Legal Library: Cases and Proceedings

In June 2022, the FTC took action against California-based Gravity Defyer Medical Technology Corporation and its owner Alexander Elnekaveh, filing a complaint in federal district court to permanently stop their allegedly deceptive pain-relief claims for Gravity Defyer footwear. In its complaint the FTC alleged that Elnekaveh violated a 2001 order barring him from such allegedly deceptive advertising by making scientifically unsupported claims and using misleading consumer testimonials to sell Gravity Defyer products. In February 2025, the FTC announced a final order setting the case, in which the defendants were barred from the allegedly deceptive advertising and required to pay a civil penalty of $175,000.

The FTC alleged that the Florida-based scam falsely told consumers that by selling memberships in the defendants’ programs, consumers were likely to earn large sums of money. For example, the website stated, “Consumers will earn between $500 and $12,500 per sale,” and “Every time one of our professionals closes a sale on your behalf, we will send you a huge commission check right to your doorstep.” The defendants allegedly charged consumers a substantial amount of money, ranging from $1,000 to $25,000. The complaint states, however, that the vast majority of consumers who paid the defendants never earned substantial income, and in fact many consumers earned nothing.

The Federal Trade Commission is sending 1,064 checks totaling more than $542,000 to consumers who were harmed by the bogus business and investment scheme.

The FTC alleged that Twitter’s deceptive use of user email addresses and phone numbers violated the FTC Act and the 2011 Commission order.

The Federal Trade Commission has filed an administrative complaint against Electronic Payment Systems and its owners, John Dorsey and Thomas McCann, for allegedly opening credit card processing merchant accounts for fictitious companies on behalf of Money Now Funding, a business opportunity scam that the FTC previously sued. By ignoring warning signs that the merchants were fake, Electronic Payment Systems assisted Money Now Funding in laundering millions of dollars of consumers’ credit card payments to the scammers from 2012 to 2013.

In a consent agreement settling the matter, which the FTC has accepted for public comment, Electronic Payment Systems and its owners have agreed to restrictions on the merchants for whom they can provide credit card payment processing services, as well as additional merchant screening and monitoring requirements. The FTC is not able to obtain a monetary judgment in this case because of the Supreme Court’s decision in AMG Capital Management v. FTC.

The Federal Trade Commission, working jointly with the U.S. Department of Justice, is mailing 1,179,803 refund checks totaling more than $505 million to people who were deceived by a massive payday lending scheme operated by AMG Services, Inc. and Scott A. Tucker.

The FTC along with law enforcement agencies from six states, sued Frontier Communications alleging that the company did not provide many consumers with Internet service at the speeds it promised them, and charged many of them for more expensive and higher-speed service than Frontier actually provided.

In October 2017, a federal district judge issued an order finding several defendants, including repeat offender Jared Wheat, in contempt for violating previous court orders related to the sale of weight-loss dietary supplements. The order imposed a more than $40 million judgment against the defendants, part or all of which the FTC may use to provide refunds to deceived consumers who bought the products. In May 2020, the Commission announced that it was mailing refunds totaling more than $8.5 million to defrauded consumers.

The FTC and the State of Maine’s complaint against Health Research Laboratories and its principal, announced in November 2017, alleged that the defendants deceptively marketed two of their health products, BioTherapex and NeuroPlus. In November 2018, the FTC mailed 16,596 checks totaling more than $750,000 to consumers who bought the two deceptively marketed supplements. The FTC and State of Maine subsequently filed a motion seeking a contempt order against the defendants in December 2019, for allegedly violating the final Commission order by continued to market and sell dietary supplements with claims that were not supported by competent and reliable scientific evidence. In November 2020, the FTC staff discontinued its contempt action and filed an administrative complaint against the defendants. The FTC announced a proposed order settling the complaint in March 2020.

The Federal Trade Commission authorized an administrative complaint, and a suit in federal court blocking the proposed merger of Rhode Island’s two largest healthcare providers. The agency alleged the deal would lead to higher prices and lower quality care. The FTC, jointly with the Rhode Island Office of the Attorney General, filed a complaint in federal district court seeking a temporary restraining order and preliminary injunction to stop the deal and to maintain the status quo pending an administrative trial on the merits of the case. On March 2, 2022, the Commission issued a statement regarding the parties’ decision to abandon the transaction.

Medical device company Boston Scientific Corp. agreed to divest certain assets to Varian Medical Systems to settle Federal Trade Commission charges that Boston Scientific’s proposed $4.2 billion acquisition of medical equipment and pharmaceutical supplier BTG plc would violate federal antitrust law. According to the complaint, Boston Scientific’s acquisition of BTG would harm consumers in the U.S. market for drug eluting beads, or DEBs, which are microscopic beads used to treat certain liver cancers. Interventional radiologists use DEBs, combined with chemotherapy drugs, in a procedure called transarterial chemoembolization. Under the proposed settlement agreement, Boston Scientific was required to divest to Varian its DEB business, as well as its bland bead product line. Bland beads are used in another type of procedure to block the flow of blood to a liver tumor. On Feb. 18, 2022, the Commission announced modifications to the divestiture agreement with Boston Scientific Corp.

The Federal Trade Commission sued to block Lockheed Martin Corporation’s $4.4 billion proposed vertical acquisition of Aerojet Rocketdyne Holdings Inc, the last independent U.S. supplier of missile propulsion systems. Aerojet supplies advanced power, propulsion, and armament systems, which are critical components for the missiles made by Lockheed and other defense prime contractors. The  agency’s  complaint alleged that if the deal is allowed to proceed, Lockheed will use its control of Aerojet to harm rival defense contractors and further consolidate multiple markets critical to national security and defense. On Feb. 15, 2022, the Commission issued a statement regarding the parties’ decision to abandon the transaction.

The Federal Trade Commission filed a law enforcement action to block U.S. semiconductor chip supplier Nvidia Corp.’s $40 billion acquisition of UK-based semiconductor design firm Arm Ltd., the largest transaction in the history of the semiconductor industry. The FTC’s action seeks to preserve competition in markets for computer chips used in datacenters and in automotive advanced driver assistance systems. The complaint named Nvidia Corp., Arm Ltd., and Arm owner Softbank Group Corp. In February 2022, Nvidia Corp. announced that it had terminated its proposed acquisition of Arm Ltd. (Arm) from SoftBank Group Corp, and the Commission dismissed the complaint.

In 2020, Danaher Corporation agreed to divest assets to settle Federal Trade Commission charges that its proposed $21.4 billion acquisition of General Electric’s biopharmaceutical business, GE Biopharma, would violate federal antitrust law. Sartorius Stedim Biotech S.A. is the approved divestiture buyer. Sartorius agreed to obtain the Commission’s prior approval if it proposed to acquire Novasep Process SAS’s chromatography equipment business. On Feb. 1, 2022, the Commission announced that it granted Sartorius’s petition to proceed with this acquisition.

New York-based supermarket operators The Golub Corp., which owns the Price Chopper chain, and Tops Market Corp. have agreed to divest 12 Tops supermarkets to C&S Wholesale Grocers to settle Federal Trade Commission charges that their proposed merger would likely be anticompetitive in 11 local markets in New York and Vermont. In those markets, according to the complaint, without a remedy the merger is likely to allow the newly merged company to increase prices above competitive levels, unilaterally or by coordinating with competitors. The merger is also likely to diminish the combined company’s incentives to compete on quality and service in its stores. The Decision and Order requires Price Chopper and Tops to divest the 12 Tops stores and related assets to C&S on a rolling basis, beginning by Jan. 17, 2022, at a rate of two stores pe week for six weeks. On Jan. 24, 2022, the Commission announced the final consent agreement in this matter.

Richard Fairbank, CEO of Capital One Financial Corp., has agreed to settle Federal Trade Commission charges that his March 8, 2018, acquisition of Capital One Financial (COF) stock violated the Hart-Scott-Rodino Act. Under a negotiated settlement, Fairbank will pay a $637,950 civil penalty. The complaint alleges that in 2018,  Fairbank violated the notice and waiting period requirements of the HSR Act because he did not file before acquiring COF voting securities in excess of the $100 million filing threshold, as adjusted (which at the time was $168.8 million).

Following a public comment period, the Federal Trade Commission has approved a final order settling charges that three PET resin producers’ proposed $1.1 billion joint acquisition out of bankruptcy of an under-construction PET production facility would violate federal antitrust law.