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In a 2014 lawsuit, 50 Cent (real name Curtis Jackson) was ordered to pay headphone makers Sleek Audio $16 million after the rapper severed his deal with Sleek to produce his own brand of headphones that a court ruled was “basically the same designs” as his Sleek-branded pair.
Following that decision, 50 Cent filed a malpractice suit against Garvey Schubert Barer (GSB), the law firm who represented him against Sleek Audio, alleging that the firm “didn’t adequately represent his interests in licensing negotiations and arbitration disputes with Sleek Audio.”
“Among GSB’s numerous failures was its inexplicable decision not to call technical and damages experts to rebut expert testimony offered by Sleek — failures relied upon by the arbitrator in crediting Sleek’s experts and entering an eight-figure award in Sleek’s favor,” 50 Cent’s new legal representation alleged in their suit against GSB.
As part of 50 Cent’s Chapter 11 reorganization plan, agreed to in July after he filed for bankruptcy in July 2015, the rapper owed Sleek Audio $17 million, making them 50 Cent’s largest outstanding debt. 50 Cent also owes $7 million in damages after losing a privacy lawsuit over a leaked sex tape.
In a deleted Instagram post following the $14.5 million decision, the rapper wrote, “I just got 14.5 million back from one Law Firm For malpractice. They fucked up so bad, I don’t think they should be practicing Law.”
On Monday, 50 Cent replaced that post with a Photoshopped image of the rapper sitting on a stack of money and a caption that read, “I retract my earlier statements about the legal services provided to me by the law firm of Garvey Schubert Barer. The law firm and I have settled our dispute and I consider the issue closed.”
“With respect to Sleek Audio, the $14.5 million settlement represents significantly more than the $12.5 million payable to Sleek Audio under the Bankruptcy Plan and more than half of the total amount owed under Mr. Jackson’s reorganization plan,” Craig Weiner, one of 50 Cent’s lawyers in the malpractice said, said in a statement.
“We are informed that these proceeds, together with other funds contributed by Mr. Jackson should position the Estate to provide for the remaining obligations to be satisfied in connection with this successful Chapter 11 Reorganization Plan. This is a most significant achievement, especially considering that the Plan was approved less than six months ago and provided Mr. Jackson with up to five years to satisfy all debts. Mr. Jackson is eager to move forward in doing what is best for his estate and creditors, and this settlement brings us one step closer toward that end.”
Sourced From – http://www.rollingstone.com/music/news/50-cent-to-receive-145-million-in-legal-malpractice-suit-w453975
Colonial Bank in Miami Beach, on August 17, 2009, days after it failed. The bank’s fraud with Taylor, Bean & Whitaker is the subject of a lawsuit against its auditor, PricewaterhouseCooper, which failed to catch the fraud for seven years. John VanBeekumMiami Herald
The largest-ever lawsuit against an auditing firm is set to open Monday in a Miami-Dade County Circuit Court, pitting Big Four firm PwC against a trustee of the defunct Taylor, Bean & Whitaker Mortgage Corporation.
At stake: $5.5 billion.
The lawsuit was filed in 2013 by a trust formed following the bankruptcy of Ocala-based Taylor, Bean & Whitaker, which in the early 2000s was one of the nation’s largest mortgage companies. The firm was raided by federal agents in 2009 for its part in a seven-year, multibillion-dollar fraud scheme with Colonial BancGroup.
According to the lawsuit, the fraud went undetected by PwC, the independent public auditor in charge of auditing Colonial, as a result of “gross negligence.”
The $5.5 billion action is one of a wave of suits against major auditing firms, including PwC, in the aftermath of the 2009 banking crisis. Most have alleged faulty work, said Jonathan Perlman, equity partner at Miami-based firm Genovese Joblove & Battista, who has prosecuted several cases against auditing firms. A majority of the cases have settled, including a suit brought against PwC for the alleged negligent auditing of failed brokerage MF Global Holdings Ltd. PwC paid $65 million in a settlement.
Few of the suits have gone to trial, Perlman said.
Still, Steven Thomas, lead trial lawyer for the trust, said he is confident this suit will succeed.
Thomas, who has has obtained several multimillion-dollar settlements and verdicts in cases involving negligent audits, said PwC’s alleged negligence is the “worst” of any case he’s had.
As early as 2002, six top executives at Taylor, Bean & Whitaker, including chairman Lee Farkas, colluded with two executives at Colonial to sign off on mortgage sales that didn’t exist. Colonial financed Taylor, Bean & Whitaker’s mortgages, but in order to bypass the federal lending limit, Colonial started registering loans from the mortgage company as sales instead.
Circumventing the lending limits allowed the fraud to grow exponentially as executives at each company worked to falsify documents and computer entries and shift money between Colonial bank accounts. Both Colonial and Taylor, Bean & Whitaker were raided on Aug. 3, 2009, and later filed for bankruptcy, leading to the sixth-largest banking failure in U.S. history.
Farkas was sentenced to 30 years in federal prison. Catherine Kissick at Colonial, who worked most closely with Farkas, received eight years in prison as part of a plea deal.
by Jeanne Sahadi @CNNMoneyApril 26, 2016: 5:49 PM ET
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The slug-fest between Donald Trump and New York Attorney General Eric Schneiderman over Trump University continues.
On Tuesday, a New York court ruled that Schneiderman’s $40 million civil suit alleging fraud against Trump University would still have to go to trial, even though Schneiderman had asked the court for a ruling based on the evidence already presented.
No date has been set for a trial. But according to a statement from Schneiderman, the judge “indicated her intention to move as expeditiously as possible.”
A spokesman for Schneiderman’s office said the trial could take place as early as this fall. If so, that timing could prove tricky for Trump should he be chosen as the GOP’s presidential nominee.
The Trump camp was happy with the court’s decision Tuesday.
“We are extremely pleased that the Supreme Court has yet again rejected the Attorney General’s attempt to avoid a trial.” said Alan Garten, an attorney for Trump.
The denial of Schneiderman’s request for summary judgment came after a New York court rejected the arguments of Donald Trump’s lawyers that Schneiderman’s fraud case should be tossed out.
Trump University, launched in 2005, was a real estate seminar business that promised to teach students the mogul’s investing techniques to get rich on real estate. The business, which has effectively been defunct for several years, is currently facing three lawsuits filed by and on behalf of former students who claim it was a fraud.
Schneiderman’s suit, filed in 2013, accuses Trump University of deceptive business practices, alleging that its advertisements made false claims, including that Trump handpicked the instructors and that consumers who took the seminars would receive access to private sources of financing — i.e., “hard money lenders.”
“It was a classic bait-and-switch scheme,” Schneiderman told CNN.
–CNN’s Drew Griffin contributed to this report.
CNNMoney (New York)First published April 26, 2016: 5:20 PM ET from http://money.cnn.com/2016/04/26/news/trump-university/
Wells Fargo & Co (WFC.N) admitted to deceiving the U.S. government into insuring thousands of risky mortgages, as it formally reached a record $1.2 billion settlement of a U.S. Department of Justice lawsuit.
The settlement with Wells Fargo, the largest U.S. mortgage lender and third-largest U.S. bank by assets, was filed on Friday in Manhattan federal court. It also resolves claims against Kurt Lofrano, a former Wells Fargo vice president.
According to the settlement, Wells Fargo “admits, acknowledges, and accepts responsibility” for having from 2001 to 2008 falsely certified that many of its home loans qualified for Federal Housing Administration insurance.
The San Francisco-based lender also admitted to having from 2002 to 2010 failed to file timely reports on several thousand loans that had material defects or were badly underwritten, a process that Lofrano was responsible for supervising.
According to the Justice Department, the shortfalls led to substantial losses for taxpayers when the FHA was forced to pay insurance claims as defective loans soured.
Several lenders, including Bank of America Corp (BAC.N), Citigroup Inc (C.N), Deutsche Bank AG (DBKGn.DE) and JPMorgan Chase & Co (JPM.N), previously settled similar federal lawsuits.
But Wells Fargo held out, and its payment is the largest in FHA history over loan origination violations.
Friday’s settlement is a reproach for “years of reckless underwriting” at Wells Fargo, U.S. Attorney Preet Bharara in Manhattan said in a statement.
“While Wells Fargo enjoyed huge profits from its FHA loan business, the government was left holding the bag when the bad loans went bust,” Bharara added.
The accord also resolved a probe by federal prosecutors in California of alleged false loan certifications by American Mortgage Network LLC, which Wells Fargo bought in 2009.
No one has been criminally charged in the probes, and the Justice Department reserved the right to pursue criminal charges if it wishes, according to the settlement.
Franklin Codel, president of Wells Fargo Home Lending, in a statement said the settlement “allows us to put the legal process behind us, and to focus our resources and energy on what we do best — serving the needs of the nation’s homeowners.”
Lewis Liman, a lawyer for Lofrano, did not immediately respond to requests for comment.
Wells Fargo on Feb. 3 said the settlement would reduce its previously reported 2015 profit by $134 million, to account for extra legal expenses.
The case is U.S. v. Wells Fargo Bank NA, U.S. District Court, Southern District of New York, No. 12-07527.
(Reporting by Jonathan Stempel and Nate Raymond in New York; Editing by Dan Grebler)
This legal blog, recently inducted into the ABA Journal’s Hall of Fame, has been providing a Top 10 list for the past five years. The way we’d describe 2015 is eclectic, full of interesting disputes covering a wide range of legal topics including privacy, intellectual property, bankruptcy, antitrust, contracts and defamation.
Our top disputes of 2015 leaves out some long-running ones that came to momentous decisions (see: “Happy Birthday” or Google Books) and shortchanges some new ones that will likely provide plenty to write about moving forward (see: Sean Penn vs. Lee Daniels or the “Bones” lawsuit). There’s obviously room for debate about what belongs on the list. Our goal is to spotlight legal controversy both significant and much-discussed within and outside Hollywood. (A separate list for top legal and regulatory matters on the international front is also forthcoming.)
Without further ado, here — in reverse order — are the legal dramas that were most gripping this past year:
10: Gawker steps into the legal ring against Hulk Hogan
Well, the first trial ever over a celebrity sex tape didn’t happen. Not yet. After a postponement, Hogan’s $100 million lawsuit over the gossip site’s posting of a sex tape excerpt, and Gawker’s “newsworthy” defense, is now primed to begin trial in March. But plenty of fireworks in the case proceeded nevertheless. Gawker filed a lawsuit against the FBI to uncover documents from the government’s investigation of the Hogan tape. As Gawker faced backlash over a separate story about a Conde Nast executive who allegedly was involved with a male escort, other tabloids gained access to and printed an extended transcript of the sex-tape footage that showed Hogan uttering the N-word and making racist comments. A tarnished Hogan has been hunting the source of that leak, blaming Gawker, and a Florida judge in October allowed extensive discovery including an examination of Gawker employee tech equipment. Recently, Gawker announced that it would be switching its coverage to more politically-focused matters.
9. HBO beats defamation claims over a child labor report
Gawker hasn’t gone to trial yet over its news practices, but HBO did after a seven-year buildup in a case that examined an episode of Real Sports with Bryant Gumbel where young children in India were shown hand-stitching Mitre-branded soccer balls for pennies or less in order to pay off their parents’ debts. The trial inside a New York federal courthouse lasted a full month! It opened with harrowing images and an attack on HBO’s journalism just as the pay network was celebrating documentary hits like The Jinx and Going Clear. HBOfought back against Mitre’s defamation claims, and a jury heard conflicting testimony about who was exploitative and who was socially responsible. HBO prevailed, which represented a good outcome for the network, but one that also leaves untouched the judge’s controversial decision that the plaintiff — a multinational corporation — shouldn’t be considered a “public figure” for the purpose of figuring out whether defamation occurred.
8. Sony Pictures settles claims by ex-employees over hacked data
A nightmare of the scariest sorts best describes what happened to Sony Pictures when hackers stole the company’s most sensitive information and distributed it to the public on the verge of the release of The Interview. The subsequent class actions from ex-employees were just part of the fallout from this situation. Sony’s responsibility for safeguarding private data came into examination in the litigation, but the case didn’t go far. In October, Sony came to a proposed settlement to pay at least $5.5 million to resolve negligence claims. Some of the provocative issues that came up in the case — for example, how do victims of identity theft prove specific hacks are to blamed for their troubles when hacking has now become commonplace — will await testing in future cases.
7. Sports broadcasting faces a flood of antitrust lawsuits in the wake of a judge’s May ruling
The health of over-the-air and cable television is increasingly tied to live sports, the phenomenon that resists ad-skipping and cord-cutting. Thus, an antitrust lawsuit against Major League Baseball over how telecasts of games are packaged and distributed represents a huge deal. In May, a federal judge in New York agreed to certify a class of plaintiffs who aim to cut down territorial restrictions on game telecasts. The following month, the National Hockey League settled its own class action by agreeing to allow fans to obtain price-discounted streams of their favorite teams. These developments encouraged a flurry of similar antitrust lawsuits against the National Football League and their broadcast partners. Those latter cases have now been consolidated. Meanwhile, MLB is now set to go to trial in January. The outcome will be worth the ticket.
6. Hollywood talent agencies go to war
Agents in the entertainment industry have been defecting to rival agencies for decades. There’s often a bit ofEntourage-like drama that follows such flights, but nothing quite like the lawsuit that resulted when 12 agents at Creative Artists Agency moved over to United Talent Agency and brought with them top clients including Will Ferrell, Chris Pratt and Ed Helms. California usually favors employee mobility, but CAA alleges a “lawless midnight raid” with claims of interference against UTA, breach of fiduciary duty and breach of the duty of loyalty against the agents themselves. Much of the dispute is now playing out in arbitration, but there’s a big piece being litigated in open court. Unless settled, the war between CAA and UTA figures to addressCalifornia’s “seven-year rule” limiting lengthy personal services contracts. Typically applied to talent, the arguments on this subject will impact the alignment of stars and their dealmakers for decades to come.
5. Judge stops Aretha Franklin documentary from playing Telluride
In terms of shocking legal decisions, witness a judge’s decision in September to grant iconic soul singer Aretha Franklin’s emergency injunction motion to stop the film Amazing Grace from premiering at the Telluride Film Festival. Usually judges frown on prior restraints under the First Amendment, but in this instance, the judge determined the Amazing Grace producer had a contractual obligation to get her permission to use old concert footage and thus violated her right of publicity when he didn’t. We think the judge got it terribly wrong. The parties in the dispute are still negotiating a settlement in time for Sundance next month. If that doesn’t happen, the case could provide an important appellate review squaring a celebrity’s publicity rights with free speech.
4. Relativity Media declares bankruptcy
Hollywood’s biggest Chapter 11 filing in years hasn’t provided a satisfying answer to the core mystery of what went wrong for a studio aiming to bring a Moneyball-type quantitative approach to producing films. The bankruptcy of Ryan Kavanaugh’s company did, however, deliver a front row seat to the kind of arm-twisting and jockeying that happens when big financial institutions lend hundreds of millions of dollars only to see debt mature. Besides providing months of vicious legal filings — from accusations of
