Legal Library: Cases and Proceedings

Investment advisor Third Point LLC and three funds that it controls have agreed to settle Federal Trade Commission charges that the funds violated the premerger notification and waiting period requirements of the Hart-Scott-Rodino Act, or HSR Act, after they acquired the voting securities of DowDuPont Inc. According to the complaint, on Aug. 31, 2017, the shares of Dow Inc. held by the three Third Point funds – Third Point Partners Qualified L.P., Third Point Ultra, Ltd., and Third Point Offshore Fund Ltd. – converted to shares of the newly formed DowDuPont Inc. following the merger of Dow Inc. and E.I. du Pont de Nemours & Company. The three funds have agreed to collectively pay $609,810 in civil penalties, and they, together with Third Point LLC, will be barred from committing future violations of the HSR Act in connection with corporate consolidations.

The FTC and the State of Connecticut sued the marketers of LeanSpa in December 2011, charging that they used fake websites to promote acai berry and “colon cleanse” weight-loss products, and falsely told consumers they could receive free trials by paying a nominal shipping and handling cost. In reality, consumers paid $79.95 for the trial, and for recurring monthly shipments of the product that were hard to cancel. The LeanSpa marketers settled the complaint in 2014, agreeing to stop their allegedly deceptive practices and surrender assets for consumer redress. In October 2015, the FTC announced it was mailing more than 23,000 checks totaling over $3.7 million to consumers who bought LeanSpa products. In December 2019, the FTC sent a second round of checks totaling over $321,000 to consumers who bought LeanSpa products.

The FTC’s December 2016 complaint alleged that between 2011 and 2016 the defendants called timeshare property owners falsely claiming that they had a buyer or renter ready to buy or rent their properties for a specified price, or making false promises to sell the timeshares quickly. A May 2018 settlement order permanently banned the defendants from timeshare resale services and telemarketing and required them to surrender approximately $3.4 million worth of assets to the Commission. On October 10, 2019, the FTC mailed 8,088 refund checks totaling nearly $2.7 million to consumers defrauded by the scheme.

The operator of a job placement company that deceived consumers with false promises of access to high-paying finance jobs and resume repair services for non-existent jobs will be permanently banned from providing employment services under the terms of a settlement with the Federal Trade Commission.

Google LLC and its subsidiary YouTube, LLC agreed to pay a $170 million civil penalty to the Federal Trade Commission and the New York Attorney General to settle allegations that the YouTube video sharing service illegally collected personal information from children without their parents’ consent in violation of the Children’s Online Privacy Protection Act Rule (COPPA).

LightYear Dealer Technologies, LLC settled Federal Trade Commission allegations that the auto dealer software provider failed to take reasonable steps to secure consumers' data, leading to a breach that exposed the personal information of millions of consumers. 

In July 2017, the FTC obtained court orders against this Maryland-based office supply operation charged with tricking small businesses, non-profit organizations, and other consumers into paying for overpriced office and cleaning supplies they never ordered. The stipulated orders setting the FTC’s complaint barred the company and its principals from telemarketing office and cleaning supplies. It also imposed a financial judgment against them, resulting in the Commission sending  refund checks totaling more than $11.6 million to small businesses and other organizations in August 2019.

In February 2017, the FTC and the Maine AG’s office announced a complaint and three settlements with dietary supplement marketers who allegedly used radio infomercials deceptively formatted as talk shows and print ads featuring fictitious endorsers to advertise supplements purporting to improve memory and to reduce back and joint pain. The settlement orders resolving charges against the named in the complaint bar them from making similar deceptive claims, and prohibit them from engaging in a wide range of marketing practices that have caused serious financial injury to consumers. In April 2015, the FTC sent refunds to consumers who bought one of the company deceptively marketed supplements, CogniPrin. In August 2019, the FTC send refunds to consumers who bought FlexiPrin, another supplement the company sold.