="https://www.law360.com/dockets/63d269a13c2cc27412d38b20">1:22-cv-00125</a>, in the&nbsp;<a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-illinois">U.S. District Court for the Northern District of Illinois</a>. --Additional reporting by Kelly Lienhard and Matthew Perlman. Editing by Vaqas Asghar.

</div>

By Bryan Koenig 
Law360 (January 26, 2023, 8:31 PM EST) -- Former students want to put the massive donations that helped wealthy children get into "need-blind" schools front and center in an antitrust case accusing top private universities of co...

Let Money Talk, Former Students Say In Elite Schools Row

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 " data-original-title="">Bryan Koenig</a>&nbsp;&middot;&nbsp;<a id="listen-link" title="Listen to article" href="https://www.law360.com/articles/1566189/elite-schools-former-students-spar-over-discovery?ts_pk=857b1542-ecfa-4712-875d-55cbe022f33d&amp;utm_source=user-alerts&amp;utm_medium=email&amp;utm_campaign=tracked-search-alert#">Law360</a>
<div id="article-body">Law360 (January 17, 2023, 8:20 PM EST) -- Admissions processes, donations tracking, scholarships, college decisions and more are on the line as discovery continues to heat up in an antitrust lawsuit from former students accusing Yale, Columbia, Duke, Emory and other top private universities of conspiring to limit financial aid. Each side blasted the other in several filings submitted last week in the year-old Illinois federal court case claiming that the private universities worked together to eliminate financial aid as a point of competition between the schools, effectively fixing the total price of attendance for some 170,000 students over the past two decades. The suit names Brown University,&nbsp;<a href="https://www.law360.com/companies/california-institute-of-technology">California Institute of Technology</a>, Columbia University,&nbsp;<a href="https://www.law360.com/companies/cornell-university">Cornell University</a>, Dartmouth College, Duke University, Emory University,&nbsp;<a href="https://www.law360.com/companies/georgetown-university">Georgetown University</a>,&nbsp;<a href="https://www.law360.com/companies/massachusetts-institute-of-technology">Massachusetts Institute of Technology</a>, Northwestern University, University of Chicago, University of Notre Dame, University of Pennsylvania, Vanderbilt University, William Marsh Rice University and&nbsp;<a href="https://www.law360.com/companies/yale-university">Yale University</a>. An amended complaint in February added&nbsp;<a href="https://www.law360.com/companies/johns-hopkins-university">Johns Hopkins University</a>. At the center of the case and much of the overlapping discovery disputes is Section 568 of the Improving America's Schools Act of 1994, which conveys antitrust immunity for schools coordinating admissions &mdash; provided all students are admitted on a "need-blind basis" without considering finances &mdash; and the alleged price-fixing cartel that the former students say the schools formed with a 568 Presidents Group under which they agreed to implement a common approach to evaluating an applicant's ability to pay for school and for using that calculation when making admission decisions. According to last week's filings, Brown, Columbia, Dartmouth, Northwestern, Notre Dame and Yale have all sworn off claiming immunity from the suit under Section 568 &mdash; immunity U.S. District Judge Matthew Kennelly rejected in an August decision&nbsp;<a href="https://www.law360.com/articles/1521075">refusing to dismiss the suit</a>. The schools argue that in doing so, they have eliminated any need for plaintiffs to get discovery "related to admissions and development activities" from them. "Withdrawal of this defense should have been welcome news to plaintiffs: it significantly narrows the disputed issues, reduces the burden and expense for both plaintiffs and the moving defendants, and allows these parties to focus on the antitrust issues that form the gravamen of plaintiffs' case," the six schools&nbsp;<a href="https://assets.law360news.com/1566000/1566189/https-ecf-ilnd-uscourts-gov-doc1-067128119494.pdf">said in a motion</a>&nbsp;Saturday seeking a protective order against such discovery. But instead of dropping or at least limiting that discovery for the six schools, they argued the former students doubled down with "extensive" demands, "revealing that plaintiffs' goal in pursuing such discovery is to harass and embarrass, rather than because it is relevant to their actual antitrust claim." Another set of schools &mdash; Brown, Chicago, Emory, Penn and Vanderbilt &mdash; want to at least limit discovery from their files by arguing they withdrew from the 568 group, according to a lengthy joint status report filed Friday. "Plaintiffs assert that the non-member schools 'refuse to search for or produce documents beyond the date of their alleged withdrawal.' ... That is unequivocally false," all 17 schools said in the report. "Each of the non-members has agreed to provide post-membership discovery on myriad relevant topics, including their lack of participation in the 568 group post-membership and their financial-aid practices post-membership," they continued. "They simply oppose sweeping discovery into their post-membership admissions practices, for the straightforward reason that admissions evidence is relevant only to the 568 exemption's applicability and they do not invoke the 568 exemption as a defense for any post-membership liability they may have." The plaintiffs blasted both efforts to limit their discovery, in one of several broadsides against the schools found in their half of the status report. Targeting the schools that say they have withdrawn from the cartel, the plaintiffs argued that parties who actually warrant credit for leaving an antitrust conspiracy must "disavow or repudiate the conspiracy and its goals." But here, the withdrawal letters "praised the conspiracy and wished it continued success in the future," according to the plaintiffs. "Plaintiffs have further explained to defendants in writing ... that, absent conclusive proof of withdrawal and disavowal or repudiation of the conspiracy and the goals of the conspiracy, these defendants remained a part of the conspiracy, and thus remained liable for the acts and omissions of each other member of the conspiracy &mdash; and vice versa," they said. "There can be no silo of immunity from liability when one is in a conspiracy." More broadly, the plaintiffs said that 16 out of 17 schools have refused to name custodians in their development offices for searches, while at least 11 of the schools have balked at naming someone in their president's office. They argue that only through those offices can they see whether admissions decisions were made from the very top and if donations influenced the process. The schools responded that those searches amount to looking for a needle in a haystack on top of the "tens of millions of documents" already collected from custodians in places like admissions offices. "It would be more efficient for plaintiffs to review the documents and data from those sources before defendants spend additional time and resources sifting through voluminous information that likely has no bearing on this case," the schools said. Separately, the schools have accused the plaintiffs &mdash; who are also seeking a protective order barring subpoenas on their parents &mdash; of their own discovery failures. In a separate motion to compel filed Friday, the schools argued the former students "have offered no legitimate basis for their refusal to participate meaningfully in discovery," discovery seeking information about financial aid offers the plaintiffs received, alternative methodologies the plaintiffs think the schools should have used to calculate aid, how they paid for school, and the process through which the students decided where to attend "which are relevant to plaintiffs' hyper-narrow alleged market." "Plaintiffs' resistance to providing the requested information is particularly indefensible given their demand for billions in damages," the schools said. Counsel for the parties did not immediately respond late Tuesday to press inquiries. The students are represented by Kyle W. Roche, Edward Normand, Eric Rosen and Peter Bach-y-Rita of&nbsp;<a href="https://www.law360.com/firms/freedman-normand">Roche Freedman LLP</a>, Robert D. Gilbert and Elpidio Villarreal of&nbsp;<a href="https://www.law360.com/firms/gilbert-litigators">Gilbert Litigators &amp; Counselors PC</a>, Eric L. Cramer, Caitlin Coslett, Robert E. Litan and Daniel J. Walker of&nbsp;<a href="https://www.law360.com/firms/berger-montague">Berger Montague PC</a>, and Elizabeth A. Fegan of&nbsp;<a href="https://www.law360.com/firms/feganscott">Fegan Scott LLC</a>. Brown is represented by&nbsp;<a href="https://www.law360.com/firms/morgan-lewis">Morgan Lewis &amp; Bockius LLP</a>. CalTech is represented by&nbsp;<a href="https://www.law360.com/firms/cooley-llp">Cooley LLP</a>. The University of Chicago is represented by&nbsp;<a href="https://www.law360.com/firms/arnold-porter">Arnold &amp; Porter</a>. Columbia is represented by&nbsp;<a href="https://www.law360.com/firms/skadden-arps">Skadden Arps Slate Meagher &amp; Flom LLP</a>. Cornell and Rice are represented by&nbsp;<a href="https://www.law360.com/firms/king-spalding">King &amp; Spalding LLP</a>. Dartmouth is represented by&nbsp;<a href="https://www.law360.com/firms/jenner-block">Jenner &amp; Block LLP</a>. Duke is represented by&nbsp;<a href="https://www.law360.com/firms/covington-burling">Covington &amp; Burling LLP</a>,&nbsp;<a href="https://www.law360.com/firms/gibson-dunn">Gibson Dunn &amp; Crutcher LLP</a>&nbsp;and Saul Ewing&nbsp;<a href="https://www.law360.com/firms/saul-ewing">Arnstein &amp; Lehr LLP</a>. Emory is represented by&nbsp;<a href="https://www.law360.com/firms/jones-day">Jones Day</a>. Georgetown is represented by&nbsp;<a href="https://www.law360.com/firms/mayer-brown">Mayer Brown LLP</a>. Johns Hopkins is represented by&nbsp;<a href="https://www.law360.com/firms/ropes-gray">Ropes &amp; Gray LLP</a>. MIT is represented by&nbsp;<a href="https://www.law360.com/firms/freshfields">Freshfields Bruckhaus Deringer LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/goldman-ismail">Goldman Ismail Tomaselli Brennan &amp; Baum LLP</a>. Northwestern is represented by&nbsp;<a href="https://www.law360.com/firms/sidley-austin">Sidley Austin LLP</a>. Notre Dame is represented by&nbsp;<a href="https://www.law360.com/firms/williams-connolly">Williams &amp; Connolly LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/michael-best">Michael Best &amp; Friedrich LLP</a>. The University of Pennsylvania is represented by&nbsp;<a href="https://www.law360.com/firms/wilmerhale">WilmerHale</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/miller-shakman">Miller Shakman Levine &amp; Feldman LLP</a>. Vanderbilt is represented by&nbsp;<a href="https://www.law360.com/firms/white-case">White &amp; Case LLP</a>. Yale is represented by&nbsp;<a href="https://www.law360.com/firms/hogan-lovells">Hogan Lovells US LLP</a>&nbsp;and&nbsp;<a href="https://www.law360.com/firms/novack-macey">Novack &amp; Macey LLP</a>. The case is Henry et al. v. Brown University et al., case number&nbsp;<a href="https://www.law360.com/dockets/63c53c78bcf7fbd0419481ec">1:22-cv-00125</a>, in the&nbsp;<a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-illinois">U.S. District Court for the Northern District of Illinois</a>. --Additional reporting by Kelly Lienhard and Matthew Perlman. Editing by Vaqas Asghar.</div>

By Bryan Koenig &middot; Law360
Law360 (January 17, 2023, 8:20 PM EST) -- Admissions processes, donations tracking, scholarships, college decisions and more are on the line as discovery continues to heat up in an antitrust lawsuit from form...

Elite Schools, Former Students Spar Over Discovery

Coinbase Sued by Wallet users scammed out of $21M in crypto

NEW YORK, July 6, 2022 /PRNewswire/ &#8212; On July 1, 2022 Roche Freedman LLP (&#8220;RF&#8221;) and Schneider Wallace Cottrell Konecky (&#8220;SWCK&#8221;) filed a class action lawsuit for violations of federal securities laws against Solana Labs, Inc., the Solana Foundation, Anatoly Yakovenko, Multicoin Capital Management LLC, Kyle Samani, and FalconX LLC (&#8220;Defendants&#8221;).
Plaintiff Mark Young, a resident of California, alleges that Defendants violated Sections 5, 12(a)(1), and 15 of the 1933 Securities Act, and Sections 25110 and 2550 of the California Corporations Code. Plaintiff&#8217;s claims are based on Defendants&#8217; sale of Solana securities without any registration statement in effect, and their promotion of unregistered Solana securities.
Plaintiff&#8217;s claims are brought as a class action on behalf of himself and as a representative for a proposed class of other investors in Solana securities between March 24, 2020, and the present, inclusive (the &#8220;Class Period&#8221;). The case is pending in the U.S. District Court for the Northern District of California and is captioned Mark Young v. Solana Labs, Inc., et al., Case No. 22-cv-03912.
Solana Labs, Inc., is based in San Francisco California and issues securities that began to be offered to U.S. investors on March 24, 2020. Plaintiff alleges that Solana issues securities that are required to be, but are not, registered with the U.S. Securities and Exchange Commission. Throughout the Class Period, Defendants promoted Solana securities and sold them to investors such as Plaintiff, who has suffered losses from purchasing Solana securities.
Not later than September 6, 2022, which is sixty days from the date of publication of this notice, any member of the proposed class that is identified in Plaintiff&#8217;s complaint may move to the Court to serve as Lead Plaintiff through counsel of their choice. The rules for the Lead Plaintiff process are provided by the Private Securities Litigation Reform Act of 1995 (the &#8220;PSLRA&#8221;). See 15 U.S.C. § 78u-4(a)(2)(A)(i)-(vi); § 78u-4(a)(3)(A)(i)(II); § 77z-1(a)(2)(A)(i)-(vi); § 77z-1(a)(3)(A)(i)(II). Any member of the putative class may also choose to do nothing and remain a member of the proposed class. The ability to share in any potential future recovery from this class action is not dependent on moving for or serving as Lead Plaintiff.
RF is a law firm based in New York City with additional offices in Miami. SWCK is based in Oakland, California, and has offices in Los Angeles, Houston, and Charlotte, North Carolina. Both RF and SWCK have served as lead counsel in securities class actions. Both RF and SWCK have recovered substantial sums of money for their clients in class action litigation. For more information about RF, please visit <a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3586975-1&amp;h=350443804&amp;u=https%3A%2F%2Fwww.rochefreedman.com%2F&amp;a=https%3A%2F%2Fwww.rochefreedman.com" target="_blank" rel="nofollow noopener">https://www.rochefreedman.com</a>. For more information about SWCK, please visit <a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3586975-1&amp;h=1151079548&amp;u=https%3A%2F%2Fwww.schneiderwallace.com%2F&amp;a=https%3A%2F%2Fwww.schneiderwallace.com" target="_blank" rel="nofollow noopener">https://www.schneiderwallace.com</a>, or contact RF and SWCK as described below:
Kyle Roche Edward Normand 99 Park Avenue, Suite 1910 New York, NY 10016 Tel: 646-350-0527 Fax: 646-392-8842 Email: <a href="mailto:kyle@rochefreedman.com" target="_blank" rel="nofollow noopener">kyle@rochefreedman.com</a>, <a href="mailto:tnormand@rochefreedman.com" target="_blank" rel="nofollow noopener">tnormand@rochefreedman.com</a>
Todd Schneider Matthew S. Weiler 2000 Powell Street, Suite 1400 Emeryville, California 94608 Tel: 415-421-7100 Toll Free: 800-689-0024 Fax: 415-421-7105 Email: <a href="mailto:info@schneiderwallace.com" target="_blank" rel="nofollow noopener">info@schneiderwallace.com</a>
SOURCE Roche Freedman LLP

NEW YORK, July 6, 2022 /PRNewswire/ &#8212; On July 1, 2022 Roche Freedman LLP (&#8220;RF&#8221;) and Schneider Wallace Cottrell Konecky (&#8220;SWCK&#8221;) filed a class action lawsuit for violations of federal securities laws against Solana Labs, Inc.,...

Roche Freedman LLP and Schneider Wallace Cottrell Konecky Bring Class Action Lawsuit Against Solana Labs, Inc., the Solana Foundation, Anatoly Yakovenko, Multicoin Capital Management LLC, Kyle Samani, and FalconX LLC for Violations of Federal Securities Laws

By Andrew Denney | July 01, 2022
In lawsuit years, this pay discrimination case appears to have been resolved with an eight-figure settlement about as fast as Googling something.
On Friday, attorneys for a proposed class of more than 8,200 female and nonwhite Google employees—who filed a complaint in a Brooklyn state court just two days prior—announced that the technology behemoth has agreed to pay $22 million to settle claims that they were assigned compensation classifications that led them to get paid less than their white and male peers, regardless of their qualifications and job performance. 
The comparatively lower “job levels” are assigned to women and minority workers when they are hired and continually impede opportunities for increased pay as they stay with the company, the plaintiffs alleged.
The relatively short time between the suit getting filed and the announcement of the settlement agreement is due to extensive talks between Google and the lawyers for the two female plaintiffs named in the case prior to filing the complaint in Brooklyn. According to court papers, the company was made aware of the plaintiffs’ intent to sue in September 2020 and hammered out the details of the settlement in mediation sessions held over subsequent months.
In addition to the payment, Google, which as part of the settlement denies any wrongdoing, has also agreed to work with independent experts to ensure equity in its pay level system, according to court documents.
“It’s truly fulfilling to reach this result for thousands of class members and to shine light on the experiences of women and individuals of color at Google,” said Maya Jumper of Roche Freedman, who represents one of the plaintiffs. “Plaintiffs, and the women and men who shared their stories, have made a difference at Google and advanced pay equity standards in the tech industry. Google now has an opportunity to serve as a model for the industry both in technological advancement and workplace equality.” 
Google did not respond to a request for comment.
The Brooklyn settlement comes just weeks <a href="https://www.nytimes.com/2022/06/12/business/google-discrimination-settlement-women.html">after it was announced</a> that Google agreed to pay $118 million to settle a similar class-action lawsuit filed in a state court in San Francisco.

By Andrew Denney | July 01, 2022
In lawsuit years, this pay discrimination case appears to have been resolved with an eight-figure settlement about as fast as Googling something.
On Friday, attorneys for a proposed class of more than 8,200 female and nonw...

Google Agrees to Pay $22 Million to Settle Pay Discrimination Allegations

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<div id="article-body">Law360, New York (June 27, 2022, 7:42 PM EDT) &#8212; A would-be <a href="https://www.law360.com/companies/twitter-inc">Twitter</a>-based stock sage on Monday was sentenced to six months of house arrest for what prosecutors say was a social media-based pump-and-dump scheme designed to induce his followers to drive up the share price of a worthless shell company.
Ohio day trader Steven Gallagher, 51, was sentenced to time served and three years of supervised release, with six months of the sentence to be served under home confinement. U.S. District Judge Valerie Caproni in Manhattan also fined Gallagher $10,000 and ordered him to forfeit $21,716.
Gallagher in February pled guilty to one count of securities fraud. Prosecutors say he used his Twitter account, named after a character from the cult classic film &#8220;A Clockwork Orange,&#8221; to artificially pump up the share price of microcap stock SpectraScience Inc., which was in fact a shell company with no operations.
Beginning in late 2020, Gallagher and others discussed plans to buy SCIE stock while it was cheap and then tout the stock on Twitter, according to the government. Gallagher subsequently purchased about 26 million SCIE shares, and began to hype the stock using his &#8220;Alex DeLarge&#8221; themed Twitter handle.
After a series of tweets promoting SCIE stock, the share price by late January 2021 had increased around 300 percent and Gallagher began selling off his position, prosecutors say, at the same time falsely telling his Twitter followers that he had not sold any SCIE shares and continuing to encourage others to buy SCIE stock. He netted about $22,000 from his SCIE trading.
In a brief statement to the court, Gallagher apologized to his wronged Twitter followers and promised Judge Caproni that he would never again appear in her courtroom.
&#8220;I wanted to be someone who did right, and I did not live up to those goals,&#8221; he said.
Judge Caproni seemed unconvinced by Gallagher&#8217;s expression of remorse, saying he was minimizing his wrongdoing. She also took aim at the assertion in Gallagher&#8217;s sentencing memorandum that he got into trading penny stocks as a way to diversify his portfolio, calling the explanation &#8220;preposterous.&#8221; But the judge said Gallagher&#8217;s scheme was &#8220;not the biggest fraud the court has ever seen.&#8221;
&#8220;This conduct was deplorable,&#8221; Judge Caproni told Gallagher, &#8220;and it went on even after you were warned by your brokerage.&#8221;
Judge Caproni noted that while the penny stock market has always been rife with fraud, social media sites like Twitter and <a href="https://www.law360.com/companies/reddit-inc">Reddit</a> have &#8220;supercharged that,&#8221; and allow fraudsters to prey on the most vulnerable and sophisticated investors.
&#8220;It&#8217;s not a victimless crime,&#8221; Judge Caproni said.
Prosecutors had sought incarceration for Gallagher, recommending a sentence within the advisory sentencing guidelines range of 8 to 14 months in prison. Assistant U.S. Attorney Richard Cooper told Judge Caproni that Gallagher is well off financially and did not commit this crime out of necessity.
&#8220;This was a crime of opportunity and greed,&#8221; Cooper said.
An attorney for Gallagher, Eric Rosen of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, focused much of his argument to Judge Caproni on Gallagher&#8217;s personal characteristics, leaning in on his history of charity, and his role as an employer of hundreds of people in his Toledo, Ohio-based magazine telemarketing business.
Rosen also said that general deterrence is served in low-level cases like Gallagher&#8217;s by bringing the charges in the first place, and that he has already been pilloried in the press as being akin to an &#8220;old-school boiler room&#8221; fraudster.
Moreover, the <a href="https://www.law360.com/agencies/u-s-securities-and-exchange-commission">Securities and Exchange Commission —</a> which brought a parallel action against Gallagher — has frozen all his assets, resulting in hundreds of thousands of dollars in losses, Rosen said.
A spokesman for the <a href="https://www.law360.com/agencies/u-s-attorney-s-office-for-the-southern-district-of-new-york">U.S. Attorney&#8217;s Office for the Southern District of New York</a> declined to comment after the sentencing hearing.
In a statement, Rosen said Gallagher looks forward to serving his sentence and putting his conduct behind him.
&#8220;The court&#8217;s sentence was fair and just, and Mr. Gallagher accepts the court&#8217;s reasoned judgment,&#8221; Rosen said.
The government is represented by Richard Cooper and Daniel Tracer of the U.S. Attorney&#8217;s office for the Southern District of New York.
Gallagher is represented by Eric Rosen and Richard Cipolla of Roche Freedman LLP.
The case is U.S. v. Gallagher, case number 1:22-cr-00122, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-new-york">U.S. District Court for the Southern District of New York</a>.
&#8211;Editing by Peter Rozovsky.</div>

By Stewart Bishop ·  Listen to article
Law360, New York (June 27, 2022, 7:42 PM EDT) &#8212; A would-be Twitter-based stock sage on Monday was sentenced to six months of house arrest for what prosecutors say was a social media-based pump-and-dump scheme d...

Twitter Stock Pumper Avoids Prison For Microcap Fraud

NEW YORK, June 17, 2022 /PRNewswire/ &#8212; Roche Freedman LLP and Dontzin Nagy &amp; Fleissig LLP filed a class action lawsuit on June 15, 2022 on behalf of investors in the crypto-asset &#8220;UST&#8221; against BAM Trading Services Inc. (&#8220;Binance U.S.&#8221;), as well as Binance U.S.&#8217;s CEO Brian Shroder, alleging that Binance U.S. violated federal and state securities laws when it sold UST to investors beginning on or around April 13, 2022.
The lawsuit, brought in the U.S. District Court for the Northern District of California, alleges violations of Sections 5, 12(a)(1), and 15 of the 1933 Securities Act, Sections 5, 15(a)(1), 20, and 29(b) of the 1934 Securities Exchange Act, and Sections 25110, 25130, 25503, 2521, 25501.5(a), and 25504 of the California Securities Act, based on Binance&#8217;s sale of UST, despite UST being a security, without any registration statement in effect and without registering as a securities exchange or broker-dealer. According to the lawsuit, these actions led to investors being wiped out when UST crashed in May 2022, losing essentially all of its $18 billion market capitalization over the span of a few days.
The lawsuit is thus brought on behalf of all persons or entities who purchased UST tokens on Binance U.S. from April 13, 2022, to the present. The action is captioned Jeffrey Lockhart v. BAM Trading Services Inc. and Brian Shroder, Case No. 53:22-cv-03461 (N.D. Cal.).
Binance U.S. is a Delaware company headquartered in Palo Alto, California. Mr. Shroder is a resident of California.
For investors who purchased UST securities on Binance U.S. during the Class Period, you are a member of this proposed Class and may be able to seek appointment as lead plaintiff, which is a court-appointed representative for the Class, by complying with the relevant provisions for the Private Securities Litigation Reform Act of 1995 (the &#8220;PSLRA&#8221;). See 15 U.S.C. § 78u-4(a)(2)(A)(i)-(vi); § 78u-4(a)(3)(A)(i)(II); § 77z-1(a)(2)(A)(i)-(vi); § 77z-1(a)(3)(A)(i)(II). If you wish to serve as lead plaintiff, you must move the Court no later than August 16, 2022. You need not seek to become a lead plaintiff in order to share in any possible recovery. You may retain counsel of your choice to represent you in this action.
For further inquiries regarding this matter, please contact Kyle Roche (<a href="mailto:kyle@rochefreedman.com" target="_blank" rel="nofollow noopener">kyle@rochefreedman.com</a>) at 646-970-7509.
<div class="wcag-arialevel-3" role="heading">About Roche Freedman LLP</div>
Founded in 2019, Roche Freedman LLP is a national law firm comprised of innovative and tech-savvy attorneys with stellar credentials. With experience from some of the most prestigious litigation firms in the country, RF&#8217;s legal team has a successful and decades-long track record of consistently achieving outstanding results in high-stakes and notable disputes on behalf of sophisticated clients. RF&#8217;s legal team has extensive experience litigating complex commercial, securities, antitrust, class action and derivative matters on behalf of both plaintiffs and defendants in a broad range of industries. RF couples a unique brand of creative thinking and technical expertise with well-balanced aggressive advocacy to achieve impressive results in complex, high-value, and class action matters. As the firm continues to grow, it has focused on building a diverse attorney pool with cross-functional expertise.
Founding Partner Kyle W. Roche is a recognized thought leader in the cryptocurrency arena and has published multiple articles on the intersection of cryptocurrency and law, including in the Wall Street Journal. He is a frequent speaker and lecturer on the topic, having guest-lectured at the Northwestern Pritzker School of Law and having served on the Keynote panel at Harvard Law School&#8217;s Blockchain, Fintech, &amp; the Law conference. Founding partner Ted Normand is RF&#8217;s most experienced litigator and has both prosecuted and defended numerous complex cases under the federal securities and antitrust laws and in national class actions.
The firm&#8217;s attorneys are currently litigating numerous cryptocurrency cases. RF has been appointed as lead counsel in the seminal cryptocurrency class actions, Leibowitz et al. v. iFinex Inc. et al., Case No. 1:19-cv-09236 (S.D.N.Y.), Clifford et al. v. Tron Foundation et al., Case No. 1:20-cv-02804 (S.D.N.Y.), Messieh &amp; Lee v. HDR Global Trading Limited &amp; Arthur Hayes et al., Case No. 1:20-cv-03232 (S.D.N.Y.), Valenti v. Dfinity Foundation et al., Case No. 3:21-cv-06118 (N.D. Cal.).
<div class="wcag-arialevel-3" role="heading">About Dontzin Nagy &amp; Fleissig LLP</div>
Based in New York, Dontzin Nagy &amp; Fleissig LLP is an elite litigation boutique that regularly represents plaintiffs and defendants in high-stake trials in state and federal courts and arbitrations throughout the United States, as well as in jurisdictions around the globe. We are often retained by clients shortly before trial to help secure victory in their most important disputes. We are litigation generalists that do not specialize in any single practice area or discipline. Indeed, our attorneys have successfully represented clients in complex commercial matters involving securities, cryptocurrencies, class actions, mergers and acquisitions, corporate governance, RICO, patents, copyright, trade secrets, regulatory enforcement, and criminal defense, among other areas.
Partner Tibor L. Nagy is an experienced trial lawyer who as lead counsel has successfully tried numerous cases, including class claims, with hundreds of millions and even billions of dollars at stake. He has been recognized as an &#8220;Elite Boutique Trailblazer&#8221; by the National Law Journal, in Benchmark Litigation&#8217;s &#8220;Under 40 Hot List,&#8221; and as one of Crain&#8217;s New York Business&#8217;s &#8220;Notable Hispanic Leaders &amp; Executives.&#8221; Counsel Gregory N. Wolfe is a trial lawyer who has successfully represented plaintiffs and defendants in a variety of complex matters seeking hundreds of millions to billions of dollars in damages. The firm routinely represents companies, investors, and other individuals in cryptocurrency disputes and has been doing so for over half-a-decade—a lifetime in the world of cryptocurrency.

NEW YORK, June 17, 2022 /PRNewswire/ &#8212; Roche Freedman LLP and Dontzin Nagy &amp; Fleissig LLP filed a class action lawsuit on June 15, 2022 on behalf of investors in the crypto-asset &#8220;UST&#8221; against BAM Trading Services Inc. (&#8220;Binanc...

Roche Freedman LLP and Dontzin Nagy &#038; Fleissig LLP Bring Class Action Lawsuit Against Binance U.S. for Engaging in Unlawful Sales of UST to Investors

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<div id="article-body">Law360 (June 13, 2022, 10:02 PM EDT) &#8212; Cryptocurrency exchange <a href="https://www.law360.com/companies/binance-holdings-ltd">Binance</a> was hit with a proposed class action in California federal court on Monday claiming the company misrepresented the stability of &#8220;algorithmic stablecoin&#8221; TerraUSD and that it failed to protect investors by offering the now-collapsed stablecoin on its platform. 
Plaintiff Jeffrey Lockhart brought the suit against Binance, also known as <a href="https://www.law360.com/companies/binance-us">BAM Trading Services Inc</a>., and its CEO, Brian Shroder. The <a href="https://assets.law360news.com/1502000/1502198/2022.06.13%20complaint%20(final).pdf">complaint</a> alleges the defendants violated various provisions of federal and state securities laws by offering TerraUSD on the Binance platform. The suit is on behalf of all investors who used Binance to buy and sell TerraUSD from April 13 to the present. 
The complaint alleges that Binance failed to disclose to investors that TerraUSD is a security and that Binance had failed to register with the <a href="https://www.law360.com/agencies/u-s-securities-and-exchange-commission">U.S. Securities and Exchange Commission</a> as either a securities exchange or a registered broker-dealer.
The complaint also alleges that Luna, TerraUSD&#8217;s sister cryptocurrency, is a security but not one registered with the SEC or any state regulator. And by failing to disclose this information to investors, Binance deprived the group of traditional disclosures that accompany the issuance of publicly traded securities, according to the complaint.
&#8220;Binance U.S.&#8217;s failure to comply with the securities laws, and its false advertisements of [TerraUSD], have led to disastrous consequences for Binance U.S.&#8217;s customers: in May 2022, in the span of just a few days, [TerraUSD] lost essentially all its value — a loss of approximately $18 billion,&#8221; the complaint states. &#8220;Investors who purchased [TerraUSD] on Binance U.S. were wiped out, learning quickly that, contrary to Binance U.S.&#8217;s advertisements, [TerraUSD] was not &#8216;safe,&#8217; &#8216;stable,&#8217; or &#8216;fiat-backed.'&#8221;
TerraUSD is associated with decentralized finance startup Terraform Labs. It&#8217;s one of the top stablecoins by market capitalization, according to <a href="https://www.law360.com/companies/coinmarketcap-opco-llc">CoinMarketCap</a>.
Stablecoins are digital assets that are supposed to maintain a steady price, often $1 per coin. But TerraUSD is slightly different from other stablecoins in that instead of being <a href="https://www.law360.com/articles/1443521">backed by cash</a> or cash equivalents, TerraUSD is a so-called algorithmic stablecoin, which relies on technology and financial engineering to maintain its price.
&#8220;The Terra protocol uses the basic market forces of supply and demand to maintain the price&#8221; of TerraUSD, Terraform Labs&#8217; website says. The protocol ensures that the supply and demand of TerraUSD are &#8220;always balanced, leading to a stable price.&#8221;
But the coin&#8217;s algorithmic backing proved disastrous for investors in May when TerraUSD&#8217;s price, which was supposed to hold consistent at $1, plunged amid a frantic sell-off, hitting a low of 1 cent by the end of May. Likewise, its sister cryptocurrency, Luna, intended to help keep TerraUSD&#8217;s price steady, entered a &#8220;death spiral&#8221; that wiped billions in value from the market in a matter of days.
&#8220;An incredible number of investors lost much, if not all, of their life savings … investors were in such despair that they commented in online forums that they were contemplating suicide as a result of the [TerraUSD and Luna] crash,&#8221; the complaint states.
Lockhart claims that since the collapse of TerraUSD, Binance has not stopped selling securities created by Terraform Labs.
&#8220;Having reaped hundreds of millions — if not billions — of dollars in profits by selling securities without bothering to comply with federal and state laws, Binance U.S.&#8217;s parent company blithely added insult to injury when, on May 31, 2022, it began selling Luna 2.0 — a new token which, just like LUNA, is centrally controlled by [Terraform Labs],&#8221; the complaint states.
Lockhart says that Binance&#8217;s failure and refusal to comply with federal and state securities laws allows &#8220;bad actors&#8221; like Terraform Labs to harm investors. The complaint alleges that Binance&#8217;s entire business model is built on enabling such &#8220;bad actors&#8221; as Binance only profits from the scheme.
&#8220;From Binance U.S.&#8217;s perspective, the less disclosure, the better, as more disclosure about the riskiness of crypto-assets will predictably lead investors to trade certain assets less and reduce transaction volume and Binance U.S.&#8217;s astonishing profits,&#8221; the complaint states.
Lockhart seeks declaratory and injunctive relief, damage, attorney fees and a jury trial.
In a statement to Law360, Lockhart&#8217;s counsel said they would do everything possible to help those who suffered losses get their money back.
&#8220;Binance and other exchanges were critical enablers of this devastating failure to comply with the securities laws. Crypto exchanges made massive profits by flouting securities laws and causing real harm to real people,&#8221; said Tibor L. Nagy Jr. of <a href="https://www.law360.com/firms/dontzin-nagy">Dontzin Nagy &amp; Fleissig LLP</a>.
Binance did not immediately respond to requests for comment on Monday.
Lockhart&#8217;s suit is one of the first over the collapse of TerraUSD and Luna. There has also been a growing push from lawmakers and regulators for greater stablecoin regulation.
In early May, shortly after the initial collapse, <a href="https://www.law360.com/agencies/u-s-department-of-the-treasury">U.S. Department of the Treasury Secretary Janet Yellen</a> told senators that the crash was a <a href="https://www.law360.com/articles/1491866/terra-selloff-spotlights-need-for-stablecoin-regs-yellen-says">further warning sign </a>of how cryptocurrency can present a risk to financial stability.
Yellen used TerraUSD&#8217;s woes to call for a legislative and regulatory framework for stablecoins, saying it would be &#8220;highly appropriate&#8221; to get something in place this year.
&#8220;I think [this episode] simply illustrates that this is a rapidly growing product and that there are risks to financial stability, and we need a framework that&#8217;s appropriate,&#8221; Yellen told the Senate Banking Committee in a livestreamed hearing on financial stability.
And last week, a bipartisan duo of U.S. senators <a href="https://www.law360.com/articles/1500301/senators-propose-long-awaited-crypto-regulatory-overhaul">unveiled legislation</a> that seeks to bring clarity to cryptocurrency regulation, introducing a wide-ranging proposal that would define most digital assets as commodities and enact rules governing stablecoins.
The Responsible Financial Innovation Act, co-sponsored by Sens. Cynthia Lummis, R-Wyo., and Kirsten Gillibrand, D-N.Y., would establish the federal government&#8217;s recognition of the booming but often volatile cryptocurrency industry if it becomes law.
Specifically, the bill would require that any stablecoin issuer hold sufficient reserves so that they can always redeem the asset in exchange for its equivalent dollar value. The proposal also requires certain disclosure obligations among stablecoin issuers.
Additionally, the proposal sets forth an optional framework that would authorize banks and credit unions to issue stablecoins. However, the Lummis-Gillibrand legislation does not require all stablecoin issuers to become depository institutions, meaning they would come under less regulation than full-fledged banks or saving associations.
The SEC under Chair Gary Gensler is also <a href="https://www.law360.com/articles/1493507/sec-s-gensler-steps-up-calls-for-tougher-crypto-regulations">seeking more oversight</a> of cryptocurrencies. The commission has recently focused on exchanges that provide trading venues for such assets, arguing that more regulation is needed because most tokens trading on digital platforms are, in fact, securities.
And Gensler has emphasized that cracking down on cryptocurrency&#8217;s &#8220;Wild West&#8221; is a priority. In May, the agency said it was <a href="https://www.law360.com/articles/1489557">nearly doubling</a> the size of its cryptocurrency and cybersecurity enforcement unit to help crack down on fraud and noncompliance.
The SEC is also no stranger to Terraform Labs. The agency has been <a href="https://www.law360.com/articles/1469509">investigating</a> another of Terraform&#8217;s initiatives called Mirror Protocol, which purportedly allowed users to create and trade digital assets that &#8220;mirror&#8221; the price of U.S. securities.
The agency served investigative subpoenas on Terraform Labs CEO Do Kwon at a cryptocurrency summit last year, although Kwon has contested whether the agency acted properly.
Lockhart is represented by Tibor L. Nagy Jr., Gregory N. Wolfe, William LaGrange, Heidi R. Schumann and Susan S. Hu of Dontzin Nagy &amp; Fleissig LLP and by Kyle Roche, Edward Normand, Joseph Delich, Alex Potter and Ivy T. Ngo of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>.
Counsel information for Binance and Shroder was not immediately available.
The case is Lockhart v. BAM Trading Services Inc. et al., case number <a href="https://www.law360.com/cases/62a714ce84595f033bc70969">3:22-cv-03461</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-california">U.S. District Court for the Northern District of California</a>.
&#8211;Additional reporting by Elise Hansen and Tom Zanki. Editing by Andrew Cohen.</div>

By Katryna Perera ·  Listen to article
Law360 (June 13, 2022, 10:02 PM EDT) &#8212; Cryptocurrency exchange Binance was hit with a proposed class action in California federal court on Monday claiming the company misrepresented the stability of &#8220;algo...

Binance Hit With Investor Suit Over Terra Stablecoin Collapse

NY Times DealBook Newsletter (June 13, 2022)
A proposed class action filed in California federal court today appears to be the first U.S. case arising from the $40 billion Terra/Luna crypto crash last month, when the stablecoin known as UST, meant to maintain a $1 value, fell to about 11 cents. The case targets Binance.US, an exchange that promoted UST as “safe,” alleging that the company listed an unregistered securities offering and itself failed to register with the S.E.C.
Investors say they bought UST based on Binance’s claims.
The case, led by Kyle Roche of Roche Freedman and Tibor Nagy of Dontzin Nagy &amp; Fleissig, argues that the company’s listing and promotions gave investors the impression that UST was a risk-free alternative to more volatile crypto investments and that Binance.US has been changing its arbitration clause since the crash, making the terms “unconscionable” in anticipation of an onslaught of complaints. A Binance.US spokeswoman countered that the assertions are meritless and that the company “adheres to all applicable regulations.” She added, “We will defend ourselves vigorously.”
Do the current rules apply to new products?
Gary Gensler, the S.E.C. chairman, argues that many crypto assets are classic “investment contracts” requiring registration with the agency and that crypto exchanges should register, too. Based on the Supreme Court’s 1946 “Howey Test,” an “investment contract” is defined as a monetary investment in a common enterprise with an expectation of profit from others’ efforts. But there is great debate in the crypto industry and among regulators and lawmakers about just what falls into that category.
Are algorithmic stablecoins securities? 
UST’s dollar price was stabilized through a relationship with another cryptocurrency, Luna, and relied on arbitrage incentives. Investors maintain UST by making or destroying its supply in exchange for Luna and can profit in the process. But in May, when investors fled UST, Terra founders had to intervene. The arbitrage design and that interference, among other things, show that UST is an investment contract per the Howey Test, the complaint contends.

NY Times DealBook Newsletter (June 13, 2022)
A proposed class action filed in California federal court today appears to be the first U.S. case arising from the $40 billion Terra/Luna crypto crash last month, when the stablecoin known as UST, meant to main...

A Crypto Exchange Faces the First Terra Crash Case

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<div id="article-body">Law360 (May 26, 2022, 9:01 PM EDT) &#8212; A California cannabinoid research organization has filed an updated complaint in its suit alleging the Kern County Sheriff&#8217;s Office wrongly bulldozed $1 billion worth of hemp crop, saying newly acquired evidence shows how a sheriff&#8217;s sergeant deceived courts into granting a warrant that led to the destruction. 
In the <a href="https://assets.law360news.com/1497000/1497404/https-ecf-caed-uscourts-gov-doc1-033113102300.pdf">100-page complaint</a> filed Wednesday, Apothio LLC says warrant affidavits from Sheriff&#8217;s Sgt. Joshua Nicholson and tape-recorded conversations acquired through discovery show that the plot to destroy the hemp plants goes all the way up to the director of the <a href="https://www.law360.com/agencies/california-natural-resources-agency">California Department of Fish and Wildlife</a>.
Katherine Eskovitz of Eskovitz Law, representing Apothio, told Law360 on Thursday that the court allowed Apothio to file the amended complaint after partially denying the county defendants&#8217; motion to dismiss the case in April.
Apothio first accused the state DFW and local law enforcement in an <a href="https://www.law360.com/articles/1262969">April 2020</a> lawsuit of destroying 17 million hemp plants, ignoring the company&#8217;s status as an approved hemp research organization, while falsifying information to get a warrant to do so.
According to Wednesday&#8217;s amended complaint, evidence obtained through discovery includes Nicholson&#8217;s warrant affidavit, in which he misrepresented a settlement agreement between Apothio and Newbridge Global Ventures to say it indicated they had conspired to transport marijuana to California.
Nicholson did not provide the agreement to the court, Apothio wrote, saying the settlement instead stated the opposite and had Apothio demanding that Newbridge stop the illegal conduct that Newbridge had unilaterally engaged in.
Nicholson also misrepresented testing of Apothio&#8217;s crops in the affidavit, according to the complaint, which says the testing was unreliable and biased, facts that Nicholson omitted when he told the court.
According to the complaint, this led to a warrant that Nicholson and others used to justify the destruction in October 2019 of 500 acres of Apothio&#8217;s property, without any notice or opportunity to contest the action, because it grew &#8220;hot hemp,&#8221; or hemp with elevated levels of THC, to use in medicinal research.
Apothio also alleges a tape-recorded conversation with Nicholson has him stating, in regard to the plot to destroy the plants, &#8220;If you think this just stopped with me and my immediate boss, you are wrong. If you think it just stopped with him and his immediate boss, you&#8217;re wrong. This went all the way up to his chief, lawyers, my lawyers, my sheriff.&#8221;
&#8220;Now we know in detail the misleading information and material omissions KCSO intentionally provided to deceive the court to obtain a search warrant for cannabis, which search warrant KCSO then used as a guise to destroy legal hemp that was used for legally protected research into important medical conditions, including to treat a rare form of epilepsy in children,&#8221; Eskovitz told Law360 on Thursday.
She added that the evidence also shows that the Kern County Sheriff&#8217;s Office didn&#8217;t use a certified lab to test the hemp before bulldozing the crops, but instead self-tested the cannabis in the field, using officers who were not trained to do such testing.
&#8220;Defendants had already decided that they did not like that Apothio could legally grow hot hemp, so after improperly sampling and testing just 0.000212% of Apothio&#8217;s legal hemp plants without the use of any certified lab, they decided, in defendant KCSO Sheriff&#8217;s Sergeant Joshua Nicholson&#8217;s words: &#8216;Why not just mow it down?'&#8221; Apothio said in the complaint.
Representatives for Kern County and the state DFW declined to comment Thursday.
Apothio is represented by Kyle W. Roche, Edward Normand, Joseph M. Delich and Richard R. Cipolla of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a> and Katherine Eskovitz and Sean Eskovitz of Eskovitz Law.
Kern County and its sheriff&#8217;s office are represented in-house by Andrew C. Thomson and Kathleen Rivera.
The California Department of Fish and Wildlife is represented by Bruce D. McGagin, Ethan A. Turner, Stacey L. Roberts and Kelly T. Smith of the <a href="https://www.law360.com/agencies/california-attorney-general-s-office">California Attorney General&#8217;s Office</a>.
The case is Apothio LLC v. Kern County et al., case number <a href="https://www.law360.com/dockets/628f9e52bbeff8003144f725">1:20-cv-00522</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-eastern-district-of-california">U.S. District Court for the Eastern District of California</a>.
&#8211;Additional reporting by Diana Novak Jones and Grace Dixon. Editing by Janice Carter Brown.
https://www.law360.com/articles/1497404?e_id=f38d05a5-b7e6-4055-a225-23e6c2d00b51&#038;utm_source=engagement-alerts&#038;utm_medium=email&#038;utm_campaign=case_updates
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Law360 (May 26, 2022, 9:01 PM EDT) &#8212; A California cannabinoid research organization has filed an updated complaint in its suit alleging the Kern County Sheriff&#8217;s Office wrongly bulldozed $1 billion worth of ...

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 Partner Re awarded $11 million in damages for failed merger 

By Josh Liberatore
Law360 (May 26, 2022, 4:07 PM EDT) &#8212; As Entitle Direct Group&#8217;s largest shareholder, Partner Reinsurance Co. is entitled to $10.9 million in damages from RPM Mortgage Inc. over a failed merger between the mortgage company and Entitle, with a New York federal judge finding that RPM breached its contract by refusing to close the deal.
Following a lengthy bench trial in December 2021, U.S. District Judge Paul A. Engelmayer said in a Wednesday opinion that RPM and its CEO, Robert Hirt, &#8220;knew and recklessly disregarded&#8221; that they were breaching a merger agreement with Entitle when they failed to show up to the deal&#8217;s closing in June 2017.
&#8220;RPM and Hirt fabricated bogus justifications for not closing in order to avoid an agreement they had come to regret,&#8221; the judge wrote.
In the order&#8217;s findings-of-fact section, Judge Engelmayer rejected RPM&#8217;s arguments that Entitle&#8217;s worsening financial condition after it signed the merger agreement gave RPM license to back out of the deal.
Going in, RPM &#8220;knew Entitle was in weak financial condition and factored that into its negotiating position,&#8221; the judge said, adding that the merger agreement specifically excluded Entitle&#8217;s failure to meet financial estimates or projections as a material adverse effect that would allow RPM to legally exit the deal.
PartnerRe sued RPM in July 2018, seeking to recover damages incurred after RPM backed out of a February 2017 merger agreement to buy Entitle, a title insurance company. Entitle was forced to make a less attractive deal with another company, PartnerRe alleged, which cost Entitle &#8220;significant additional expenses&#8221; on top of what it spent setting up the RPM deal.
RPM urged the court to dismiss PartnerRe&#8217;s suit, saying the reinsurance company was not party to the planned merger, so it had no right to bring claims and seek compensation for its alleged injuries.
Partner argued that it served as a stockholder representative for Entitle, making it party to the abandoned deal.
In June 2020, Judge Engelmayer ruled that as Entitle&#8217;s largest shareholder, PartnerRe suffered injury because of RPM backing out of the deal, giving it standing to sue the mortgage company. Entitle also assigned its claims to PartnerRe after the failed merger, the judge noted.
A bench trial went on for nearly two weeks in December, with closing arguments heard in January. Eleven witnesses testified, including Hirt and executives from RPM, Entitle and PartnerRe, according to court documents.
On Wednesday, Judge Engelmayer detailed what he called RPM and Hirt&#8217;s numerous &#8220;bogus and pretextual&#8221; justifications for trying to get out of a deal they &#8220;had come to regret.&#8221; Those included peppering Entitle with demands for additional, nonrequired financial documents and calling into question Entitle&#8217;s relationship with the Ohio Department of Insurance, which oversaw the approval of the merger. RPM also sought to add a third company to the deal at the last minute, according to Judge Engelmayer&#8217;s order.
Those actions, the judge said, are enough evidence that RPM refused to close with the &#8220;knowledge or reckless disregard&#8221; that it was committing a material breach of the merger agreement, which was required for PartnerRe to prove breach of contract.
Hirt was also &#8220;repeatedly and explicitly warned&#8221; by PartnerRe&#8217;s counsel that RPM would be in breach by failing to close the deal as planned in June 2017, Judge Engelmayer noted. RPM&#8217;s chief operating officer further warned Hirt that the company could be found in breach for failing to close, Judge Engelmayer added.
The judge awarded PartnerRe just under $10.9 million in damages. Entitle would have received around $5.9 million more in cash had its merger with RPM gone through, the judge said, while PartnerRe&#8217;s expert calculated that the company&#8217;s minority equity interest in Entitle following the merger would have been worth about $4.9 million.
However, Judge Engelmayer found there to be no alter ego liability on the part of Hirt, RPM&#8217;s former president Tracey Hirt and the Hirt family trust. That&#8217;s because RPM was not a &#8220;single economic entity&#8221; that acted as a facade for the Hirts, but a &#8220;legitimate mortgage lender&#8221; that lasted for 20 years, Judge Engelmayer said. RPM&#8217;s successor entity, LendUS LLC, is also legitimate, the judge added.
Counsel for PartnerRe told Law360 on Thursday they were pleased with Judge Engelmayer&#8217;s ruling.
&#8220;The court&#8217;s extremely thorough opinion has vindicated PartnerRe&#8217;s entitlement to the full damages it sought for RPM&#8217;s bad-faith refusal to close under the parties&#8217; merger agreement,&#8221; said Amos Friedland of Roche Freedman LLP.
Counsel for and representatives of RPM/LendUS did not immediately respond to requests for comment Thursday.
PartnerRe is represented by Edward Normand, Amos Friedland, Nathan Holcomb, Jordana Haviv, Warren Li and Stephen Lagos of Roche Freedman LLP and by Rudolf Koch of Richards Layton &amp; Finger PA.
RPM and LendUS are represented by Steven L. Caponi, Justin H. Roeber and Thomas A. Warns of K&amp;L Gates LLP.
The case is Partner Reinsurance Co. Ltd. v. RPM Mortgage Inc. et al., case number 1:18-cv-05831, in the U.S. District Court for the Southern District of New York.
&#8211;Editing by Emma Brauer.

By Josh Liberatore
Law360 (May 26, 2022, 4:07 PM EDT) &#8212; As Entitle Direct Group&#8217;s largest shareholder, Partner Reinsurance Co. is entitled to $10.9 million in damages from RPM Mortgage Inc. over a failed merger between the mortgage company and...

Title Co. Investor Gets $10.9M For Failed Merger

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NEW YORK, Jan. 24, 2022 /PRNewswire/ &#8212; Roche Freedman LLP, a preeminent litigation boutique firm with offices in New York, Miami, and Boston, is pleased to announce the election of two new partners, Jordana Haviv and Constantine Economides, and the promotion of Alex Potter to Counsel.  These promotions became effective January 1, 2022. 
&#8220;We are thrilled to promote these phenomenal attorneys,&#8221; said Vel Freedman.  &#8220;They are bright, entrepreneurial, and creative and embody the types of attorneys we are looking for at Roche Freedman.&#8221;
&#8220;The Firm was built on the principle that by bringing creativity and collegiality to the practice of law, clients benefit from superior results,&#8221; Kyle Roche added. &#8220;Each of these attorneys have contributed to that vision and we look forward to having them at the firm for years to come.&#8221;
Jordana Haviv, who returns from parental leave in February 2022, is an experienced litigator with expertise in complex commercial, white collar, employment, and securities litigation; internal investigations; and international arbitration.  She has counseled and represented clients, on both the plaintiff and defense side, in sectors ranging from financial services to media and entertainment to education in a wide variety of matters in both federal and state court.  Jordana received her B.A. from Amherst College and her J.D. from New York University School of Law.  Following her graduation, Jordana served as a law clerk to the Hon. Victor Marrero of the United States District Court for the Southern District of New York.
Constantine Economides has wide-ranging litigation experience, with expertise in securities litigation, cannabis litigation, international litigation, and class actions. Over the past ten years, he has represented litigants in some of the most notable fraud-based disputes in United States history.  Constantine earned his B.A. from the University of California, Santa Barbara, his J.D. from The Ohio State University Moritz College of Law, and his LL.M from New York University School of Law.  Following his graduation, Constantine served as a law clerk to the Hon. William P. Dimitrouleas of the United States District Court for the Southern District of Florida.
Alex Potter is a litigator with broad experience in high-stakes commercial litigation and arbitration at both the trial and appellate levels. Alex has litigated several cases worth hundreds of millions of dollars from inception through trial before AAA and ICC tribunals and in federal and state courts, often involving complex issues of foreign law.  He has also assisted in briefing numerous cases before the U.S. Supreme Court, both on behalf of parties and amici curiae.  Alex earned his B.A. from Witman College and his J.D. from the University of Pennsylvania Law School.  Following his graduation, Alex served as a law clerk to the Hon. Thomas N. O&#8217;Neill Jr. of the United States District Court for the Eastern District of Pennsylvania.
About Roche Freedman Roche Freedman (<a href="https://c212.net/c/link/?t=0&amp;l=en&amp;o=3421840-1&amp;h=3796108686&amp;u=http%3A%2F%2Fwww.rochefreedman.com%2F&amp;a=www.rochefreedman.com" target="_blank" rel="nofollow noopener">www.rochefreedman.com</a>) is a premier litigation boutique founded in 2019 to lead its clients&#8217; most challenging commercial disputes and litigate some of the nation&#8217;s most complex and cutting-edge litigations.
Media Contact: Kyle Roche, kyle@rochefreedman.com
SOURCE Roche Freedman LLP

NEW YORK, Jan. 24, 2022 /PRNewswire/ &#8212; Roche Freedman LLP, a preeminent litigation boutique firm with offices in New York, Miami, and Boston, is pleased to announce the election of two new partners, Jordana Haviv and Constantine Economides, and the ...

Roche Freedman Announces Partner and Counsel Promotions for 2022

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Self-Described Bitcoin Creator Must Pay $100 Million in Suit

Miami Federal Jury Awards Plaintiff $100M in Dispute Over $50B in Bitcoin

The Verdict Is In: ‘Faketoshi’ Craig Wright To Pay $100 Million In Landmark Bitcoin Lawsuit

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<div id="article-body">Law360, Miami (November 23, 2021, 9:03 PM EST) &#8212; Jurors began deliberating Tuesday in the multibillion-dollar dispute between self-professed bitcoin inventor Craig Wright and the estate of computer forensic expert Dave Kleiman over whether the two had a business partnership to mine bitcoin.
The Miami federal jury is tasked with determining whether Wright stole assets from the company he and Kleiman formed in 2011, called W&amp;K Info Defense Research LLC, and hid them from Kleiman&#8217;s estate after his death in 2013.
In closing arguments Tuesday, Vel Freedman, who represents Dave Kleiman&#8217;s brother Ira Kleiman, took jurors through the emails and other documents they&#8217;d seen throughout the three-week trial to urge them to find for his client and award tens of billions of dollars in damages.
Freedman said Wright repeatedly referred to Dave Kleiman as a business partner after his death and told Ira Kleiman that his brother had been a key part in the creation of bitcoin, but Wright changed his story later once the lawsuit was filed and began saying Dave Kleiman had been no more than a good friend.
&#8220;The defense has made a big deal about the fact that there is no written agreement, but the law doesn&#8217;t require that,&#8221; Freedman said. &#8220;They wrote nothing down except when they hired employees. So it&#8217;s no surprise these best friends didn&#8217;t have a written partnership.&#8221;
The Australian-born Wright, who is the chief scientist at blockchain company nChain, claims to be Satoshi Nakamoto, the pseudonymous author of the white paper released in October 2008 that described what would later become bitcoin.
At issue in the case are the 1.1 million bitcoins that were mined by Satoshi Nakamoto, as well as intellectual property related to bitcoin software.
Freedman says the evidence shows those bitcoins were mined by Wright and Dave Kleiman and held in a joint trust, and asked the jurors to award his client money damages equivalent to 555,055 bitcoins. That would be between $33 billion and $35.7 billion, depending on the price of bitcoin used. The jury was instructed to use the peak price of bitcoin for the conversion and civil theft counts, the current price for the breach of partnership count and the price at the time of the alleged fraud for the fraud count.
The plaintiffs also asked for $126 billion in damages for half of the intellectual property that was owned by W&amp;K, which was moved to Wright&#8217;s control through a pair of civil suits in Australia that Wright filed after Dave Kleiman&#8217;s death. The $126 billion figure is half of the $252 billion that Wright said was the overall value of the IP involved in the case in a Slack message posted just two days before the trial began.
Freedman also suggested to the jury that they award $17 billion in punitive damages.
&#8220;He could&#8217;ve done the right thing by his best friend, could have made sure his share of the partnership assets made their way into the estate,&#8221; Freedman said. &#8220;Dr. Wright chose not to, and now you all get to choose whether he gets away with it.&#8221;
In his closing arguments, Wright&#8217;s attorney Andrés Rivero said the plaintiffs&#8217; case just doesn&#8217;t make sense. It relies heavily on statements made by Wright, but at the same time, Ira Kleiman paints Wright as a liar who constantly contradicted himself and a forgerer who repeatedly submits manipulated documents, the attorney said.
You can&#8217;t call someone a liar and then build your case around that person&#8217;s statements, Rivero said.
&#8220;What they talked to you about was the statements of Craig Wright and about the forgeries of Craig Wright,&#8221; he said. &#8220;That&#8217;s the only thing they put in front of you. That&#8217;s how they bake the cherry pie. But if a person is a liar, you discard it, you don&#8217;t use that information.&#8221;
The statements Ira Kleiman relies on to make his case are all statements Wright made after Dave Kleiman&#8217;s death, but there are no communications between the two while Dave Kleiman was still alive that would indicate they were mining bitcoins together, Rivero said. With other business partners, Dave Kleiman put together written operating agreements and discussed business details over email, the attorney said. But not so with Wright.
In his rebuttal, Freedman pointed to evidence showing the partners kept their bitcoin project secret, noting that Wright didn&#8217;t even share any of it with his then-wife Lynn Wright, who testified that she first heard of Satoshi Nakamoto in 2012 when her sister-in-law shared an article with her.
Freedman also played clips of Wright&#8217;s deposition testimony in 2019, when he said that he communicated with Dave Kleiman through digital chats, video chats and other online communications that were private and left no record. He also testified that when he was outed in December 2015 as Satoshi Nakamoto, he did his best to wipe out any evidence of his work on bitcoin.
The jurors deliberated for just over two hours before stopping for the day at 5 p.m. They will continue their deliberations after the Thanksgiving holiday, on Monday morning.
Ira Kleiman is represented by Devin Freedman, Joseph M. Delich, Kyle Roche, Constantine Philip Economides and Stephen Lagos of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, and Maxwell V. Pritt, Andrew Scott Brenner, Laselve Elijah Harrison and Stephen N. Zack of <a href="https://www.law360.com/firms/boies-schiller">Boies Schiller Flexner LLP</a>.
Wright is represented by Andrés Rivero, Jorge A. Mestre, Michael A. Fernández, Alan H. Rolnick, Amanda Marie McGovern, Daniela Tenjido Sierra, Schneur Zalman Kass and Zaharah R. Markoe of <a href="https://www.law360.com/firms/rivero-mestre">Rivero Mestre LLP</a>.
The case is Kleiman v. Wright, case number <a href="https://www.law360.com/dockets/619baabc4a31420129e7ea64">9:18-cv-80176</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-florida">U.S. District Court for the Southern District of Florida</a>.
&#8211;Editing by Marygrace Anderson.</div>

By Carolina Bolado ·
Law360, Miami (November 23, 2021, 9:03 PM EST) &#8212; Jurors began deliberating Tuesday in the multibillion-dollar dispute between self-professed bitcoin inventor Craig Wright and the estate of computer forensic expert Dave Kleiman o...

Bitcoin Trial Jurors Mull Claims &#8216;Inventor&#8217; Stole, Hid Assets

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Bitcoin Creator Satoshi Nakamoto Could Be Unmasked at Florida Trial

MIAMI, FLORIDA, UNITED STATES, November 8, 2021 /<a dir="auto" href="http://www.einpresswire.com/" target="_blank" rel="external nofollow noopener">EINPresswire.com</a>/ &#8212; In an order dated September 23, 2021, the Honorable Rodney Smith of the United States District Court for the Southern District of Florida denied in part a motion to dismiss in Hartel v. The GEO Group, Inc. et al., No. 9:20-cv-81063-RS.
GEO is an equity real estate investment trust specializing in the design, financing, development, and operation of secure facilities, processing centers, and community reentry centers in the United States, Australia, South Africa, and the United Kingdom. The case alleges that from November 7, 2018 through August 5, 2020, GEO and CEO George C. Zoley violated the Securities Exchange Act of 1934 and made false and misleading statements regarding, inter alia, pending lawsuits in which the Company was involved. Defendants’ false and misleading statements had their intended effect, causing GEO’s stock price to trade at artificially inflated levels throughout the Class Period.
In denying defendants’ motion to dismiss with respect to their statements about pending lawsuits, including the lawsuits not having “a material adverse effect on its financial condition, results of operations, or cashflows”, the court found that “Plaintiffs have adequately pled that Defendants knew these statements were false when made” based on Defendant Zoley’s May 30, 2019 letter to U.S. Immigration and Customs Enforcement (“ICE”) which characterized “the lawsuits as a ‘potentially catastrophic risk’ that exposed the Company to ‘tens of millions’ in potential damages and up to $20 million in legal expenses.” The Court relied on that same letter in finding that “Plaintiffs have adequately pled scienter as to GEO’s statements about the potential costs of the lawsuits against GEO.” Indeed, the Court noted that Defendant Zoley “was the one who reach out to ICE about the costs and potential liability arising from the lawsuits” and thus “had the requisite power to directly or indirectly control or influence the policies relating to the lawsuits.”
Roche Freedman attorneys Velvel (Devin) Freedman, Ivy T. Ngo, and Constantine P. Economides and Levi Korsinsky attorneys Nicholas I. Porritt and Adam M. Apton obtained this result on behalf of the class.
Hartel v. The GEO Group, Inc. et al., Case No.20-81063-CIV-SMITH, Memorandum (S.D. Fl. Sep. 23, 2021).
If you are a shareholder who purchased GEO securities during the Class Period and have any questions or would like more information about the litigation, you may contact Adam Apton at aapton@zlk.com or 202.524.4859 or Devyn R. Glass at dglass@rochefreedman.com or 646.823.1546.
<div class="sv-heading">NEWS PROVIDED BY</div>
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<div class="sv-date">November 08, 2021, 18:21 GMT</div>

MIAMI, FLORIDA, UNITED STATES, November 8, 2021 /EINPresswire.com/ &#8212; In an order dated September 23, 2021, the Honorable Rodney Smith of the United States District Court for the Southern District of Florida denied in part a motion to dismiss in Hart...

Roche Freedman and Levi &#038; Korsinsky Defeat Motion to Dismiss in Private Prison Securities Class Action

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<div id="article-body">Law360, Miami (November 10, 2021, 7:22 PM EST) &#8212; A Florida federal judge ruled Wednesday that jurors can be shown comments that self-professed bitcoin inventor Craig Wright has made online about the trial, on a day that was cut short after a juror said she had a fever and needed to go home.
U.S. District Judge Beth Bloom agreed to allow several comments Wright has made on the digital communication platform Slack into evidence, despite protests from his attorneys that he believed he was speaking on a private channel.
Wright&#8217;s attorney Amanda McGovern told the court that had they known that attorneys for Ira Kleiman — who claims his deceased brother Dave Kleiman was Wright&#8217;s business partner and his estate was bilked out of billions of dollars&#8217; worth of bitcoins — were monitoring the Slack channel, they would have properly warned Wright against making statements about the case.
&#8220;I think that&#8217;s something most litigants know not to do,&#8221; Judge Bloom said.
Among the new evidence is a comment from Wright where he said the full value of the bitcoin-related intellectual property he owns, which is at issue in the case, is $252 billion. She also allowed several statements that the plaintiffs said they would use for impeachment purposes.
Judge Bloom did reject an attempt to introduce comments in which Wright compared Ira Kleiman to Milton, the stapler-obsessed character from &#8220;Office Space.&#8221; She said the animosity between the two parties is not relevant to the case.
Ira Kleiman claims that after his brother&#8217;s death in 2013, Wright told him Dave Kleiman had been a key part of the creation of bitcoin. The Australian-born Wright, who is the chief scientist at blockchain company nChain, claims to be Satoshi Nakamoto, the pseudonymous author of the white paper released in October 2008 that described a &#8220;peer-to-peer version of electronic cash&#8221; that would later become bitcoin.
Ira Kleiman also maintains that Wright and Dave Kleiman their mined bitcoins together through a Florida-based company they created in 2011 called W&amp;K Info Defense Research LLC. Wright denies this, saying he and Dave Kleiman were merely friends, not business partners.
On Wednesday, Ira Kleiman&#8217;s attorney Devin Freedman presented documents from the Australian Taxation Office that said Wright had submitted two emails that were either forged or altered in response to an investigation into his companies.
Wright told jurors he had been hacked and that the ATO auditor was eventually fired. He says he hired forensic experts to go through his companies&#8217; files and presented their reports to the ATO, which rejected them because, according to the ATO&#8217;s documents, they still showed that the emails were fabricated.
Jurors were also shown a July 2015 letter from the law firm that had been representing Wright and his companies in the ATO proceedings terminating their contract because of &#8220;serious questions about the integrity of documents provided by Dr. Craig Wright, both to our office and to the ATO.&#8221;
Wright responded that the law firm, <a href="https://www.law360.com/firms/clayton-utz">Clayton Utz</a>, frequently worked in front of the ATO and that the firm&#8217;s attorney, Andrew Sommer, was under pressure to drop him as a client.
Wright called the ATO investigation a &#8220;witch hunt&#8221; and said the constant audits forced him to shut down his companies. He said he went through more than 200 audits in a five-year period.
Wright, who has been on the stand since Monday afternoon, continued testifying until after lunch, when Juror No. 7 reported that she had a fever and needed to go home. The parties opted to adjourn for the long weekend and resume on Monday morning as planned rather than excuse the juror.
Ira Kleiman sued Wright in February 2018, claiming that after his brother&#8217;s death, Wright schemed to steal 1.1 million bitcoins and intellectual property related to bitcoin software. The bitcoins were valued at more than $10 billion when the suit was filed but are worth six times that now.
Ira Kleiman argues that Wright breached an oral partnership agreement to mine bitcoins and develop bitcoin-related technology when he cut Dave Kleiman out of any assets from the partnership — a partnership that Wright maintains did not exist.
Ira Kleiman is represented by Devin Freedman, Joseph M. Delich, Kyle Roche, Constantine Philip Economides and Stephen Lagos of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, and Maxwell V. Pritt, Andrew Scott Brenner, Laselve Elijah Harrison and Stephen N. Zack of <a href="https://www.law360.com/firms/boies-schiller">Boies Schiller Flexner LLP</a>.
Wright is represented by Andrés Rivero, Jorge A. Mestre, Michael A. Fernández, Alan H. Rolnick, Amanda Marie McGovern, Daniela Tenjido Sierra, Schneur Zalman Kass and Zaharah R. Markoe of <a href="https://www.law360.com/firms/rivero-mestre">Rivero Mestre LLP</a>.
The case is Kleiman v. Wright, case number <a href="https://www.law360.com/cases/5a85b578f209942345000002">9:18-cv-80176</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-florida">U.S. District Court for the Southern District of Florida</a>.
&#8211;Editing by Adam LoBelia.</div>

By Carolina Bolado
Law360, Miami (November 10, 2021, 7:22 PM EST) &#8212; A Florida federal judge ruled Wednesday that jurors can be shown comments that self-professed bitcoin inventor Craig Wright has made online about the trial, on a day that was cut sh...

Bitcoin &#8216;Inventor&#8217;s&#8217; Online Comments Admitted In Trial

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 " data-original-title="">Carolina Bolado</a>
<div id="article-body">Law360, Miami (November 8, 2021, 9:01 PM EST) &#8212; Attorneys for deceased computer programmer Dave Kleiman on Monday hammered self-professed bitcoin inventor Craig Wright with documents in which he described Kleiman as his business partner despite his claims in multibillion-dollar litigation that the two were just friends.
Wright took the stand in Miami federal court and tried to explain and rebut — or outright deny — the affidavits, transcripts, emails and statements put forth by Vel Freedman, who represents Kleiman&#8217;s brother Ira Kleiman.
Ira Kleiman, the executor of Dave Kleiman&#8217;s estate, claims Wright bilked the estate out of billions of dollars&#8217; worth of bitcoins.
At one point, when presented with a transcript of an interview by the Australian Taxation Office in August 2014, Wright called the document an &#8220;invalid piece of paper&#8221; and said the interview never happened at the ATO office as stated in the transcript.
&#8220;This document is not an accurate transcript,&#8221; Wright said. &#8220;It was rejected by the lawyers. The tax office never sent another one.&#8221;
Ira Kleiman claims that after his brother&#8217;s death in 2013, Wright told him Dave Kleiman had been a key part of the creation of bitcoin. The Australian-born Wright, who is the chief scientist at blockchain company nChain, claims to be Satoshi Nakamoto, the pseudonymous author of the white paper released in October 2008 that described a &#8220;peer-to-peer version of electronic cash&#8221; that would later become bitcoin.
Ira Kleiman also maintains that Wright and his brother mined bitcoins together through a Florida-based company they created in 2011 called W&amp;K Info Defense Research LLC.
At trial on Monday, Freedman showed Wright a declaration he made in 2018 in the current litigation stating that he had &#8220;never been a director, member, shareholder, officer, employee or representative of W&amp;K or of any Florida business.&#8221;
But Freedman then presented Wright with a sworn affidavit filed in an Australian court — where Wright had filed two suits against W&amp;K seeking $56 million — stating that he and Dave Kleiman each owned 50% of W&amp;K.
Wright told the jury that when he filed those affidavits, he was acting on behalf of his ex-wife Lynn Wright, who was the shareholder in the company.
&#8220;I was standing in the shoes of Lynn Wright, who was standing in the shoes of W&amp;K,&#8221; he said.
He later told the Australian court registrar that he was the sole director for the company. Wright eventually got consent judgments that transferred the intellectual property owned by W&amp;K to his entities in Australia.
Freedman also showed the jury a short video of Wright&#8217;s deposition, in which he vehemently denied ever partnering with anyone.
&#8220;[Dave Kleiman] was never my partner. He was just a friend,&#8221; Wright said in the deposition. &#8220;I have never formed a partnership. I will never form a partnership. I hate the whole concept of partnership. I will never be a partner. The only partner I have is my wife.&#8221;
But jurors then saw text messages in which Wright referred to Dave Kleiman as his business partner, as well as a statement to the New South Wales police in which he referred to &#8220;my business partner David Kleiman.&#8221;
In the 2014 ATO transcript Wright rejects, he states, &#8220;I had an agreement with Dave.&#8221;
When presented with an email in which he told Ira Kleiman that he and Dave Kleiman had been partners, he looked to Ira Kleiman in the courtroom.
&#8220;I got catfished by that man over there and I didn&#8217;t respond very well,&#8221; Wright said.
Earlier in the day, jurors heard from Scottish journalist and novelist Andrew O&#8217;Hagan, the author of a longform piece titled &#8220;The Satoshi Affair&#8221; published in the London Review of Books in June 2016, in which he wrote about Wright&#8217;s claim that he is the inventor of bitcoin. O&#8217;Hagan testified about his reporting for the piece, which included statements that Wright told him Dave Kleiman was the man who helped him do Satoshi Nakamoto&#8217;s work.
The plaintiffs&#8217; team also read from the transcript of the deposition of Wright&#8217;s wife, Ramona Watts. A lawyer read Watts&#8217; responses into the record as another attorney repeated the questions she had been asked in the deposition.
Watts testified that Wright has Asperger&#8217;s syndrome, which often makes it difficult for others to understand him.
&#8220;I have trouble with him all the time,&#8221; she said. &#8220;It has taken 10 years for him to look me in the eye when he talks to me.&#8221;
She said Dave Kleiman did some editing for Wright, but she never heard Wright refer to his friend as a business partner.
&#8220;Craig has used the term partner very, very loosely,&#8221; she said. &#8220;I think he would consider his best friend a partner.&#8221;
Watts testified that her husband had meant for Dave Kleiman to be director of Coin-Exch Pty. Ltd., through which Wright planned to offer exchanges and trades between bitcoins and Australian dollars, as well as other currencies. Wright had offered Dave Kleiman shares in Coin-Exch in exchange for some work for the new company, but he died before finishing the work, according to Watts.
Watts said Wright offered Ira Kleiman shares in the company after his brother&#8217;s death, but he did not want shares. He wanted to cash out, and he wanted to do so while avoiding paying taxes, she said.
&#8220;He wanted the money, and he wanted it right away,&#8221; Watts said. &#8220;We made him an offer, he said it wasn&#8217;t enough, we made him another offer and it was not enough. I remember not having a very good impression of Ira.&#8221;
Ira Kleiman sued Wright in February 2018, claiming that after Dave Kleiman&#8217;s death, Wright schemed to steal 1.1 million bitcoins and intellectual property related to bitcoin software. The bitcoins were valued at more than $10 billion when the suit was filed but are worth six times that amount now.
Ira Kleiman argues that Wright breached an oral partnership agreement to mine bitcoins and develop bitcoin-related technology when he cut Dave Kleiman out of any assets from the partnership — a partnership that Wright maintains did not exist.
Wright will continue testifying on Tuesday.
Ira Kleiman is represented by Devin Freedman, Joseph M. Delich, Kyle Roche, Constantine Philip Economides and Stephen Lagos of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, and Maxwell V. Pritt, Andrew Scott Brenner, Laselve Elijah Harrison and Stephen N. Zack of <a href="https://www.law360.com/firms/boies-schiller">Boies Schiller Flexner LLP</a>.
Craig Wright is represented by Andrés Rivero, Michael A. Fernández, Alan H. Rolnick, Amanda Marie McGovern, Daniela Tenjido Sierra, Schneur Zalman Kass and Zaharah R. Markoe of <a href="https://www.law360.com/firms/rivero-mestre">Rivero Mestre LLP</a>, and Whitney Lohr of <a href="https://www.law360.com/firms/kurzban-kurzban">Kurzban Kurzban Tetzeli &amp; Pratt PA</a>.
The case is Kleiman v. Wright, case number <a href="https://www.law360.com/cases/5a85b578f209942345000002">9:18-cv-80176</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-florida">U.S. District Court for the Southern District of Florida</a>.
&#8211;Editing by Robert Rudinger.</div>

By Carolina Bolado
Law360, Miami (November 8, 2021, 9:01 PM EST) &#8212; Attorneys for deceased computer programmer Dave Kleiman on Monday hammered self-professed bitcoin inventor Craig Wright with documents in which he described Kleiman as his business p...

Bitcoin &#8216;Inventor&#8217; Struggles To Explain Conflicting Evidence

Mystery of Who Invented Bitcoin Hangs Over Scientist’s Trial

Kleiman v. Wright: Bitcoin’s Trial of the Century Kicks Off in Miami

$69 billion in Bitcoin is at the center of Miami crypto court fight

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<div id="article-body">Law360, Miami (October 29, 2021, 8:46 PM EDT) &#8212; A multibillion-dollar battle between the purported inventor of bitcoin and the estate of a deceased computer forensics expert kicks off Monday in Miami, where a federal jury will be asked to determine the nature of the two men&#8217;s partnership in a trial that could shed some light on the murky origins of the cryptocurrency.
At issue are 1.1 million bitcoins and intellectual property related to bitcoin software that Ira Kleiman, the brother of deceased software developer Dave Kleiman, says self-professed bitcoin inventor Craig Wright schemed to steal since Kleiman&#8217;s death in 2013. The bitcoins were valued at more than $10 billion in February 2018 when the suit was filed, but are worth approximately $69 billion now. 
Ira Kleiman is expected to tell the jury that Wright breached an oral partnership agreement to mine bitcoins and develop bitcoin-related technology when he cut Dave Kleiman out of any assets from the partnership — a partnership that Wright maintains did not exist.
The Australian-born Wright, who is the chief scientist at blockchain company nChain, claims to be Satoshi Nakamoto, the pseudonymous author of the 2008 white paper that laid out a &#8220;peer-to-peer version of electronic cash [that] would allow online payments to be sent directly from one party to another without going through a financial institution&#8221; — what would later be developed as bitcoin. New bitcoins are created, or &#8220;mined,&#8221; by solving complex computational puzzles.
That Wright and Dave Kleiman were friends is undisputed. The question is whether they also had a business partnership that would entitle Kleiman&#8217;s estate to the bitcoin assets. Ira Kleiman argues that the two had a deal to mine bitcoins together and points to statements Wright made after Dave Kleiman&#8217;s death about how Kleiman helped Wright craft the white paper.
But while Ira Kleiman says his brother helped develop bitcoin with Wright, Wright argues that it was his invention and that Dave Kleiman&#8217;s help was minimal.
&#8220;Before litigation he claimed that [Dave] Kleiman was his partner,&#8221; Ira Kleiman&#8217;s attorney Devin &#8220;Velvel&#8221; Freedman told Law360. &#8220;Plaintiffs don&#8217;t contend that Wright is not Satoshi. We say he was half, while defendants say he was whole.&#8221;
Wright, who has called the suit a &#8220;shakedown,&#8221; says there is nothing indicating he and Dave Kleiman had this type of business arrangement. They did co-found a company, W&amp;K Info Defense Research LLC, in 2011 in the hopes of leveraging Kleiman&#8217;s status as a military veteran to secure government homeland security contracts. Ira Kleiman says it was through this company that his late brother and Wright agreed to mine bitcoin, but Wright argues that there&#8217;s no evidence to that effect.
Counsel for Wright declined to comment before trial.
The case is one of several in which Wright has asserted his claim that he is Nakamoto. In the United Kingdom, Wright has filed lawsuits against bitcoin developers to help him recover potentially stolen cryptocurrency and sued to enforce the copyright of the white paper.
Listed as a potential witness in the Miami case is Scottish journalist Andrew O&#8217;Hagan, who published an essay titled &#8220;The Satoshi Affair&#8221; in the London Review of Books in June 2016 on what happened shortly after parallel investigations in late 2015 by Wired and Gizmodo suggested that Wright was the inventor of bitcoin. In the essay, O&#8217;Hagan writes that Wright asked Dave Kleiman to sign an agreement to hold 1.1 million bitcoin for him that would be returned to Wright in January 2020, but there is no evidence Kleiman ever took custody of the bitcoin.
O&#8217;Hagan also reported that Wright told him Dave Kleiman carried a hard drive on him with 350,000 bitcoin that they had mined. But when he died in his mid-40s, no family members had the passwords to access Kleiman&#8217;s various hard drives with his bitcoin holdings.
What happened to those hard drives is expected to come up in Wright&#8217;s defense, as he claims that Ira Kleiman failed to mitigate damage when he erased and overwrote many of his late brother&#8217;s hard drives and threw away his papers, destroying information that could have given him access to any bitcoin Dave Kleiman held.
For his part, Ira Kleiman, plans to tell jurors that Wright has lied under oath and forged various documents submitted in his defense, including a list of his purported bitcoin holdings and documents that made it appear Dave Kleiman signed away ownership of W&amp;K Info Defense Research. Ira Kleiman had pushed for sanctions, but U.S. District Judge Beth Bloom declined the request last year and said the concerns are best addressed by a jury.
Wright has said that he never set out to intentionally deceive the court, pointing to an autism diagnosis he received. Among the witnesses he intends to call is a medical expert to testify about how the diagnosis affects his statements and actions.
For Ira Kleiman, part of the challenge will be proving that Wright has control over the bitcoin at issue in order to win on his conversion claim, according to Josh Migdal, a litigator at <a href="https://www.law360.com/firms/mark-migdal-hayden">Mark Migdal &amp; Hayden</a> who is not involved in the case. Kleiman argues that Wright controls the bitcoins, while Wright says he has not been able to access them.
&#8220;They&#8217;re going to have to articulate to a jury as to how bitcoin is kept and based on how it&#8217;s kept, what they can show through circumstantial evidence, because he&#8217;s obviously denying that he controls it,&#8221; Migdal said. &#8220;It&#8217;s going to provide interesting factual predicates as to other cases down the road to show how a jury can be convinced that there is appropriate evidence of somebody having the ability to show ownership of bitcoin.&#8221;
He added that under Florida law, in order to establish a claim for conversion of money, one needs to show that it is specific and identifiable.
&#8220;It&#8217;ll be interesting to see if in this trial bitcoin is viewed the same way as money,&#8221; Migdal said. &#8220;I think they&#8217;re probably going to say that it&#8217;s property other than money, because I think it might be hard for a federal court to agree that bitcoin is money.&#8221;
Brian Klein, a litigator and blockchain expert at law firm <a href="https://www.law360.com/firms/waymaker">Waymaker</a>, said the district judge won&#8217;t have much case law to guide her on a number of issues, including how to value the bitcoin, whether at the time of the deal, the time of the filing of the suit or present-day value. If the jury opts to give Ira Kleiman a win, valuation will be a hotly contested issue, given the volatility of the price of bitcoin.
&#8220;That is going to potentially be an issue that this court has to decide depending on how the case shakes out,&#8221; said Klein, who is not involved in the suit.
Both Ira Kleiman and Wright are expected to take the stand during the trial, which is anticipated to run from Nov. 1 until just before Thanksgiving. Other witnesses include software developers, computer forensics experts and cryptocurrency experts who will have to explain how bitcoin works to jurors who may not be familiar with cryptocurrency, although Klein says this is an easier task now than when the suit was filed in 2018. 
&#8220;I think when this case started, it would&#8217;ve been more of an uphill battle to explain bitcoin to a jury, but as of today, the level of person-on-the-street knowledge has risen dramatically,&#8221; he said. &#8220;The number of people who own bitcoin has risen is way up, and the media attention is not limited to niche publications. I think you&#8217;re going to get a jury that has a much better understanding of bitcoin.&#8221;
Ira Kleiman is represented by Devin Freedman, Joseph M. Delich, Kyle Roche, Constantine Philip Economides and Stephen Lagos of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a> and Maxwell V. Pritt, Andrew Scott Brenner, Laselve Elijah Harrison and Stephen N. Zack of <a href="https://www.law360.com/firms/boies-schiller">Boies Schiller Flexner LLP</a>.
Craig Wright is represented by Andres Rivero, Michael A. Fernandez, Alan H. Rolnick, Amanda Marie McGovern, Daniela Tenjido Sierra, Schneur Zalman Kass and Zaharah R. Markoe of <a href="https://www.law360.com/firms/rivero-mestre">Rivero Mestre LLP</a> and Whitney Lohr of <a href="https://www.law360.com/firms/kurzban-kurzban">Kurzban Kurzban Tetzeli &amp; Pratt PA</a>.
The case is Kleiman v. Wright, case number <a href="https://www.law360.com/cases/5a85b578f209942345000002">9:18-cv-80176</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-florida">U.S. District Court for the Southern District of Florida</a>.
&#8211;Editing by Jill Coffey.
 
</div>

By Carolina Bolado
Law360, Miami (October 29, 2021, 8:46 PM EDT) &#8212; A multibillion-dollar battle between the purported inventor of bitcoin and the estate of a deceased computer forensics expert kicks off Monday in Miami, where a federal jury will be ...

Fla. Bitcoin Trial May Mine Origins Of The Cryptocurrency

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<div id="article-body">Law360 (October 26, 2021, 6:10 PM EDT) &#8212; The founder of blockchain platform Ava Labs can pursue defamation claims against a cryptocurrency marketer and &#8220;thought leader&#8221; over comments he made on social media, a Florida federal court has found.
Emin Gün Sirer, a <a href="https://www.law360.com/companies/cornell-university">Cornell University</a> professor and founder and CEO of Ava Labs, can go forward with his defamation claim and push for punitive damages, over the objections of social media influencer Emre Aksoy, U.S. District Judge Beth Bloom said Monday. Aksoy markets various digital assets on social media platforms such as Telegram and <a href="https://www.law360.com/companies/youtube-inc">YouTube</a> and dispenses cryptocurrency investing advice, according to Sirer&#8217;s complaint.
Sirer sued Aksoy in June, saying that Aksoy had posted a video on his YouTube channel that falsely claimed Sirer, a Turkish citizen, belonged to a political group that has been designated a terrorist organization in Turkey.
According to the complaint, Aksoy knew the statements were false and knew they could harm Sirer, who said the statements hurt his reputation and threatened the safety of himself and his family. That&#8217;s enough to survive a motion to dismiss, Judge Bloom found.
&#8220;Taken as true, this allegation is sufficient to plausibly state that [Aksoy] acted with actual malice,&#8221; the order said.
Sirer alleged that companies pay Aksoy to promote their digital assets, and that one of the projects he was promoting was a competitor to Ava Labs. Days after the contested YouTube video, Aksoy told followers to short AVAX, the digital token associated with Ava Labs, according to the complaint.
Judge Bloom found that the court does have jurisdiction over Aksoy, who lives in Turkey but was served with the lawsuit at the <a href="https://www.law360.com/agencies/miami-international-airport">Miami International Airport</a> while traveling to Miami for vacation. Judge Bloom also rejected Aksoy&#8217;s argument that his social media activities make him a &#8220;media defendant,&#8221; which would have entitled him to receive notice in writing before the suit was filed.
&#8220;[Aksoy] asserts that his use of various internet platforms to disseminate information and receive real-time revision and feedback qualifies him as a &#8216;media defendant,'&#8221; the order said. &#8220;The court is unconvinced that simply because [Aksoy] uses various internet platforms to share information and receive real-time feedback, the court should extend the interpretation of &#8216;media defendant&#8217; to include him.&#8221;
Sirer is seeking compensatory damages and punitive damages, as well as a court order preventing Aksoy from repeating the allegedly defamatory claims and requiring him to remove them from his social media channels.
Sirer&#8217;s counsel at <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a> hailed the decision in a statement to Law360 on Tuesday, saying that Aksoy&#8217;s statements, though disseminated online, &#8220;put our client in real danger, in the real world, and they caused real economic harm.&#8221;
&#8220;Some people think of crypto as the Wild West, but this case should serve as a warning to online influencers who are paid promoters. You can still be held accountable for the words you use on social media,&#8221; Roche Freedman&#8217;s Kyle Roche said.
Counsel for Aksoy did not immediately respond to a request for comment Tuesday.
Sirer is represented by Devin (Velvel) Freedman, Kyle Roche and Joseph Delich of Roche Freedman LLP.
Aksoy is represented by Rook Elizabeth Ringer of <a href="https://www.law360.com/firms/lento-law-group">Lento Law Group PC</a>.
The case is Emin Gün Sirer v. Emre Aksoy, case number <a href="https://www.law360.com/dockets/6176d3bc75e53b16f1fd6066">1:21-cv-22280</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-florida">U.S. District Court for the Southern District of Florida</a>.
&#8211;Editing by Kelly Duncan.
 
</div>

By Elise Hansen
Law360 (October 26, 2021, 6:10 PM EDT) &#8212; The founder of blockchain platform Ava Labs can pursue defamation claims against a cryptocurrency marketer and &#8220;thought leader&#8221; over comments he made on social media, a Florida fed...

Crypto &#8216;Thought Leader&#8217; Can&#8217;t Duck CEO&#8217;s Defamation Claims

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<div id="article-body">Law360 (October 26, 2021, 8:58 PM EDT) &#8212; Retail investors can now bet on litigation finance via a blockchain-based token offering — a so-called initial litigation offering — that will fund hemp company Apothio while it battles a California county in federal court, according to a Tuesday announcement.
Indiana-based Apothio LLC and its counsel, <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, are hoping to raise up to $5 million for Apothio while it pursues a lawsuit alleging California&#8217;s Department of Fish and Wildlife <a href="https://www.law360.com/articles/1343108">illegally bulldozed </a>hundreds of acres of hemp crops on one of its farms. Investors in the tokens will have an interest in proceeds Apothio may win from the suit, according to regulatory filings.
The initial litigation offering, or ILO, is proceeding under crowdfunding rules and is available to retail investors on Republic, an online platform that curates investment opportunities in startups, cryptocurrency companies, gaming and real estate, according to its website. Republic called the offering the first &#8220;tokenized litigation funding.&#8221;
&#8220;The Apothio ILO represents an opportunity to invest in the same kind of assets that a litigation funder would have in its portfolio,&#8221; Republic&#8217;s website said, adding that the Apothio investment may be riskier since litigation funds frequently invest in a portfolio of cases.
Apothio said in regulatory filings it&#8217;s planning to sell a minimum of $250,000 worth of the litigation tokens, with a minimum individual investment amount of $100. The investment window is open until Jan. 1. The tokens will not be freely tradable until one year after purchase, according to regulatory filings.
The tokens are hosted on the Avalanche blockchain, which is associated with blockchain startup Ava Labs, the filings said.
Investors will receive one ILO token for each dollar invested. Should Apothio&#8217;s suit be successful, they&#8217;ll get back a &#8220;multiplier&#8221; based on how many tokens they hold and the length of the litigation, according to Republic&#8217;s website. Investors&#8217; claim will be junior to Roche Freedman&#8217;s contingency fees, which are 33.3% of litigation proceeds up to $100 million and smaller percentages for higher recoveries, the site says.
If Apothio loses the motions to dismiss, which are currently pending, investors will receive back 80% of their investment, according to regulatory filings. 
The filings list a range of potential risk factors to investors, including the risk that &#8220;material&#8221; information about the lawsuit can&#8217;t be disclosed because it&#8217;s the subject of attorney-client privilege.
And even if Apothio is successful in its claims, it may not win damages &#8220;sufficient to fully pay out investors,&#8221; the filings said.
Apothio also has outstanding debt, some of which is past maturity, according to Republic&#8217;s website.
In the lawsuit in question, Apothio <a href="https://www.law360.com/articles/1262969">accuses</a> California&#8217;s DFW and local law enforcement of destroying 17 million of its hemp plants, ignoring the company&#8217;s status as an approved hemp research organization. The defendants have argued that law enforcement testing found the THC levels of the plants were above the legal limit. 
The suit was paused in January, with a magistrate judge finding that further discovery did not appear necessary while the motions to dismiss are decided.
Litigation finance has been a growing area of investment in the U.S. in recent years. Roche Freedman partner Kyle Roche told Law360 on Tuesday that litigation funding can help smaller litigants in legal battles with deep-pocketed adversaries, and the tokenized litigation offering can build on the growing trend.
&#8220;The advent of the ILO has the potential to provide even greater access to justice in our society, and I&#8217;m excited that our firm will be leading the charge along with the innovative minds at Ava Labs and Republic,&#8221; Roche said.
&#8211;Additional reporting by Grace Dixon. Editing by Janice Carter Brown.
 
</div>

By Elise Hansen
Law360 (October 26, 2021, 8:58 PM EDT) &#8212; Retail investors can now bet on litigation finance via a blockchain-based token offering — a so-called initial litigation offering — that will fund hemp company Apothio while it battles a Cali...

Hemp Biz Launches Blockchain-Based Litigation Funding

Apothio Initial Litigation Funding

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<div id="article-body">Law360 (October 22, 2021, 7:07 PM EDT) &#8212; A New York federal magistrate judge has recommended that certification be granted to a narrowed class of investors in a suit against online crypto-asset exchange KuCoin, which has been accused of not registering as a securities exchange and broker-dealer and transacting unregistered securities.
On Thursday, U.S. Magistrate Judge Robert W. Lehrburger recommended in a report that Chase Williams be named class representative and the firms <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a> and <a href="https://www.law360.com/firms/selendy-gay">Selendy &amp; Gay PLLC</a> be named class counsel.
However, the judge also recommended a narrowed definition of the class be adopted to only those who purchased and sold TOMO digital tokens through KuCoin, similar to plaintiff Chase Williams.
Williams had proposed a class that included those who purchased any of the tokens available on the KuCoin exchange between Sept. 15, 2017, and July 2, 2021, but Judge Lehrburger said Williams lacked standing to bring claims on behalf of purchasers of tokens that Williams himself did not purchase.
Williams sued KuCoin and its co-founders, CEO and president in 2020, alleging they failed to make the required disclosures of securities and misled investors to conclude that the tokens were not securities.
Williams claims he incurred losses of approximately $4,000 and is seeking rescission and recovery for the amount paid for the tokens, along with interest and attorneys fees.
Judge Lehrburger said in his report that Williams does not have standing to bring claims on behalf of purchasers of all the tokens because each token was &#8220;originated&#8221; by a different issuer, and therefore a plaintiff&#8217;s right to recovery becomes based on the &#8220;individualized circumstances of each&#8221; token.
There will need to be a separate analysis of whether each token qualified as a security at the time it was issued, and &#8220;the fact analysis required for each token is an intensive one,&#8221; the judge said, and Williams only has genuine interest in the questions surrounding the tokens he purchased.
&#8220;Williams can obtain full recovery for his injury by demonstrating that TOMO Tokens are securities; he need not introduce evidence with respect to any other tokens to establish that fact or any other material fact,&#8221; the report states. &#8220;Williams&#8217; incentives thus are not &#8216;sufficiently aligned&#8217; with those of absent class members who purchased the tokens that he did not.&#8221;
When considering the narrowed class, however, all the requirements for class certification are met, according to the report.
Judge Lehrburger pointed out that the narrowed class only consists of 26 members, which normally wouldn&#8217;t satisfy the numerosity requirement, but he stated that &#8220;judicial economy will be served by proceeding in one action rather than 26 individual actions, and there is no reason to believe that the TOMO Token purchasers are geographically concentrated in a manner that would aid joinder to alleviate that concern.&#8221;
There is also a potential issue with whether class members are ascertainable, since Williams has run into problems with discovery, according to the report.
Not only has KuCoin failed to make an appearance thus far in the action, but Singapore authorities have not permitted Williams to obtain records from KuCoin that can identify class members.
Judge Lehrburger said absent discovery, class members would have to self-identify through public notice, and for now, &#8220;that is sufficient.&#8221;
In recommending Williams as the class representative, Judge Lehrburger said Williams&#8217; interests align with other class members and that the attorneys representing him are from &#8220;two sophisticated and qualified law firms.&#8221;
&#8220;Both Roche Freedman LLP and Selendy &amp; Gay, PLLC have extensive experience in successfully prosecuting complex financial class actions and have ably prosecuted this action over the course of the past fifteen months,&#8221; the report states.
Williams&#8217; proposed class action is <a href="https://www.law360.com/articles/1260569/investors-accuse-crypto-firms-of-illicit-token-sales">one of several</a> that were launched against four crypto-asset exchanges and seven digital token issuers in 2020 for allegedly offering and selling billions of dollars worth of unregistered tokens.
While there have been several one-off cases in the past against coin issuers and exchanges over the unregistered sale of tokens as securities, the suits were the first coordinated effort to push major crypto firms to follow federal and state securities laws, a source familiar with the matter previously told Law360.
Williams and the other investor plaintiffs are all represented by Selendy &amp; Gay and Roche Freedman, and they seek to redress manipulative behavior by exchanges and issuers taking advantage of market enthusiasm for crypto assets following the success of bitcoin and ethereum, according to the firms.
The suits target crypto-asset exchanges <a href="https://www.law360.com/companies/binance-holdings-ltd">Binance</a>, Bibox, KuCoin and <a href="https://www.law360.com/companies/hdr-global-trading-ltd">HDR Global Trading Ltd</a>. (which operates BitMEX) and token issuers Tron Foundation, <a href="https://www.law360.com/companies/block-one-llc">Block.one</a>, BProtocol Foundation (also known as Bancor), <a href="https://www.law360.com/companies/civic-technologies-inc">Civic Technologies Inc</a>., KayDex Pte. Ltd. (also known as Kyber Network), Quantstamp Inc. and Status Research &amp; Development GmbH, along with several of their executives.
All of the defendants face strict liability claims that they offered and sold unregistered securities. The exchanges also face unregistered broker-dealer claims, and BitMex faces additional allegations of market manipulation in violation of the Commodity Exchange Act, court records show.
Williams and other individual investors Alexander Clifford, William Zhang and Eric Lee, on behalf of the proposed investor classes, allege that the companies took advantage of the &#8220;Wild West&#8221; atmosphere of initial coin offerings in 2017 and 2018 before the <a href="https://www.law360.com/agencies/u-s-securities-and-exchange-commission">U.S. Securities and Exchange Commission</a> issued its <a href="https://www.law360.com/articles/1146072/sec-says-ico-doesn-t-need-to-register-as-security">April 2019 guidance</a> deeming digital tokens securities.
According to the suits, the only ICO information available to investors considering buying tokens were &#8220;whitepapers&#8221; published by the coin issuers. These white papers described the purported utility of a token in highly technical terms, &#8220;preying on&#8221; the investors&#8217; lack of familiarity with the underlying technology, the investors said.
Other required disclosures missing from the white papers include a list of key risk factors, warnings about relying on forward-looking statements and an explanation of how the funds from the ICO would be used, the investors claim.
The investors said that token issuers would launch an ICO and then quickly move to list their coins on exchanges like Binance to reach a wider investing audience. Once the exchanges agreed to list a particular token, they would then take over promotion for that token and make millions of dollars in profits, according to the suits.
Issuers and exchanges both took care to convince investors that the tokens were not securities by stating that plainly in their white papers, refusing to register with the SEC, or misleadingly comparing their tokens with bitcoin, a cryptocurrency that the SEC considers to be a commodity and therefore does not have to be registered with the regulator as a security, the investors said.
KuCoin and counsel for Williams did not immediately respond to requests for comment Friday.
Williams and the certified class are represented by Devin Freedman, Edward John Normand, Kyle William Roche and Jordana Lauren Haviv of Roche Freedman LLP and by Jordan Ari Goldstein, Philippe Zuard Selendy, David Coon and Oscar Shine of Selendy &amp; Gay PLLC.
Counsel information for the defendants was not immediately available.
The case is Williams v. KuCoin et al., case number <a href="https://www.law360.com/dockets/6171eb802248760103c72129">1:20-cv-02806</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-southern-district-of-new-york">U.S. District Court for the Southern District of New York</a>.
&#8211;Editing by Andrew Cohen.</div>

By Katryna Perera
Law360 (October 22, 2021, 7:07 PM EDT) &#8212; A New York federal magistrate judge has recommended that certification be granted to a narrowed class of investors in a suit against online crypto-asset exchange KuCoin, which has been accus...

Crypto Buyers Deserve Cert. In Illicit Tokens Suit, Judge Says

By Jasmine Floyd | <time class="article-date">October 11, 2021</time>
Miami-based firm Roche Freedman is building a securities class action practice that has grown from three lawyers to 22 in about two years.
And it’s finding success, having been appointed co-lead counsel or sole lead counsel in more than 20 nationwide securities class actions. But some attorneys say plaintiffs counsel typically have difficulty in bringing successful securities fraud actions.
Miami partner Devin “Vevel” Freedman and New York counterpart Kyle Roche launched the firm in August 2019 with offices in the two cities.
“As we began to grow our practice area, we just took notice of the security class-action practice, and realized that there was an opportunity for lawyers of our background,” Freedman said. “A lot of us come from the defense side firms. We were at these larger defense side practices, and we thought there was a chance to bring everything we had learned on the defense side and switch that to help the plaintiff side practice. Therefore we thought this seemed like a good place to go. There’s a very high level of lawyering, and it’s a fulfilling area in which to practice. We help recover damages for the class and engage on the highest level with some of the best lawyers in the country.”
<h2>‘Frontier’</h2>
Among dozens of cases is Lowry v. RTI Surgical Holdings, in Illinois, where litigants reached a multimillion-dollar settlement and are awaiting court approval, counsel Constantine Economides said.
“We’re now in that stage where we file the papers publicly with the court, and said we agree with the principle of a $10.5 million dollar settlement, which we think is an extraordinary result for the class,” Economides said. “The court has preliminarily approved that settlement, and we’re working toward seeking final approval early in 2022.”
The firm is opportunistic, keeping a watch on trends in securities disputes.
“After we make our determination, we then file plaintiff applications in the cases where we think we have a client that’ll be competitive to secure appointment as lead plaintiff,” Freedman said. “Also, we’ll watch companies for issues we think are fraudulent, and we’ll draft the complaints and file the class actions ourselves, and so we find a Broad spectrum of cases and we have a particular focus on cryptocurrency based security cases. So we filed 11 cases, and in all but one of those cases we were appointed as lead plaintiffs.”
Economides said the firm monitors cases filed weekly and daily across the country, with an eye on the 60-day deadline for anyone who wants to move to be lead plaintiff.
“If the allegations are strong and the case is something that we want to take on, and we have a competitive client who can represent the class, we’ll represent that client in seeking appointment as lead plaintiff,” he said.
Roche Freedman focuses on cannabis, securities, cryptocurrency, arbitration and general litigation.
“We’ll go to that frontier,” Economides said. “Defense side or plaintiffs side, we want to benefit our clients who are in litigation, and through those cases, we aim to develop, interpret and apply the laws—whether crypto, cannabis, or otherwise—in ways that preserve our clients’ interests.”
<h2>Hurdles</h2>
When dealing with security cases, Freeman believes the biggest challenge is getting past motions to dismiss.
“You’ve got an elevated pleading standard that applies and defendants are successful in getting these cases dismissed at that early stage. To combat that, we do a lot of the front end work that lawyers may not normally do in these cases. We hire investigators and accountants to help us investigate the allegations in the complaint and spend a significant amount of time looking into the legal issues and briefing the opposition to a motion to dismiss,” Freedman said.
Some attorneys think it’s a tough business.
Litigator Andrew G. Fiorella, partner at Benesch Law in Cleveland, Ohio, for instance, typically represents the defense. He believes it is difficult for plaintiffs to bring successful securities fraud class actions.
“What we’ve seen recently has been a focus on the ‘strict liability’ cases, the Section 11 or 12 that are easier to bring. Those claims apply to a smaller number of cases, but they are somewhat easier for plaintiffs to bring. In my opinion, it still hasn’t been wildly successful. In the last 10 years or so, claims survive the pleading stages only where outrageous conduct has been pleaded quite clearly and plausibly,” Fiorella said. “I believe that this outcome is what the Supreme Court and Congress intended. They wanted fewer of these claims to proceed. I believe reforms were designed to make it more difficult to bring securities fraud claims and to apply in fewer cases.”
For litigators on both sides, Fiorella believes securities cases are intellectually challenging, and provide a practitioner with the chance to present nuanced and sophisticated arguments to the court.
“The law continues to evolve in this area,” he said. “Although we have seen a limiting of these cases recently, changes in legislative and judicial priorities could once again expand or clarify the boundaries of cognizable claims.”
<time class="article-date">https://www.law.com/dailybusinessreview/2021/10/11/we-just-took-notice-how-a-miami-law-firm-is-growing-its-class-action-practice/</time>

By Jasmine Floyd | October 11, 2021
Miami-based firm Roche Freedman is building a securities class action practice that has grown from three lawyers to 22 in about two years.
And it’s finding success, having been appointed co-lead counsel or sole lead cou...

&#8216;We Just Took Notice&#8217;: How a Miami Law Firm is Growing Its Class-Action Practice

A class of cryptocommodities purchasers represented by Roche Freedman LLP, Selendy &amp; Gay PLLC, and Schneider Wallace Cottrell Konecky LLP will be allowed to proceed with a lawsuit alleging a conspiracy to manipulate the crypto markets, following a decision on the defendants’ motion to dismiss on September 28, 2021. <a href="https://storage.courtlistener.com/recap/gov.uscourts.nysd.524076/gov.uscourts.nysd.524076.182.0_2.pdf">Link to Order</a>
The lawsuit alleges that the crypto-asset “tether” or “USDT” was falsely marketed as supported by a 1:1 reserve of U.S. dollars which did not exist.  Plaintiffs further allege that the debased USDT was then used to buy cryptocommodities in order to create artificially inflated prices.  This conspiracy is alleged to have involved not only Bitfinex and Tether, which created and distributed USDT, but also the exchanges Bittrex and Poloniex, where the cryptocommodities were traded, and Crypto Capital, which used correspondent banking systems in the United States to conceal the conspiracy.  
The attorneys representing the class include Kyle Roche, Ted Normand, and Joseph Delich from Roche Freedman; Philippe Selendy, Caitlin Halligan, Andrew Dunlap, Oscar Shine, and Mitchell Nobel from Selendy &amp; Gay; and Todd Schneider and Matthew Weiler from Schneider Wallace.

A class of cryptocommodities purchasers represented by Roche Freedman LLP, Selendy &amp; Gay PLLC, and Schneider Wallace Cottrell Konecky LLP will be allowed to proceed with a lawsuit alleging a conspiracy to manipulate the crypto markets, following a dec...

Lawsuit Alleging Manipulation of Crypto Markets Through Unbacked Stablecoin “Tether” Survives Motion to Dismiss

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<div id="article-body">Law360 (September 29, 2021, 5:56 PM EDT) &#8212; Crypto asset buyers can pursue many of their claims that the company behind cryptocurrency exchange <a href="https://www.law360.com/companies/ifinex-inc">Bitfinex</a> and the stablecoin tether manipulated the digital asset market and artificially inflated prices, a New York federal court found Tuesday.
DigFinex Inc. and other cryptocurrency companies will have to face several claims that they violated antitrust laws and the Commodity Exchange Act by issuing unbacked tether tokens and strategically purchasing crypto assets in order to prop up prices. But the defendants escaped civil RICO claims, according to Tuesday&#8217;s order.
A proposed class of &#8220;cryptocommodity&#8221; buyers said they purchased assets such as bitcoin and ether at artificially inflated prices, before prices plummeted in 2018. They&#8217;ve adequately <a href="https://www.law360.com/articles/1326576">alleged anticompetitive efforts</a> at price control, although they&#8217;ll have to go on to show their claims are true, U.S. District Judge Katherine Polk Failla found.
&#8220;Plaintiffs have plausibly alleged conduct from which the court can draw a reasonable inference of the DigFinex defendants&#8217; intent to control prices, and thus to &#8216;constrain the market for other buyers and sellers&#8217; of cryptocommodities,&#8221; the order said.
The allegations are spearheaded by a proposed class of digital asset buyers including New York residents David, Benjamin and Jason Leibowitz. One of the main targets of the allegations is DigFinex Inc. and various affiliated entities. DigFinex is the parent company behind crypto-asset exchange Bitfinex as well as Tether and its namesake stablecoin, tether, which is advertised as a digital token pegged to the U.S. dollar.
Tether, when it was first issued, was the main stablecoin in the digital asset space, and the Leibowitzes argued this put DigFinex entities in a position to manipulate the digital commodity market. The plaintiffs alleged that instead of being backed by U.S. dollars in reserve, billions of dollars of tether were issued &#8220;out of thin air.&#8221;
Bitfinex and Tether entities allegedly then transferred the tether to other exchanges and made hefty, strategic purchases of cryptocurrencies when prices threatened to drop, simulating the appearance of a price floor, the complaint said.
The alleged maneuver &#8220;artificially simulat[ed] organic demand and creat[ed] a &#8216;colossal bubble&#8217; in the cryptocommodity market,&#8221; the plaintiffs said in their complaint.
The complaint also names DigFinex executives, a payment processor called Crypto Capital Corp., former NFL investor Reginald Fowler and a pair of other cryptocurrency exchanges, which are accused of furthering the alleged scheme despite ostensibly being Bitfinex competitors.
Fowler, a former investor in the <a href="https://www.law360.com/companies/minnesota-vikings-football-llc">Minnesota Vikings </a>NFL team, is accused of knowingly participating in the scheme alongside Crypto Capital. The court found Tuesday that it did have jurisdiction over him, despite his Arizona residence. Fowler is facing <a href="https://www.law360.com/articles/1320095">related claims from prosecutors</a> alleging he acted as an unlicensed money transmitter and lied to banks.
Fowler could not immediately be reached for comment on Wednesday.
While the majority of the Leibowitzes&#8217; market manipulation claims can also proceed, Judge Failla said their RICO claims were too tenuous.
&#8220;The causal connection between defendants&#8217; purported racketeering and plaintiffs&#8217; injury is insufficiently &#8216;direct&#8217; and &#8216;straightforward'&#8221; to satisfy the requirements for a RICO claim, the order said.
Tether on Wednesday put out a statement celebrating the dismissal of the RICO claims and saying the remainder of the case is &#8220;now in shambles.&#8221;
&#8220;Even for the remaining claims, the court&#8217;s order raises substantial issues that will ultimately be fatal to the plaintiffs&#8217; case,&#8221; the statement said, adding that the claims are &#8220;meritless.&#8221;
&#8220;Bitfinex and Tether look forward to litigating this case and won&#8217;t settle what remains of the plaintiffs&#8217; baseless claims,&#8221; Tether said. &#8220;Litigation will expose this case for what it is: a clumsy attempt at a money grab, which recklessly harms the whole cryptocurrency ecosystem.&#8221;
Jim Walden of <a href="https://www.law360.com/firms/walden-macht">Walden Macht &amp; Haran LLP</a> and Michael J. Lee of the Law Offices of Michael Jason Lee APLC, who are representing the DigFinex entities, said they were pleased at the dismissal of the &#8220;frivolous&#8221; RICO claims, adding that the plaintiffs will have an uphill climb to actually prove the remaining claims. 
&#8220;The court&#8217;s decision to keep the other claims alive was hardly an endorsement of the claims: the court repeatedly called out the challenges of sustaining them and the reasonable counterarguments and inferences raised by the defendants&#8217; motions,&#8221; Walden and Lee said in an emailed statement to Law360 on Wednesday. 
Under the weight of discovery, &#8220;the case will fold,&#8221; Walden and Lee said. 
Counsel for the plaintiffs did not immediately respond to requests for comment on Wednesday.
The plaintiffs are represented by Andrew R. Dunlap, Caitlin Halligan and Philippe Z. Selendy of <a href="https://www.law360.com/firms/selendy-gay">Selendy &amp; Gay PLLC</a>, Kyle W. Roche, Edward Normand, Velvel Freedman and Joseph M. Delich of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, and Todd M. Schneider, Jason H. Kim, Matthew S. Weiler and Kyle G. Bates of <a href="https://www.law360.com/firms/schneider-wallace">Schneider Wallace Cottrell Konecky LLP</a>.
DigFinex and the Bitfinex and Tether entities are represented by Jim Walden, Daniel J. Chirlin, Daniel A. Cohen and Veronica M. Wayner of Walden Macht &amp; Haran LLP and Michael Jason Lee of the Law Offices of Michael Jason Lee APLC.
Fowler is representing himself.
&#8211;Additional reporting by Dean Seal and Pete Brush. Editing by Philip Shea.</div>

By Elise Hansen
Law360 (September 29, 2021, 5:56 PM EDT) &#8212; Crypto asset buyers can pursue many of their claims that the company behind cryptocurrency exchange Bitfinex and the stablecoin tether manipulated the digital asset market and artificially i...

Tether, Bitfinex Must Face Crypto Market Manipulation Claims

NEW YORK, NY, UNITED STATES, September 17, 2021 /EINPresswire.com/ &#8212; Roche Freedman LLP announces that a class action lawsuit has been filed against CorMedix, Inc. (“CorMedix” or the “Company”) (NASDAQ: CRMD) and certain of its officers.   The class action, filed in the United States District Court for the District of New Jersey, and docketed under 21-cv-16855, is on behalf of an expanded class consisting of all persons and entities other than Defendants that purchased or otherwise acquired CorMedix securities between October 16, 2019 and May 13, 2021, both dates inclusive (the “Expanded Class Period”), seeking to recover damages caused by Defendants’ violations of the federal securities laws and to pursue remedies under §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, against the Company and certain of its top officials.
If you are a shareholder who purchased CorMedix securities during the Expanded Class Period, you have until September 20, 2021 to ask the Court to appoint you as Lead Plaintiff for the class.  To discuss this action and/or obtain a copy of the Complaint, contact Ivy T. Ngo at <a href="mailto:ingo@rochefreedman.com">ingo@rochefreedman.com</a> or 646-392-8842. Those who inquire by e-mail are encouraged to include their mailing address, telephone number, and the number of shares purchased.  
CorMedix is a biopharmaceutical company that focuses on developing and commercializing therapeutic products for the prevention and treatment of infectious and inflammatory diseases in the U.S. and internationally. The Company is focused on developing its lead product candidate, DefenCath, a purported novel antibacterial and antifungal solution designed to prevent costly and dangerous catheter-related bloodstream infections (“CRBSIs”). DefenCath has been available in Europe and the Middle East under the brand name Neutrolin since 2013. 
In the U.S., CorMedix completed Phase 3 of clinical development of DefenCath in July 2019 and finally appeared ready to submit a New Drug Application (“NDA”) to the U.S. Food and Drug Administration (“FDA”) for approval, including its manufacturing information, on October 16, 2019. That day, the first day of the Class Period, the Company announced that “[t]he FDA was supportive of Neutrolin’s proposed manufacturing program, including the active pharmaceutical ingredients (API), the container closure and testing, and indicated that it will conduct a thorough review of all of the CMC [“Chemistry, Manufacturing, and Control”] information as well as assess the commercial readiness of the various manufacturing facilities at the time of NDA filing” and that “[n]o further CMC meetings with FDA [we]re planned prior to NDA submission.”
In February 2020, CorMedix began its rolling submission of its NDA for DefenCath as a catheter lock solution with an initial indication for use of preventing CRBSIs in patients with end-stage renal disease who are receiving hemodialysis via a central venous catheter. The NDA submission was completed in July 2020.
The complaint alleges that, throughout the Expanded Class Period, Defendants made materially false and/or misleading statements, as well as failed to disclose material adverse facts about the Company’s business, operations, and prospects.  Specifically, Defendants failed to disclose to investors: (i) deficiencies existed with respect to DefenCath’s manufacturing process and/or at the facility responsible for manufacturing DefenCath; (ii) in light of the foregoing deficiencies, the FDA was unlikely to approve the DefenCath NDA for CRBSIs in its present form; (iii) Defendants had downplayed the true scope of the deficiencies with DefenCath’s manufacturing process and/or at the facility responsible for manufacturing DefenCath; and (iv) as a result, the Company’s public statements were materially false and misleading at all relevant times.
On March 1, 2021, CorMedix issued a press release “announc[ing] that the [FDA] cannot approve the [NDA] for DefenCath . . . in its present form.” CorMedix informed investors that the “FDA noted concerns at the third-party manufacturing facility after a review of records requested by FDA and provided by the manufacturing facility”; that the “FDA did not specify the issues and CorMedix intends to work with the manufacturing facility to develop a plan for resolution when FDA informs the facility of the specific concerns”; that, “[w]hen we are informed of the issues, we will schedule an investor conference call to provide an update on our expected timeline for resolution”; and that, “[a]dditionally, FDA is requiring a manual extraction study to demonstrate that the labeled volume can be consistently withdrawn from the vials despite an existing in-process control to demonstrate fill volume within specifications.”
On this news, CorMedix’s stock price fell $5.98 per share, or 39.87%, to close at $9.02 per share on March 1, 2021.
Then, on April 14, 2021, Defendants announced that CorMedix would have to take additional steps to meet the FDA’s requirements for DefenCath’s manufacturing process, including “[a]ddressing FDA’s concerns regarding the qualification of the filling operation [that] may necessitate adjustments in the process and generation of additional data on operating parameters for manufacture of DefenCath.”
On this news, CorMedix’s stock price fell $1.44 per share, or 15.37%, to close at $7.93 per share on April 14, 2021.
Finally, on May 13, 2021, CorMedix announced that “[b]ased on our analyses, we have concluded that additional process qualification will be needed with subsequent validation to address the deficiencies identified by FDA.” After an analyst pressed for clearer information on DefenCath’s manufacturing deficiencies on a conference call held that same day, Defendant Phoebe Mounts, CorMedix’s Executive Vice President and General Counsel, finally disclosed, inter alia, that “there are times when there may be unexpected results obtained”; that the FDA “expect[s] us to generate sufficient data to demonstrate that[ the filling] process is a controlled process and is consistent with the agency’s requirements for good manufacturing practice”; that “sterility is a very important part of that process,” as well as “the accuracy in making sure the right volume of DEFENCATH is loaded into the vials”; that “we are talking about thousands of vials during the manufacturing run”; that Defendant must “generat[e] of a lot of data to make sure that . . . all the equipment has been qualified for the intended use and every step in the manufacturing process has been qualified”; that “th[e] process needs to be very robust, [and] needs to be reproducible”; and that “the burden is on the manufacturer to demonstrate that the facility can do that process reducibly and generate the required product for commercial distribution.”
On this news, CorMedix’s stock price fell $1.51 per share, or 19.97%, to close at $6.05 per share on May 14, 2021.
About Roche Freedman LLP
Founded in 2019, Roche Freedman LLP is a national law firm comprised of innovative and tech savvy attorneys with stellar credentials. With experience from some of the most prestigious litigation firms in the country, RF&#8217;s legal team has a successful and decades-long track record of consistently achieving outstanding results in high-stakes and notable disputes on behalf of sophisticated clients. RF&#8217;s legal team has extensive experience litigating complex commercial securities, antitrust, class action and derivative matters on behalf of both plaintiffs and defendants in a broad range of industries. RF couples a unique brand of creative thinking and technical expertise with well-balanced aggressive advocacy to achieve impressive results in complex, high value, and class action matters. As the firm continues to grow, it has focused on building a diverse attorney pool with cross-functional expertise.

NEW YORK, NY, UNITED STATES, September 17, 2021 /EINPresswire.com/ &#8212; Roche Freedman LLP announces that a class action lawsuit has been filed against CorMedix, Inc. (“CorMedix” or the “Company”) (NASDAQ: CRMD) and certain of its officers.   The class...

Roche Freedman Announces the Filing of a Class Action Against CorMedix, Inc., and Certain Officers – CRMD

By <a title="" href="https://www.law360.com/illinois/articles/1418053/surgical-implant-co-settles-securities-suit-for-10-5m#">Morgan Conley</a>
Law360 (September 1, 2021, 6:53 PM EDT) &#8212; A surgical implant company has agreed to pay $10.5 million to end a class action accusing it of manipulating revenue reports by regularly shipping products to customers ahead of schedule to make it appear as if quarterly revenue targets were being met.
Lead plaintiff Rosy Yeretsian asked an Illinois federal court Tuesday to grant preliminary approval to the &#8220;extraordinary&#8221; agreement reached with RTI Surgical Inc. The proposed deal seeks to certify a nationwide settlement class of all investors who purchased RTI common stock from March 7, 2016, through March 27, 2020. The arrangement would resolve claims that RTI made false and misleading statements about company finances in violation of the Securities Exchange Act of 1934 and that RTI stock prices suffered as a result. RTI, along with former executives that signed off on the settlement, didn&#8217;t admit any wrongdoing or liability in connection with the deal, according to the settlement documents filed in court. &#8220;The proposed settlement in this case is extraordinary, and well &#8216;within the range of possible approval,'&#8221; Yeretsian told the court. &#8220;The $10,500,000 cash benefit conferred by the settlement represents approximately 30% of the $30-37 million that class plaintiff&#8217;s experts have estimated would be the maximum likely recovery if class plaintiff prevailed on all of her claims.&#8221; Since the typical settlement in comparable cases usually involves recovering about 8% of total damages, the deal represents an exceptional recovery for investors, Yeretsian said. RTI was hit with the proposed shareholder class action in March 2020 by investor Patricia Lowry. Yeretsian was appointed lead plaintiff in May 2020. The shareholders alleged that the company and former officers misled the investing public about the company&#8217;s financial performance through the practice of &#8220;revenue smoothing,&#8221; which involved manipulating when customers received orders &#8220;so that management could hit quarterly revenue targets,&#8221; according to the most recently amended complaint. The investors alleged the company fraudulently misrepresented how RTI recognized revenue and the revenue numbers recorded. According to the motion for preliminary approval, shortly after the complaint was filed, the company filed a report with the <a href="https://www.law360.com/agencies/u-s-securities-and-exchange-commission">U.S. Securities and Exchange Commission</a> announcing an ongoing internal audit that was looking into the company&#8217;s financial reporting for multiple years. The audit committee&#8217;s findings were made public in June 2020 and found &#8220;goods were shipped and received by the customers before requested delivery dates and agreed-upon delivery windows,&#8221; according to the investors&#8217; complaint. After U.S. District Judge Matthew F. Kennelly refused to let RTI escape any of the class claims in April, the parties began discussing negotiating a settlement, according to the motion. Eventually, their talks resulted in the $10.5 million cash deal put before the court Tuesday. According to the motion, as of February 2019, there were more than 62 million shares of RTI common stock outstanding. Representatives for the parties didn&#8217;t immediately return requests for comment Monday. The proposed class is represented by Patrick V. Dahlstrom and Louis C. Ludwig of <a href="https://www.law360.com/firms/pomerantz-llp">Pomerantz LLP</a>, Velvel Freedman, Kyle W. Roche, Ivy T. Ngo and Constantine P. Economides of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, Phillip Kim and Laurence M. Rosen of the Rosen Law Firm PA, and Brian Schall of <a href="https://www.law360.com/firms/schall-law-firm">The Schall Law Firm</a> RTI is represented by Martin G. Durkin, Louise McAlpin, Stephen P. Warren and Allison Kernisky of <a href="https://www.law360.com/firms/holland-knight">Holland &amp; Knight LLP</a>. The suit is Lowry et al. v. RTI Surgical Holdings, Inc. et al., case number <a href="https://www.law360.com/dockets/612f8846195b5ed1d241b413">1:20-cv-01939</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-illinois">U.S. District Court for the Northern District of Illinois</a>. &#8211;Editing by Kelly Duncan.
https://www.law360.com/illinois/articles/1418053/surgical-implant-co-settles-securities-suit-for-10-5m

By Morgan Conley
Law360 (September 1, 2021, 6:53 PM EDT) &#8212; A surgical implant company has agreed to pay $10.5 million to end a class action accusing it of manipulating revenue reports by regularly shipping products to customers ahead of schedule to ...

SURGICAL IMPLANT CO. SETTLES SECURITIES SUIT FOR $10.5M

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<div id="article-body">Law360 (August 10, 2021, 9:12 PM EDT) &#8212; A cryptocurrency enthusiast who took advantage of a bug in a blockchain organization&#8217;s code to mint millions of tokens can pursue claims that he is entitled to the tokens, a California federal judge found, saying the case raises novel questions about digital property.
Mark Shin has adequately alleged that ICON Foundation was wrong to get his crypto-asset accounts frozen after he took advantage of its flawed code, U.S. District Judge William H. Orrick said Monday. The case addresses property rights concerning blockchains and decentralized technology, a relatively fresh legal frontier.
Shin &#8220;appears to raise issues of first impression: both parties attempt to apply common law principles to the unique rules of the ICON Network to accuse the other of, among other things, interference with property rights,&#8221; the order said. &#8220;This area of law, and the rights of the parties, will benefit from a more complete factual record before decisions on the merits are made.&#8221;
For now, Shin&#8217;s allegations are enough to allow the case to go forward, Judge Orrick said in denying the bulk of ICON Foundation&#8217;s motion to dismiss the claims.
According to court filings, Shin discovered a bug in the ICON Network&#8217;s code after a software update. ICON bills itself as a blockchain protocol for decentralized applications and also has a native digital asset known as ICX, its website says.
The bug allowed Shin to create 14 million new ICX tokens, many of which he then transferred to the cryptocurrency exchanges Kraken and <a href="https://www.law360.com/companies/binance-holdings-ltd">Binance</a>, according to court documents.
&#8220;Shin acknowledges that &#8216;the authors and developers of the [software update] may not have intended for the network proposal to behave as it did,'&#8221; the order noted, citing Shin&#8217;s complaint.
But the code changes had been properly agreed to and adopted, so Shin has argued that he is the new tokens&#8217; lawful owner.
ICON disagreed, and the organization asked Binance and Kraken to have Shin&#8217;s accounts frozen, saying he had attacked the network, Shin alleges. ICON later proposed an update, dubbed the Revision 10 Proposal, to correct the bug that Shin had exploited.
Shin alleges that these actions fly in the face of ICON&#8217;s claim of &#8220;decentralized&#8221; governance. ICON&#8217;s actions also wrongly interfered with his alleged ownership rights over the tokens, Shin argued.
He claims conversion and trespass to chattel for the tokens frozen in his ICON wallet and frozen in his accounts with the outside cryptocurrency exchanges. His allegations are good enough to move forward, Judge Orrick said.
&#8220;It is clear that the parties strongly dispute whether Shin&#8217;s actions in acquiring the ICX tokens were proper and whether common law principles should apply in this unique context,&#8221; Judge Orrick said. &#8220;The inquiry at this stage, however, is whether Shin has plausibly alleged possessory interest in the ICX tokens. I find that he has.&#8221;
&#8220;Whether Shin&#8217;s alleged ownership right is in fact legitimate cannot, and need not, be resolved on a motion to dismiss,&#8221; the judge added.
The state of Colorado seems to think Shin&#8217;s ownership claim is not legitimate; the District Attorney&#8217;s office sued Shin at the end of June alleging cybercrime, theft and money laundering in connection with the minting of the tokens. The state-level case is proceeding in lieu of an earlier-filed federal case against Shin by the <a href="https://www.law360.com/agencies/u-s-department-of-justice">U.S. Department of Justice</a>, court filings show. 
Colorado has alleged that Shin &#8220;unlawfully, feloniously and knowingly&#8221; committed theft by exercising control over the tokens. The case is currently ongoing. 
Kyle Roche of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, who is representing Shin, said the civil case in California presents key questions about blockchain and property rights.
&#8220;It&#8217;s a seminal case for establishing property rights on the blockchain,&#8221; Roche told Law360 on Tuesday. &#8220;Essentially, if the blockchain says you have certain tokens, and you didn&#8217;t take those tokens from another individual, the rules of blockchains are that that property belongs to you,&#8221; unless there are additional user agreements for the network, he said.
Ted Normand, also of Roche Freedman, said the case also foregrounds questions about decentralized governance.
&#8220;If you&#8217;re a DeFi company issuing assets … you can&#8217;t have a decentralized ecosystem only when it&#8217;s convenient,&#8221; he told Law360.
Counsel for ICON called the ruling disappointing but noted the early stage of the litigation. 
&#8220;We&#8217;re disappointed, but at this early stage the judge was required to accept Shin&#8217;s allegations as true despite their falsity,&#8221; Christopher Wanger, a partner at <a href="https://www.law360.com/firms/manatt-phelps">Manatt Phelps &amp; Phillips LLP</a> told Law360 on Wednesday. 
Wanger added that the ICON network is indeed decentralized and is governed by 22 different public representatives who aren&#8217;t controlled by the ICON Foundation. And ultimately, the debate over decentralization doesn&#8217;t excuse Shin&#8217;s actions, Wanger said. 
&#8220;Shin&#8217;s claims relating to the decentralized nature of the ICON network ultimately are immaterial to his property claims,&#8221; he said. &#8220;The case is interesting because it involves the application of old rules to new technology — blockchain and cryptocurrency. But ultimately the old rules prevail — you don&#8217;t keep things that don&#8217;t belong to you.&#8221;
ICON Foundation is represented by Christopher L. Wanger and Misa K. Eiritz of Manatt Phelps &amp; Phillips LLP and by Jason Gottlieb and Michael Mix of <a href="https://www.law360.com/firms/morrison-cohen">Morrison Cohen LLP</a>.
Shin is represented by Kyle W. Roche, Edward Normand, Ivy T. Ngo, Daniel M. Stone and Katherine Eskovitz of Roche Freedman LLP.
The case is Mark Shin v. ICON Foundation, case number <a href="https://www.law360.com/cases/5f9010b5312d09036e2466e7">3:20-cv-07363</a> in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-california">U.S. District Court for the Northern District of California</a>. The Colorado state case is People of the State of Colorado v. Mark Shin, case number D32021CR1445 in the District Court for the County Of Arapahoe, Colorado.
&#8211;Editing by Peter Rozovsky.</div>
<div> </div>
<div>https://www.law360.com/articles/1411490</div>
<div>Update: This story has been updated with comment from ICON Foundation&#8217;s counsel and information about the Colorado case.
 
</div>

By Elise Hansen
Law360 (August 10, 2021, 9:12 PM EDT) &#8212; A cryptocurrency enthusiast who took advantage of a bug in a blockchain organization&#8217;s code to mint millions of tokens can pursue claims that he is entitled to the tokens, a California fe...

SUIT OVER BLOCKCHAIN PROPERTY RIGHTS SURVIVES DISMISSAL BID

VEL FREEDMAN NAMED LEGAL ELITE UP &#038; COMER FOR 2021 BY FLORIDA TREND

LITIGATION WRINKLE IN TREND OF ONLINE INFLUENCERS INDUCING SHORT ON CRYPTO ASSETS

FLORIDA HIGH COURT BLOCKS RECREATIONAL MARIJUANA INITIATIVE FROM APPEARING ON BALLOT

By Michael A. Mora | <time class="article-date">May 11, 2021</time>
When it comes to cryptocurrency and cannabis litigation, Velvel Freedman, a partner at Roche Freedman, has quickly become a leader in the emerging field. He advocates for clients in state, federal and international trial and appellate courts in high-risk litigation.
The Miami-based attorney spoke about the opportunities players in these two industries see right now, the regulatory problems that keep his clients up late at night, and what separates his new law firm from its competitors.
What major opportunities do you see as the country opens up in the crypto field? 
As a technological solution cryptocurrency hasn’t really been limited by COVID-19. Interestingly, it’s a great example of how the crypto community’s decentralization ethos has proven the resilience of cryptocurrency from threats beyond regulations and market forces. And the trend is spreading. After navigating a highly successful IPO during the pandemic, Coinbase just announced that it’s moving to fully decentralized offices and closing its California headquarters.
What major opportunities do you see as the country opens up in the cannabis field?
We’re seeing a huge increase in the amount of capital available for mergers and acquisition deals in the cannabis space since New York went recreational in April. As the country recovers from the pandemic, more capital flows into the system, and the possibility that congress passes the SAFE Banking Act increases—which would allow banks to provide services to cannabis companies—I’m sure we’ll see many cannabis deals, and litigation from failed deals, quite shortly.
What regulatory problems keep your clients up at night?
The intersection of federal law and local regulations with the operation of both cannabis and cryptocurrency businesses is something we are regularly advising our clients about.
What’s the biggest litigation trend you’re seeing right now?
We’re seeing the legal industry leveraging technology to increase convenience and expand their reach. So for example, law firms are hiring talent to work remotely, conducting Zoom depositions, Zoom arbitration hearings, Zoom client meetings, and Zoom interviews. Courts are also trending in the same direction. We’re seeing Zoom hearings, status conferences, and I’m even set for a Zoom trial this coming August. One great benefit of this trend is that litigators in Miami, for example, can be attending weekly hearings in Los Angeles.
What do you think is the most important thing for you and perhaps other lawyers to focus on at this point in the pandemic?
Recruiting exceptional talent. We spend an incredible amount of time working on complex legal issues and trying to find creative solutions for our clients. Creating bright, talented and diverse teams with different viewpoints is a key to success. The pandemic has shown that firms can recruit from beyond their normal geographic limits. Seize the opportunity.
What distinguishes your firm from others? What makes you unique?
We bring a unique brand of creative thinking and technical expertise that’s balanced out by aggressive advocacy and strategic planning. Part of that comes from being a young firm with experienced lawyers who are interested in disrupting, and ushering in, the next generation of legal practice. We are also able to offer our clients billing arrangements that align our interests and provide value and greater predictability.
Can you cite tactics that exemplify your firm’s approach to success?
Sure. We are unafraid to take on big cases with new legal issues in emerging areas of law—or to bring our expertise to high stakes commercial litigation. On the plaintiff side, we’ve filed numerous class actions in the cryptocurrency space on innovative theories, been appointed lead counsel in numerous securities cases by courts across the country, and filed our own plaintiff side cannabis cases. For example, we had a billion-dollar lawsuit for the largest wholesale destruction of personal property in U.S. history by government entities. On the defense side, we defend publicly traded companies in cannabis litigation, high -profile complex commercial litigation, and help advise numerous cryptocurrency companies through a variety of issues. Our combined experience and creativity enables us to successfully litigate any case, anywhere, anytime.
What are the major threats to your practice, and what are you doing to adjust?
Our only real threat is growing too quickly, which we carefully monitor. We had to turn away cases in our early days, but we prefer to be selective and successful. We regularly team up with co-counsel, as needed, but as we grow to a core size, we typically handle most complex litigation on our own.

By Michael A. Mora | May 11, 2021
When it comes to cryptocurrency and cannabis litigation, Velvel Freedman, a partner at Roche Freedman, has quickly become a leader in the emerging field. He advocates for clients in state, federal and international trial ...

CRYPTO AND CANNABIS: MIAMI LAW FIRM BRACES FOR 2 BIG OPPORTUNITIES

AS CIVIL CASE AGAINST ALEX RODRIGUEZ MOVES CLOSER TO TRIAL, FORMER SLUGGER IS SET TO BE DEPOSED ON VIDEO

<h1 id="yui_3_17_2_1_1628520065007_196">Tilray&#8217;s application for a scarce, low-THC dispensing license on behalf of Bill&#8217;s Nursery scored last in both of the regions it applied, despite the company touting its expertise.</h1>
By Michael A. Mora | April 16, 2021
A Miami attorney has a word of warning for new players in the cannabis industry.
Velvel Freedman, a partner at Roche Freedman in Miami and lead attorney for Bill’s Nursery based in Homestead, Florida, argued in a lawsuit pending in a Washington state court that Tilray Inc., a $4.3 billion dollar publicly-traded company represented by an AM Law 200 law firm, pulled a “bait and switch” on his client.
And Freedman said on Friday that the contractual dispute between the two companies is a cautionary tale in the emerging cannabis industry for small companies choosing to team up with some of these relatively new mega-cannabis businesses.
“Don’t bring frivolous litigation if there are skeletons in your closet because discovery is a two-way process,” Freedman alleged. “Tilray’s predecessor’s assignee has expended an outrageous amount of money pursuing meritless claims, most of which have already been thrown out.”
The dispute between the two companies dated back to a contract signed between Bill’s Nursery and Tilray in 2015, to allegedly increase Bill’s Nursery’s chances to obtain one of Florida’s scarce THC Dispensing Organization licenses.
Tilray claimed to have the “best systems, techniques, standard operating procedures and proprietary methods in the cannabis industry,” according to the complaint.
However, the complaint alleged that the Canadian cannabis company pulled a “bait and switch” by filing an application on behalf of Bill’s Nursery “composed of cursory, generic, well-known descriptions.”
The application scored last in both of the regions in which Bill’s Nursery applied for a license, and the Florida Office of Medical Marijuana Use had some choice words about the “quite poor” application containing “generic boilerplate information,” according to court pleadings. Then, the two companies parted ways.
But after four years, three lawsuits, numerous law firms and consultants, and tens of thousands of hours, Bill’s Nursery settled with the Florida Department of Health for a medical marijuana treatment center license.
That motivated a Tilray entity, Left Coast Ventures, to file a lawsuit claiming it should be reimbursed for its work in the license approval. During that litigation, former in-house counsel testified the application was watered down because it could expose “trade secrets” and threaten its competitive advantage over competitors, according to the complaint.
Now, Bill’s Nursery is fighting back, suing the Canadian mega-cannabis company in Washington state court for breach of contract, breach of implied good faith and fair dealing, breach of fiduciary duty, and fraud. Meanwhile, the Left Coast Venture lawsuit is scheduled for trial in August.
John McKay and John A. Goldmark, partners at Davis Wright Tremaine in Seattle, Washington, who represent the two companies, did not respond to repeated requests for comment.
This is not the only lawsuit Tilrey is facing. Tilray recently combined its operations with cannabis giant Aphria Inc. in December 2020 to increase the size of the operation and market share. The embattled company is in hot water with the Securities and Exchange Commission for disclosing the merger on platforms like Twitter and LinkedIn.
Tilray is also facing a series of class action complaints from its shareholders, which lawyers for the company have previously claimed lacked merit.
<a href="https://www.law.com/dailybusinessreview/2021/04/16/miami-attorney-to-fight-big-law-in-suit-over-alleged-bait-and-switch-cannabis-scheme/">https://www.law.com/dailybusinessreview/2021/04/16/miami-attorney-to-fight-big-law-in-suit-over-alleged-bait-and-switch-cannabis-scheme/</a>

Tilray&#8217;s application for a scarce, low-THC dispensing license on behalf of Bill&#8217;s Nursery scored last in both of the regions it applied, despite the company touting its expertise.
By Michael A. Mora | April 16, 2021
A Miami attorney has a word...

Miami Attorney to Fight Big Law in Suit Over Alleged &#8216;Bait-and-Switch&#8217; Cannabis Scheme

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<div id="article-body">Law360 (April 14, 2021, 9:20 PM EDT) &#8212; A Florida nursery has alleged in a new lawsuit that Canadian cannabis company <a href="https://www.law360.com/companies/tilray-inc">Tilray</a> pulled a &#8220;bait and switch&#8221; in 2015, promising to use its industry expertise to help the grower secure a low-THC medical marijuana license only to intentionally sabotage the application.
The complaint, filed on Thursday in Washington state court, marks the latest development in a multipronged legal battle waged by Bill&#8217;s Nursery in connection with a years-old business agreement that fizzled out under Florida&#8217;s previous medical cannabis program.
As recounted in the complaint, Bill&#8217;s Nursery of Homestead, Florida, entered into an agreement with <a href="https://www.law360.com/companies/privateer-holdings-inc">Privateer Holdings Inc</a>., a predecessor of Tilray Inc., whereby Privateer would help bolster the nursery&#8217;s applications to the <a href="https://www.law360.com/agencies/florida-department-of-health">Florida Department of Health</a> by drawing on the company&#8217;s expertise, best practices and standard operating procedures.
Bill&#8217;s Nursery and Privateer also agreed that if the grower was awarded a license, Privateer could exercise a $25,000 option for the right to buy the grower.
After Bill&#8217;s Nursery agreed to the deal, &#8220;Tilray produced a joke of an application that was composed of cursory, generic, well-known descriptions,&#8221; said the complaint, filed in King County Superior Court in Seattle. &#8220;For example, Tilray copied the substance of certain New York regulations almost word for word.&#8221;
Bill&#8217;s Nursery applied for a license in two dispensing regions of Florida. The applications were rejected, scoring  &#8220;dead last&#8221; in both  regions, according to the complaint.
The former head of the <a href="https://www.law360.com/agencies/florida-office-of-medical-marijuana-use">Florida Office of Medical Marijuana Use</a> described the applications as &#8221; &#8216;quite poor,&#8217; &#8216;fairly short,&#8217; containing &#8216;generic boilerplate information&#8217; that &#8216;lacked specificity or cogency,&#8217; &#8221; of poor quality overall,  the complaint said.
Bill&#8217;s Nursery ultimately obtained a dispensary license in 2019 under the state&#8217;s revamped full-THC medical cannabis program, as part of a<a href="https://www.law360.com/articles/1145603/deal-nets-fla-medical-marijuana-provider-extra-dispensaries"> </a>settlement with the health department following years of legal wrangling.
The license award prompted California-based cannabis holding company Left Coast Ventures Inc. to sue Bill&#8217;s Nursery in July 2019, claiming that it had acquired the option to buy the Bill&#8217;s Nursery dispensary from Privateer  once it had become licensed.
A trial court judge ruled in favor of Bill&#8217;s Nursery, finding that the option agreement became void after the denial of the 2015 applications, and accordingly dismissed the lion&#8217;s share of Left Coast&#8217;s claims with prejudice.
A Washington state appellate court later found that Bill&#8217;s Nursery received its 2019 license entirely thanks to the settlement reached with the Florida Department of Health, which favored unsuccessful applicants from prior years, and not because of a new review of the failed 2015 applications.
During discovery in <a href="https://www.law360.com/articles/1311311/pot-co-can-t-get-rehearing-in-license-ownership-dispute">that underlying lawsuit</a>, Bill&#8217;s Nursery said it realized that Privateer had deliberately kneecapped its application, using boilerplate, nonspecific language rather than proprietary material over fears that a competitor could learn trade secrets in the application language, a &#8220;blueprint&#8221; to the business.  
&#8220;Contrary to its promise to [Bill&#8217;s Nursery] to leverage its expertise and put together the best application it could, Tilray was simply taking a bet that its well-known name would carry the day,&#8221; the nursery said in its complaint.
&#8220;This let Tilray cast its hat in the ring without any downside risk,&#8221; the complaint continued. &#8220;If its name carried the day, great. If it lost, the only downside was that it would lose the fees it paid to the DOH, a cost that didn&#8217;t even register on Tilray&#8217;s mega-balance sheet. &#8220;
Bill&#8217;s Nursery said Left Coast showed &#8220;chutzpah&#8221; by filing its lawsuit, which accused the grower of misappropriation of trade secrets and alleged that it received the 2019 license  only because of the expertise provided years earlier by Privateer. The Left Coast case is set to go to trial on the remaining claims in August. 
Velvel Freedman of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman</a>, an attorney for Bill&#8217;s Nursery, said in a statement Wednesday that Tilray &#8220;shouldn&#8217;t have bait-and-switched Bill&#8217;s Nursery …by promising the world but delivering junk work product.&#8221;
Freedman continued, &#8220;It certainly shouldn&#8217;t have then laid in wait for years as Bill&#8217;s Nursery fought alone to obtain a medical marijuana license, and then come out of the shadows to try and free-ride on Bill&#8217;s Nursery&#8217;s success through a meritless lawsuit predicated on tenuous legal technicalities. But that&#8217;s exactly what the complaint alleges Tilray&#8217;s predecessor did. It should be ashamed of itself.&#8221;
Bill&#8217;s Nursery alleges breach of contract, breach of the implied duty of good faith and fair dealing, breach of fiduciary duty and fraud, and is seeking unspecified damages, costs, fees and other relief.
Tilray did not immediately respond to a request for comment on Wednesday.
Bill&#8217;s Nursery and its owner, Stephen Garrison, are represented by Velvel Freedman, Constantine Economides and Colleen Smeryage of Roche Freedman LLP and Emanuel Jacobowitz of Arnold &amp; Jacobowitz PLLC.
Counsel information for Tilray was not immediately available on Wednesday.
The case is Bill&#8217;s Nursery Inc. et al. v. Tilray Inc. et al., case number <a href="tel:21-2-04697-1">21-2-04697-1</a>, in the Superior Court of Washington, King County.
&#8211;Editing by Karin Roberts.
Update: The story has been updated with additional counsel information.</div>

By Sam Reisman
Law360 (April 14, 2021, 9:20 PM EDT) &#8212; A Florida nursery has alleged in a new lawsuit that Canadian cannabis company Tilray pulled a &#8220;bait and switch&#8221; in 2015, promising to use its industry expertise to help the grower sec...

FLORIDA GROWER SAYS POT COMPANY SABOTAGED APPLICATIONS

Class action lawsuit filed against crypto wallet firm Ledger, Shopify over 2020 customer data breach

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<div id="article-body">Law360 (April 5, 2021, 6:10 PM EDT) &#8212; Cryptocurrency lending platform Nexo wrongly suspended Ripple&#8217;s digital asset XRP as a payment option and liquidated its customers&#8217; collateral to the tune of over $5 million in damages, a proposed class of customers has told a California federal court.
Nexo Financial LLC customer Junhan Jeong and a proposed class of customers said Thursday that Nexo breached its contract with users by freezing XRP as a usable asset on its platform without notice. Nexo also proceeded to sell off the XRP that customers were using as collateral and kept the proceeds for itself, the complaint says.
&#8220;Nexo&#8217;s suspension of XRP payments and liquidation of these customers&#8217; collateral … were unlawful,&#8221; the complaint said. &#8220;These customers are entitled to recover the value of their XRP when Nexo suspended its use and the value of their liquidated collateral as of breach.&#8221;
A Nexo representative told Law360 on Tuesday that the liquidation had been automatic and was in line with its terms and conditions. 
&#8220;As per our terms and conditions, some of clients&#8217; collateral was liquidated because they had failed to repay their credit lines or add collateral as the value of their existing XRP collateral decreased,&#8221; the representative said. 
The suit is part of the <a href="https://www.law360.com/articles/1363625">ongoing fallout</a> from the <a href="https://www.law360.com/agencies/u-s-securities-and-exchange-commission">U.S. Securities and Exchange Commission</a>&#8216;s <a href="https://www.law360.com/articles/1340078">December lawsuit</a> against <a href="https://www.law360.com/companies/ripple-labs-inc">Ripple Labs Inc</a>. and the subsequent collapse in value of its digital asset, XRP. In this instance, Nexo suspended customers&#8217; use of XRP the day after the SEC filed suit against Ripple.
Nexo is a banking and lending platform that allows customers to use cryptocurrency assets as collateral to borrow cash, according to its website. It also offers interest-earning accounts and boasts over 1 million users and $12 billion in assets under management, according to its website.
Nexo requires borrowers to maintain a certain ratio between the amount of cash borrowed and the value of their collateral, the complaint says. If the ratio becomes too high, customers must stake additional digital assets, pay back the loan, or in some cases, Nexo will sell their collateral after notifying the customer, according to the complaint.
On Dec. 23, the day after the SEC accused Ripple of conducting unregistered securities offerings, the price of XRP fell by roughly half over the course of hours, from about $0.45 to about $0.21, the complaint says. Nexo on Dec. 23 suspended the use of XRP as collateral or to pay off loans, but didn&#8217;t provide notice to customers, Jeong alleges.
Customers also couldn&#8217;t sell XRP on the market and use the proceeds to bolster their loan-to-value ratios, since removing the XRP in the first place could cause the ratio to spike such that Nexo would liquidate their collateral, the complaint says.
&#8220;Nexo thus effectively prohibited these customers from maintaining their [loan-to-value] ratios and then punished them for not maintaining their [loan-to-value] ratios,&#8221; the complaint said.
Nexo then sold off &#8220;massive quantities&#8221; of the collateral XRP, Jeong says. Jeong argues that this was contrary to Nexo&#8217;s assertion that it doesn&#8217;t have ownership rights over users&#8217; collateral.
Jeong argues that Nexo&#8217;s move wasn&#8217;t motivated by concerns about XRP&#8217;s legal status, since it suspended use of the asset for customers overseas as well as in the U.S. It also went on to sell off XRP itself, the complaint says.
&#8220;Nexo initiated the suspension of XRP payments because it did not want to be left holding XRP at its decreased value — not because the SEC&#8217;s announcement had in any way precluded the use or sale of XRP,&#8221; the complaint said.
The Nexo representative contested Jeong&#8217;s assertion that users hadn&#8217;t been notified about the liquidations. 
&#8220;Liquidations occur automatically as [loan-to-value ratios] reach 83.3%; borrowers receive three margin calls prior to liquidation,&#8221; the representative said. &#8220;&#8221;There&#8217;s no exception to this rule — it&#8217;s an automatic process, so the claimants were notified.&#8221; 
The representative also said the SEC&#8217;s decision to view XRP as a security could have influenced international regulators. 
&#8220;Generally, when an asset is deemed a security in the U.S., other countries are quick to follow in their footsteps and declare said asset a security, too,&#8221; the representative said. &#8220;The lawsuit against Ripple would undoubtedly cause significant uncertainty as to the treatment of XRP and transactions with it for the foreseeable future, so, upon advice by our legal counsel, we had to undertake the necessary actions to protect our clients and business.&#8221;
Nexo&#8217;s customers are seeking restitution for their alleged losses as well as a court ruling about the extent of Nexo&#8217;s contractual rights. The plaintiffs argue that those rights do not include the right to suspend customers&#8217; use of XRP for payments, and that Nexo doesn&#8217;t acquire ownership of the collateral that customers have posted.
Edward Normand of <a href="https://www.law360.com/firms/roche-freedman">Roche Freedman LLP</a>, counsel for the plaintiffs, highlighted a statement that Nexo released toward the end of December that explained its decision-making around the XRP suspension.
&#8220;What is from our perspective really noteworthy about that statement is how extreme Nexo&#8217;s claims of certain contractual rights were, and how unfair and onerous Nexo&#8217;s interpretation of those contractual rights were,&#8221; Normand told Law360 on Monday. &#8220;The lawsuit involves a combination of trying to get restitution for clients who are hurt, and trying to get clarification on the contractual rights that Nexo claims, which are very extreme and not beneficial to its clients.&#8221;
The Nexo spokesperson argued that users were responsible for understanding the company&#8217;s terms and conditions. 
&#8220;We simply can&#8217;t be held responsible for any client&#8217;s personal decision to not read up and any failure to repay loans in time, considering no technical errors occurred at our end and all repayment options, bar with XRP, remained available,&#8221; the representative said. 
Jeong is represented by Kyle W. Roche, Edward Normand, Stephen Lagos and Katherine Eskovitz of Roche Freedman LLP.
Counsel information for Nexo was not immediately available.
The case is Junhan Jeong v. Nexo Financial LLC et al., case number <a href="https://www.law360.com/cases/6066f55ec71c87035a465a22">5:21-cv-02392</a>, in the <a href="https://www.law360.com/agencies/u-s-district-court-for-the-northern-district-of-california">U.S. District Court for the Northern District of California</a>.
&#8211;Additional reporting by Dean Seal and Emilie Ruscoe. Editing by Orlando Lorenzo.
Update: This article has been updated with comment from Nexo.</div>

By Elise Hansen
Law360 (April 5, 2021, 6:10 PM EDT) &#8212; Cryptocurrency lending platform Nexo wrongly suspended Ripple&#8217;s digital asset XRP as a payment option and liquidated its customers&#8217; collateral to the tune of over $5 million in damage...

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