Mar 24, 2018 | Consumer Protection, Employment & Technology Archive
Defendants Falsely Claimed People Would Learn Secrets for Making Money on Amazon
On March 23, 2018, the Federal Trade Commission announced that it has charged a business opportunity scheme with falsely claiming that people who buy the defendants’ expensive “Amazing Wealth System” will learn “secrets for making money on Amazon” and likely earn thousands of dollars a month.
The defendants, AWS LLC, FBA Distributors LLC, FBA Stores LLC, Info Pros LLC, Online Auction Learning Center Inc. (Massachusetts), Online Auction Learning Center Inc. (Nevada), Christopher F. Bowser, Adam S. Bowser, and Jody Marshall, have been charged with violating the FTC Act and the Business Opportunity Rule. According to the FTC’s complaint, the “Defendants’ earnings claims regarding the Amazing Wealth System are false or unsubstantiated,” and “[f]ew, if any, consumers who purchases Defendants’ Amazing Wealth System earn the income Defendants advertise.”
According to the FTC, the defendants, who have no affiliation with Amazon.com, have made false or unsubstantiated earnings claims, such as, “Get started on Amazon and Make $5,000-$10,000 in the next 30 days. . . even if you have never sold anything online before.” They charge from $995 to more than $35,000 for a purported exclusive “plug-and-play system” that allows consumers to create a profitable online business selling products on Amazon.com.
Many of the strategies and techniques included in the “system,” such as posting fake product reviews, are, according to the FTC, deceptive and violate Amazon.com’s rules. As a result, purchasers who deploy the defendants’ system often experience problems with their Amazon stores, including suspension and the loss of their ability to sell on Amazon.com. According to the FTC’s complaint:
Defendants lure consumers into purchasing expensive business opportunities with purported “secrets for making money on Amazon.’ They represent that purchasers are likely to “create financial freedom” and earn thousands of dollars a month by implementing Defendants “systems for success on Amazon.” Contrary to Defendants’ promises, most, if not virtually all, purchasers do not earn the advertised income. Moreover, many elements of Defendants’ “system” violate Amazon.com Inc. ‘s policies. As a result, purchasers who deploy Defendants’ “system” often experience problems with their Amazon stores, including suspension and the loss of their ability to sell on Amazon.com.
In perpetrating their scheme, Defendants have violated the FTC Act and the Business Opportunity Rule by, among other things: (1) making false or unsubstantiated earnings claims; and (2) failing to furnish prospective purchasers with required disclosure documents.
(Emphasis added)
The court has appointed a temporary receiver over the corporate defendants, barred the defendants from making deceptive marketing claims, and frozen their assets pending resolution of the FTC’s motion for a preliminary injunction. The FTC seeks to end the alleged illegal practices and obtain money for return to injured consumers.
The United States District Court for the District of Nevada entered a temporary restraining order against the defendants on March 14, 2018.
Source: FTC.gov
Mar 23, 2018 | Consumer Protection, Employment & Technology Archive
Kehoe Law Firm, P.C. is making consumers aware that on March 13, 2018, a class action complaint was filed against Tip Top Capital Inc., an entity “engaged in soliciting and providing business loans to consumers,” which, beginning in or around March 2018, allegedly, contacted the Plaintiff’s cell phone from (323) 813-9507 to sell or solicit Tip Top’s services. According to the complaint, Tip Top Capital used an automatic telephone dialing system, and when Plaintiff answered the telephone call from Tip Top Capital, he heard a long pause before a representative began speaking to Plaintiff. The class action seeks statutory damages and other available legal or equitable remedies resulting from the alleged illegal actions of Tip Top Capital for negligently, knowingly and/or willfully contacting Plaintiff’s cell phone in violation of the TCPA. The class action complaint was filed in U.S. District Court, Central District of California (2:18-cv-02103)
Do You Believe You Are a Victim of Illegal Robocalls, Text Messages, “Junk” Faxes or Telemarketing Sales Calls?
If you have received illegal robocalls, text messages, “junk” faxes or telemarketing sales calls, you may be able to recover at least $500 for each illegal call, text or fax you received and, possibly, as much as $1,500 for each illegal call, text message or facsimile that was made either willfully or knowingly.
To help evaluate your potential legal claims under the Telephone Consumer Protection Act, please complete KLF’s confidential Robocall Questionnaire or, if you prefer to speak with an attorney, please complete the form above on the right, e-mail [email protected] or contact Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, for a free, no-obligation evaluation of your potential legal rights.
Mar 23, 2018 | Consumer Protection, Employment & Technology Archive
Kehoe Law Firm, P.C. is making consumers aware that on January 26, 2018, a class action complaint was filed against Future Now Energy, LLC for alleged violations of the Telephone Consumer Protection Act and the Illinois Consumer Fraud Act. In June 2016, the Plaintiff, according to the complaint, received automated telephone calls to his cell phone from (630) 701-7913 and (630) 246-4201. Allegedly, the calls to the Plaintiff’s cellular telephone were placed by Future Now Energy using a predictive dialer and without the prior authorization of the Plaintiff. The class action seeks, among other relief, statutory damages and injunctive relief. The class action complaint was filed in U.S. District Court, Northern District of Illinois, Eastern Division (1:18-cv-00580).
Do You Believe You Are a Victim of Illegal Robocalls, Text Messages, “Junk” Faxes or Telemarketing Sales Calls?
If you have received illegal robocalls, text messages, “junk” faxes or telemarketing sales calls, you may be able to recover at least $500 for each illegal call, text or fax you received and, possibly, as much as $1,500 for each illegal call, text message or facsimile that was made either willfully or knowingly.
To help evaluate your potential legal claims under the Telephone Consumer Protection Act, please complete KLF’s confidential Robocall Questionnaire or, if you prefer to speak with an attorney, please complete the form above on the right, e-mail [email protected] or contact Michael Yarnoff, Esq., [email protected], (215) 792-6676, Ext. 804, for a free, no-obligation evaluation of your potential legal rights.
Mar 23, 2018 | Securities Class Action Archive
ATEN Class Action Lawsuit Seeks Compensable Damages for Purchasers of ATEN Common Stock Between February 9, 2016 and January 30, 2018, Both Dates Inclusive
Kehoe Law Firm, P.C. continues its securities investigation on behalf of individuals who purchased, or otherwise acquired, the publicly-traded securities of A10 Networks (NYSE: ATEN) between February 9, 2016 and January 30, 2018, both dates inclusive (the “Class Period”). Recently, a class action lawsuit was filed in United States District Court, Northern District of California, to recover compensable damages caused by the A10 Networks Defendants’ alleged violations of the federal securities laws and to pursue remedies under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder.
The class action lawsuit alleges that the A10 Networks “Defendants made false and/or misleading statements and/or failed to disclose that: (1) A10 had issues with its internal controls that required an Audit Committee investigation; (2) A10’s revenues since the fourth quarter of 2015 were false due to improper revenue recognition which prompted an investigation by the Company’s Audit Committee; and (3) as a result, Defendants’ public statements were materially false and misleading at all relevant times.” (Emphasis added)
Investors who bought, or otherwise acquired, ATEN stock during the Class Period have until May 21, 2018 to file a motion with the Court to seek appointment as lead plaintiff.
Prior Announcements by A10 Networks
Preliminary Q4 2017 Results Announced
On January 16, 2018, A10 Networks announced its preliminary results for Q4 2017 (quarter ended December 31, 2017). According to the announcement:
A10 Networks expects total revenue in the fourth quarter 2017 to be between $55.5 million and $56.0 million, below its prior guidance of $64.0 million to $67.0 million. The company expects to report GAAP net income in the range of break-even to $0.01 per share. On a non-GAAP basis, the company expects to report net income between $0.05 and $0.06 per share, using approximately 74.6 million diluted shares, which is within the previous guidance for non-GAAP net income of $0.01 to $0.07 per share, using approximately 74.0 million shares on a diluted basis. GAAP and non-GAAP net income results include a benefit from performance-based variable compensation. A preliminary reconciliation between GAAP and non-GAAP information is contained in the financial statements below.
‘We are disappointed with our revenue results for the quarter, which were below our guidance primarily due to a shortfall in North America sales as we experienced lower than expected seasonal demand trends in the region. Despite this shortfall, we increased our cash and cash equivalents by $6.6 million, and continued to see strength for our security solutions,’ said Lee Chen, president and chief executive officer of A10 Networks. ‘Over the past two quarters, we have implemented a number of changes across the organization to help improve our execution and expand our presence in security to drive growth. We are making progress on these initiatives and continuing to work to align our sales and enablement engine with the growth opportunities in our market. As part of these initiatives, we have brought in Chris White to lead our global sales team, effective January 2, 2018. Chris is an accomplished sales executive with a long career in the cybersecurity industry, and his expertise in sales and channel leadership will be a solid asset to A10.’
(Emphasis added)
On this news, ATEN shares fell $0.99 per share, or more than 13% from its previous closing price, to close at $6.32 per share on January 17, 2018.
Postponement of Q4 2017 and Full Year Earnings Release and Conference Call
On January 30, 2018, A10 Networks announced that it was going to postpone the announcement and conference call related to its Q4 2017 and full year earnings. According to the announcement:
In the fourth quarter of 2017, the Company determined that a mid-level employee within its finance department had violated the Company’s Insider Trading Policy and Code of Conduct. As a result, the Company, with the assistance of outside counsel, conducted an email review and additional procedures to ensure the accuracy of its reporting of financial information for 2017. Such review and procedures did not identify matters that required material adjustments to be made. Nonetheless, the Company’s Audit Committee determined that further review and procedures relating to certain accounting and internal control matters should be undertaken. The Audit Committee’s investigation, which is being conducted with the assistance of outside counsel, is principally focused on certain revenue recognition matters from the fourth quarter of 2015 through the fourth quarter of 2017 inclusive.
The investigation is in its early stages. The Company is not able to provide a date as to when it will be completed, nor provide any assurance that the Company will not determine that material adjustments to its past financial statements are appropriate.
At the conclusion of the Audit Committee’s investigation, the Company will announce the scheduling of a conference call to discuss full financial results for the 2017 fourth quarter and full year.
(Emphasis added)
On this news, ATEN shares dropped $0.86 per share, or over 12% from its previous closing price, to close at $6.13 per share on January 31, 2018.
Delayed Filing of Annual Report on Form 10-K
On March 16, 2018, A10 Networks announced that it was going to delay the filing of its Annual Report on Form 10-K for the year ended December 31, 2017. According to the announcement:
As previously disclosed, the company’s Audit Committee, with the assistance of outside counsel, is conducting an investigation regarding certain revenue recognition and internal control matters. The investigation is focused on the time period of the fourth quarter of 2015 through the fourth quarter of 2017 inclusive. The Audit Committee has not reached any conclusions because the investigation is ongoing. Consequently, the company is not in a position to file the Form 10-K until after the completion of the Audit Committee’s investigation. While the company continues to work expeditiously to conclude this review and to file the Form 10-K as soon as practical, it does not anticipate filing its Form 10-K within the 15-day extension period provided under Rule 12b-25(b). (Emphasis added)
A10 Networks Investors and Shareholders
If you purchased, or otherwise acquired, the common stock of A10 Networks during the Class Period February 9, 2016 and January 30, 2018, both dates inclusive, and have questions or concerns about the securities investigation or your potential legal rights, please contact John A. Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected], complete the form above on the right or e-mail [email protected].
Investors who bought ATEN during the class period and suffered damages have until May 21, 2018 to file a motion with the Court to seek appointment as lead plaintiff. Please note that no class has been certified in the above action, and until a class is certified, you are not represented by counsel unless you retain an attorney of your choice. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the class member’s claim is typical of the claims of other class members, and that the class member will adequately represent the class. Under certain circumstances, one or more class members may serve together as “lead plaintiff.” Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.
Mar 23, 2018 | Shareholder & Investor Protection
SEC Charges Operators of Private Real Estate Fund Involved in Long-Term Scheme Which Raised More than $66 Million From Approximately 300 Investors
On March 22, 2018, the Securities and Exchange Commission announced that it settled charges against the operators of a real estate investment business who engaged in a multiyear scheme to bilk hundreds of investors, which included many retail investors, out of millions of dollars. The charged defendants will, as a result of the settlement, be ordered to return all ill-gotten funds to investors.
The SEC alleges in its complaint that from 2012 through 2016, Tobias Preston, his brother, Charles Preston, and his son, Caleb Preston, along with their investment advisory entity, McKinley Mortgage Co. LLC (“McKinley Mortgage”), raised more than $66 million from approximately 300 investors, most of whom were retail investors, by falsely stating that investments in their fund, Alaska Financial Company III, LLC (“Alaska Financial III”), were secure and that Alaska Financial III earned high returns from its portfolio. Alaska Financial III, however, has been insolvent and unable to generate sufficient revenue to meet its interest obligations for years.
According to the SEC, although a portion of the raised funds were invested as promised to investors, Tobias Preston misused more than $17 million to fund personal businesses and to pay for personal expenses, and McKinley Mortgage misused an additional $14 million to pay for its own operational expenses. The SEC also alleges that Charles Preston, Caleb Preston, and Accounting Manager Laura Sanford helped hide the fraud by preparing or distributing investor materials with false information and concealing information from Alaska Financial III’s auditors.
The SEC’s complaint charges violations of the anti-fraud and registration provisions of the federal securities laws. Without admitting or denying the SEC’s allegations, all defendants agreed to permanent injunctions against future violations. McKinley Mortgage Co. LLC, Tobias Preston, Charles Preston, and Caleb Preston consented to entry of a final judgment permanently enjoining them from future violations of Sections 5 and 17(a) of the Securities Act of 1933 (Securities Act), Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940. Caleb Preston also consented to a permanent injunction against future violations of Section 15(a) of the Exchange Act; affiliated entity McKinley Mortgage Company, LLC consented to a permanent injunction against future violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; and Laura Sanford consented to a permanent injunction against future violations of Section 17(a) of the Securities Act.
The Prestons and McKinley agreed, pursuant to settlements subject to court approval, to repay the almost $30 million they improperly received that has not already been returned to Alaska Financial III and to the appointment of new management at McKinley, Alaska Financial III, and their affiliates. Tobias Preston also will be ordered to return assets he improperly acquired and to pay a $2.5 million penalty. Charles Preston and Caleb Preston agreed to pay penalties of $425,000 and $150,000, respectively.
Source: SEC.gov
