HSBC

Week Adjourned: 12.16.16 – Yahoo, DeVry, Gold Trading

Top Class Action Lawsuits

Yoohoo! Yahoo Breach…Again! Just in case you missed this—Yahoo got hit with a data breach class action lawsuit filed by a user who claims the internet company was negligent in protecting its customers data. Earlier this week, Yahoo revealed it had been the target of a data breach which affected 1 billion users. Yup—that’s ONE BILLION users.

Filed by New York resident Amy Vail, the suit alleges negligence, breach of express and implied contract, and violation of California’s unfair competition law.

In a statement issued Wednesday, December 14, 2016, Yahoo stated it believes that in 2013 hackers stole personal information related to 1 billion of its users by hacking their email accounts. This incident is separate from a similar one which Yahoo made public in September. However, the lawsuit contends that Yahoo has said some of the activity from both data breaches may be connected to a single state-sponsored actor.

According to the lawsuit, Yahoo does not know who took the information, and has been unable to identify the intrusion in which it was taken.

“As a result of defendant’s failure to maintain adequate security measures and timely security breach notifications, Yahoo users’ personal and private information has been repeatedly compromised and remains vulnerable. Further, Yahoo users have suffered an ascertainable loss in that they have had to undertake additional security measures, at their own expense, to minimize the risk of future data breaches,” the lawsuit states.

Yahoo revealed earlier this year that “state-sponsored actors” had hacked similar types of data from 500 million of its users in late 2014.

In a recent press release, Yahoo also noted that an investigation into the 2014 breach revealed the hackers’ ability, in some cases, to fake online “cookies”, enabling them to access users’ accounts without a password.

Vail is represented by Lee Cirsch, Robert Friedl, and Trisha Monesi of Capstone Law APC. The suit is Vail v. Yahoo, case number 3:16-cv-07154, in the U.S. District Court for the Northern District of California.

Top Settlements

Teaching by Example? (Or Not…) A $100 million settlement has been reached between DeVry University and the Federal Trade Commission (FTC) over allegations of for-profit education fraud, specifically, that the for-profit university used false statistics about its graduates’ job placement rates in order to lure students and increase enrollment.

According to the terms of the DeVry Settlement, DeVry will pay $49.4 million, which will be distributed by the FTC, and forgive $30.4 million in student loans and $20.2 million owed by former students. DeVry also said it had agreed to change its practices to “maintain specific substantiation” about graduates’ outcomes.

The FTC filed the lawsuit against DeVry in January, claiming the for-profit school deliberately misled customers through advertising claims it made in print, radio, online and TV that 90 percent of its graduates landed jobs within six months of initiating a job search.

Additionally, the suit claimed DeVry misled students when it claimed that its bachelor’s degree graduates had 15 percent higher incomes a year after their studies ended than graduates of all other colleges and universities, the FTC stated.

The terms of the settlement now “prohibits DeVry from including jobs students obtained more than six months before graduating whenever DeVry advertises its graduates’ successes in finding jobs near graduation.”

Further, the settlement stipulates that DeVry must notify students who are receiving debt relief, as well as credit bureaus and collections agencies. DeVry has also agreed to release transcripts and diplomas that they had been withholding from students who had outstanding debt.

The case is Federal Trade Commission v. DeVry Education Group Inc. et al., case number 2:16-cv-00579, in the U.S. District Court for the Central District of California.

All is Not Gold…? And the final biggie to report this week: a $60 million settlement has been granted preliminary approval, potentially ending an antitrust class action lawsuit against Deutsche Bank AG which claims the bank engaged in illegal price-fixing of the gold market.

The lawsuit was brought by investors and traders in March 2014, alleging UBS Deutsche, HSBC, Societe Generale SA, The Bank of Nova Scotia and Barclays conspired to manipulate the London gold fix, which is used as a benchmark to determine the price of gold and gold derivatives.

Under the terms of the preliminary agreement, the class would include anyone who sold physical gold or derivatives based on gold or bought gold put options on COMEX or other exchanges from January 1, 2004, through June 30, 2013.

The MDL is In Re: Commodity Exchange Inc., Gold Futures and Options Trading Litigation, case number 1:14-md-02548, in the U.S. District Court for the Southern District of New York.

Cha Ching! That’s a wrap folks! See you at the Bar!!

Week Adjourned: PetMatrix, Shop-Vac, HSBC

Top Class Action Lawsuits

Heads Up Dog Owners…Dog food manufacturer PetMatrix LC got hit with a consumer fraud class action over claims its dog treats could pose a health hazard for animals.

According to Charlotte Docken of California, who filed the proposed class action, her dog required surgery to clear an abdominal obstruction, allegedly after consuming one of the defendant’s treats.

Docken claims that advertising for the PetMatrix Dream Bone dog treats state that the products do not contain any rawhide but do contain 99 percent digestible ingredients. However, Docken claims the treats do contain a large amount of partially or completely indigestible ingredients, allegedly with the full knowledge of PetMatrix. So not cool.

The case is US District Court for the Central District of California Case number 8:16-cv-00994.

Top Settlements

Shop-Vac Settlement on the Way…A proposed settlement has been reached in a consumer fraud class action lawsuit (In re: Shop-Vac Marketing and Sales Practices Litigation, MDL No. 2380) about certain advertising related to Shop-Vac® brand wet/dry vacuums (the “Vacuums”).

In the class action, the plaintiffs allege that defendants Shop-Vac Corporation and Lowe’s Home Centers, LLC misrepresented the peak horsepower ratings and tank capacity of the Vacuums. Defendants deny these allegations.

Under the terms of the proposed Shop-Vac agreement, the manufacturers would extend their warranty on the motors of the Vacuums for at least 2 years. The proposed Settlement also includes changes to the descriptions of peak horsepower ratings and tank capacity on marketing materials.

The “Settlement Class Members” are defined as each person in the United States and its territories who, from January 1, 2006 to May 26, 2016, either (1) purchased a Vacuum, or (2) received a Vacuum as a gift, or (3) acquired possession of a Vacuum through other lawful means, other than for resale or distribution.

Settlement Class Members do not need to do anything in order to qualify for the settlement benefits. The manufacturer’s warranty extension will automatically apply and the changes to the peak horsepower ratings and tank capacity descriptions will be made.

HSBC Gets Slammed. Here’s a whopper—almost 15 years in the making! HSBC has agreed to pony up a massive $1.575 billion settlement ending a securities class action lawsuit pending against a unit of HSBC Holdings Plc (HSBA.L). The 14-year old lawsuit stems from the Household International consumer finance business that the British bank bought in 2003 for $14.2 billion.

The settlement agreement effectively avoids a second trial, scheduled to begin last week in the Chicago.

The lawsuit (Jaffe et al v Household International Inc et al, U.S. District Court, Northern District of Illinois, No. 02-05893), was filed in 2002, by shareholders who alleged the company inflated its share price by concealing its poor lending practices and loan quality. The HSBC share price fell more than 50 percent between mid-2001 to October 2002, when the defendant agreed to pay $484 million to settle predatory lending claims brought by US state regulators.

By March 2009, HSBC shut down much of its US consumer finance business having taken tens of billions of dollars of write downs for bad loans associated with its subsidiary.

Ok, that’s a wrap folks…Have a good one. See you at the Bar!

Week Adjourned: 3.4.16 – Tampon Tax, Macy’s, HSBC

Top Class Action Lawsuits

They’re Taxing What?? Not that I have a bias or anything, but it’s about time! Yup—it’s time to end the tampon tax! And five women in New York are just the gals to do it. The filed a tampon tax class action against the New York State Department of Taxation and Finance, claiming that the 4% sales tax charged by the state on tampons and other feminine hygiene products violates the Equal Protection clauses of the United States and New York State Constitutions. The suit cites the fact that the same sales tax does not apply to “medical” items like Rogaine, adult diapers and dandruff shampoo. Seriously—Rogaine has a “medical” classification?

The ladies are seeking a permanent tax exemption for feminine hygiene products and a full tax refund for all women who have purchased tampons or pads in New York over the last two years.

According to the lawsuit, most women spend $70 on tampons and pads annually. The state of New York collects $14 million a year from taxes on tampons from 5 million New Yorkers. That’s a lot of dough, Joe.

Apparently, New York State exempts medical items from its sales tax, but excludes pads and tampons from the “medical” classification. According to the Department of Taxation’s guide for retailers, feminine hygiene products are “generally used to control a normal bodily function and to maintain personal cleanliness.” This differentiates them in the fine print from over-the-counter medication for a “vaginal infection,” which treats a “specific medical condition.” So, how do they define “treat” ? (Conveniently, it would seem. Pardon my bias).

However, the plaintiffs contend that pads and tampons are necessary for the preservation of health, especially when compared to medicated Chapstick for a coldsore, by way of example.

In February, legislation was introduced that would exempt feminine hygiene products like tampons and pads from state sales tax, calling the tax “a regressive tax on women and their bodies that harkens back to a time when the laws were written by men for women.”

Go get’em!!!

Wage & Hour Woes for Macy’s… Macy’s got hit with a proposed employment class action alleging unpaid wages and overtime and failure to pay minimum wage this week. Lost count of how many retailers have been slapped with these charges.

This suit is brought by former employee Yulie Narz, who alleged in the complaint that Macy’s Stores West Inc. has “systemic illegal employment practices” in place, enabling the retailer to not pay employees for mandatory security checks of their bags conducted before meal breaks and at the end of shifts.

Narez worked for Macy’s from November 2013 through July 2015, according to the lawsuit. She also alleges the retailer fails to pay employees, who work shifts of five hours or more, for a 30-minute meal break or 10-minute rest breaks for every 3.5 hours of work, as required by California labor law. This has resulted in a loss of overtime pay and generally improper wage statements, according to the complaint.

“Plaintiff is informed and believes … that defendants had a consistent and uniform policy, practice and procedure of willfully failing to comply with [labor laws],” Narez states. “Defendants … have acted intentionally and with deliberate indifference and conscious disregard to the rights of all employees in receiving minimum wages and overtime wages for all hours worked.”

The case is Narez v. Macy’s West Stores, Inc., number 5:16-cv-00936, in the U.S. District Court for the Northern District of California.

Top Settlements

Homeowners Win One. Here’s a win for the good guys. A force-place insurance settlement has been reached between HSBC and the office of the Massachusetts Attorney General Maura Healey for $4 million, ending allegations that HSBC took illegal commissions and kickbacks for forced-place insurance policies. Nice…and why not, right?

Reportedly, thousands of borrowers were allegedly improperly charged force-placed insurance premiums, however, the affiliate did not perform the traditional functions of an insurance company. HSBC allegedly received compensation tied to force-placed insurance premiums until 2012, which the AG’s office believes was a conflict of interest.

The settlement will provide $2.67 million in restitution to affected Massachusetts homeowners, and $1.4 million to the state of Massachusetts.

Ok, so that’s a wrap folks… The sun is over the yard-arm and cocktails are in order—see you at the Bar!

Week Adjourned: 6.11.11

Top Class Actions

Never mind what’s in your wallet…Capital One could be more concerned with what’s left in theirs soon, as it seems they may have been doing a little corporate pick pocketing… it’s very popular these days. A lawsuit seeking class action status was just filed alleging Capital One (NYSE:COF) misrepresented its “Transfer Balance Program” program, resulting in higher-than-expected interest rates for consumers.

The case, filed June 9, 2011, in the United States District Court for the Eastern District of Michigan, alleges that Capital One deceived cardholders by claiming that a cash advance obtained through the company’s transfer balance program would include a 0 percent Annual Percentage Rate (“APR”) for one year. The company also allegedly promised that credit balances on regular monthly purchases (“purchase balances”) would incur no interest as long as the balance was paid within 25 days.

However, according to the complaint, cardholders who took advantage of the transfer balance program were charged interest rates exceeding 13 percent on their purchase balances, even if the balance was paid on time, because payments were applied to the transfer balance rather than to the purchase balance.

The lawsuit alleges that Capital One’s actions constitute a breach of contract and the duty of good faith and fair dealing, in addition to violations of the Virginia Consumer Protection Act and the Michigan Consumer Protection Act. The case also argues that Capital One received unjust enrichment through the alleged scheme.

Ah yes, unjust enrichment…that old chestnut. Seems it never grows old.

Top Settlements

One for the Madoff Meter… While we’re on the subject of things financial—a settlement was recently reached between a group of investors and HSBC Holdings PLC, with Europe’s largest bank agreeing to pay $62.5 million to the investors, who allegedly lost money in association with a Madoff securities fraud.

It seems that the investors had placed funds with Ireland-based Thema International Fund Plc, the assets of which were held with Bernard L. Madoff LLC, according to a statement by HSBC. Bloomberg reports “Thema Fund, a so-called Madoff feeder fund, was controlled by Bank Medici AG. Bank Medici with its founder Sonja Kohn is part of a $59 billion suit by the trustee liquidating Madoff’s firm.” This has to be one of the worst trustee jobs in history, I would think.

Reportedly, Thema was one of several funds placed in the custodianship of HSBC units, which subsequently funnelled monies to Madoff. The settlement is pending court approval.

A statement issued by HSBC stated that the settlement “shall in no way be construed” as an admission of fault. HSBC still faces other Madoff-related lawsuits in other countries including Germany, and Luxembourg. It’s the never ending story. 

And it’s a victory for the Ladies. A federal judge in Washington has approved a $32 million settlement of a class action brought against Wells Fargo Advisors by a group of women who alleged gender discrimination.

Reportedly, some 3000 female financial advisors make up the class. The suit was filed in 2009 by three female financial advisors who worked at Wachovia Securities. According to a report in the Wall Street Journal the women claimed that compared with their male counterparts, female advisors were provided fewer business opportunities by the company. The women also claimed that female advisors were at a disadvantage in other ways, specifically with respect to career advancement, work assignments and distribution of accounts.

The class covers all women who were employed as financial advisors by Wachovia or Wells Fargo at any time between March 17, 2003, and January 25, 2011, which is the date a preliminary approval was reached. The class also covers women who were employed by Wells Fargo Investments LLC and women who were employed as advisors by Prudential Securities Inc. or A.G. Edwards & Sons Inc. as of the dates those companies merged with Wachovia. I wonder who’s next?

OK. That’s it for this week. See you at the Bar.

Week Adjourned: 10.23.09

Top Class Actions

Wynn Gambling with Employees Health? After all the noise about second hand smoke being a known risk factor for cancer, you would think the last thing an employer would want to do is wilfully expose its employees to the carcinogen. At the very least, why risk the lawsuit, right?

Wrong. The employees at Wynn Las Vegas Hotel and Casino filed a class action lawsuit this week, alleging that Wynn failed to provide a safe work environment for its employees and failed to protect them from the effects of second-hand smoke.

According to the suit, the risks are exacerbated for employees because not only is smoking permitted 24 hours a day, 7 days a week, but it is also encouraged. In some cases the casino gives cigarettes away to gamblers on the casino floor. What? That’s bad judgement no matter how you look at it.

The suit further claims employees that complain about the smoke risk losing their jobs. So, let’s see, you have to choose between risking your health or your livelihood. Or sue. Well—I’d choose the last option as well.

Top Settlements

New Math on Big Bank Fees: Big Banks = Big Fees = Big Lawsuits = Big Settlements. At Continue reading “Week Adjourned: 10.23.09”