Noting That Wheels Of $600,000 Deal Started Turning Within Two Weeks Of Payee’s 18th Birthday, New York Court Rejects Structured Settlement Factoring Company’s Request For Judicial Approval

Noting That Wheels Of $600,000 Deal Started Turning Within Two Weeks Of Payee’s 18th Birthday, New York Court Rejects Structured Settlement Factoring Company’s Request For Judicial Approval

A structured settlement was set up for payee Daijuan Matos in 2008.  He turned 18 in 2018.  Within two weeks of his 18th birthday, and while he was still in high school, he had not only been approached by a factoring company seeking to purchase his future payments, but had agreed to sell a portion of those payments.  Under the terms of the deal he agreed to, he would sell $1,917.48 out of each payment of $2,750.00 due to be…

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Court Reverses Course, Strikes State Attorney General’s Lawsuit Against Litigation Funder Over NFL, 9/11 Responder Transactions

Court Reverses Course, Strikes State Attorney General’s Lawsuit Against Litigation Funder Over NFL, 9/11 Responder Transactions

A federal court that previously ruled  that the structure of the Consumer Financial Protection Bureau is unconstitutional, while allowing the New York Attorney General to proceed with claims in the same lawsuit, now has reversed course, and dismissed the New York AG’s claims against a litigation funding company accused of scamming 9/11 responders and ex-professional football players. In a September 12 ruling, Judge Loretta Preska dismissed the New York Attorney General’s federal and state law claims against RD Legal Funding over…

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Federal Appeals Court Revives Life Settlements Claims, On Both Sides Of Lawsuit

Federal Appeals Court Revives Life Settlements Claims, On Both Sides Of Lawsuit

A federal appeals court revived claims on both sides of a disputes over a life settlements transaction. In an opinion released last week, Sun Life Assurance Co. of Canada v. Imperial Premium Fin., LLC, Nos. 17-10189, 17-10415 (11th Cir. Sept. 18, 2018), the 11th Circuit Court of Appeals reversed a U.S. District’s Court’s rulings, and is now allowing both the insurer and the life settlements company to proceed with previously-dismissed claims. Summarizing the ruling, the 11th Circuit Court of Appeals…

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CFPB Sues Pension Factoring Companies Over Misleading Business Practices

CFPB Sues Pension Factoring Companies Over Misleading Business Practices

The Consumer Financial Protection Bureau this month sued a group of pension advance company over allegedly misleading practices. The CFPB alleges that the companies violated the Consumer Financial Protection Act of 2010, 12 U.S.C. § 5536(a)(1)(B), by representing that their pension advances were not loans, were not subject to lending laws, and “were comparable in cost to, or cheaper than, credit card debt when, in actuality, the pension-advance products were loans, and were subject to interest rates that were substantially…

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Lawsuit Alleges Financial Advisers Should Have Known Investments With Pension Factoring Company Were Questionable, Says News Report

Lawsuit Alleges Financial Advisers Should Have Known Investments With Pension Factoring Company Were Questionable, Says News Report

The Pittsburgh Post-Gazette today reported that a recently-filed lawsuit alleges that financial advisers and others should have known that investments in a pension-factoring company were questionable. In the story (Investors, Regulators Can’t Find Architect Of Massive Pension Scheme, available here), Len Boselovic reports that “Scott Kohn, an ex-felon who orchestrated a nationwide scheme that victimized retirees as well as investors seeking safe monthly income, is nowhere to be found.” Boselovic said that officials “from Pennsylvania’s Department of Banking and Securities trying…

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Attorney Reportedly Opposes Penalties Following Magistrate’s Recommendations In Life Partners Litigation

Attorney Reportedly Opposes Penalties Following Magistrate’s Recommendations In Life Partners Litigation

A news report says that the lawyer for a bankrupt life settlement company has filed papers opposing penalties against him following a magistrate’s ruling in a long-running legal dispute. Says Law360: “The former top lawyer for bankrupt life settlement trader Life Partners Holdings Inc. urged a federal judge in Texas to reject a report and recommendation from a magistrate judge that he be held liable for the ‘bad actions’ of the company’s former CEO, who was found liable for securities violations.”…

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Commentary: Litigation Funders Are Fighting To ‘Stay In The Shadows’

Commentary: Litigation Funders Are Fighting To ‘Stay In The Shadows’

How much control do litigation funding companies have over the lawsuits they invest in? Litigation funders say ” ‘none,’ but the real answer is ‘we really don’t know.’” So writes Lisa A. Rickard, President of the U.S. Chamber of Commerce’s Institute for Legal Reform in a commentary that appeared yesterday in the New York Law Journal. In the piece, entitled Third-Party Litigation Funders Fight Hard To Stay In The Shadows, Rickard says that “the third-party litigation finance industry must be…

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Justice Department: Former Attorney Fraudulently Used Client Identities To Obtain Litigation Funding Advances

Justice Department: Former Attorney Fraudulently Used Client Identities To Obtain Litigation Funding Advances

A federal grand jury has indicted a former Georgia attorney for using client identifies to obtain litigation funding advances, according to the U.S. Department of Justice. The U.S. Attorney’s Office for the Northern District of Georgia announced yesterday that Chalmer “Chuck” Detling had been arraigned on multiple counts of wire fraud and identity theft, based on a federal grand jury indictment that alleged that Detling used the identities of 36 former clients without their authorization to obtain, and pocket for…

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What If A Factoring Company Tries To Buy Payments That Don’t Exist? Court Dismisses Petition By Factoring Company

What If A Factoring Company Tries To Buy Payments That Don’t Exist? Court Dismisses Petition By Factoring Company

A structured settlement factoring company filed a petition for approval of a transfer of the right to receive future structured settlement payments.  The petition alleged that the proposed transfer from the payee to the factoring company would meet the requirements of the New York Structured Settlement Protection Act, which provides that such transactions are not legally effective unless and until a court approves the transfer based on a finding that the transfer meets the requirements of the New York SSPA….

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Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

The Wall Street Journal recently reported that Future Income Payments, LLC, has apparently collapsed and left investors “stranded.” In an article published July 24 (here), the Journal last month said that the company “appears shut” and the man who ran it, Scott Kohn, has disappeared. The Journal said that Kohn was a  “64-year-old felon” who “ran a company from a Nevada strip-mall mailbox” and that investors now say the company “took them for more than $100 million in losses.” Said…

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