Dec 21, 2017 | Consumer Protection, Employment & Technology Archive
Lawsuit Against Seterus, Inc. Which Sought to Stop Autodialed Debt Collection Calls Made to Consumer Cell Phones Without Prior Express Written Consent DISMISSED
NOTE: The below-described action against Seterus (Corrigan v. Seterus, Inc., 3:17-cv-02348-RDM) was voluntarily dismissed by both parties via a “Stipulation of Dismissal” signed by both parties on May 10, 2018. The “Stipulation of Dismissal” did not indicate whether a settlement was reached, but merely that Plaintiff’s individual claims against Defendant Seterus, Inc. were dismissed with prejudice, and the claims of the putative class were dismissed without prejudice. The presiding federal judge signed an Order closing the action on May 11, 2018.
On December 19, 2017, a Telephone Consumer Protection Act (“TCPA”) class action lawsuit was filed against Seterus, Inc. in United States District Court, Eastern District of Pennsylvania, “. . . to stop [Seterus’s] practice of making autodialed calls to consumers’ cell phones nationwide without first obtaining their prior express written consent and to obtain redress for all persons injured by its conduct.” [Emphasis added]
Seterus claims it is “one of the nation’s leading specialty loan servicing companies.” According to the TCPA class action complaint, Seterus “made repeat autodialed calls” to the Plaintiff and other putative class members in an effort to collect a debt and “[w]orse yet, . . . Seterus made these autodialed calls to the cell phone numbers of individuals who owed no debt to Seterus whatsoever and who were not delinquent on any of their loan, all in violation of the Telephone Consumer Protection Act . . ..” [Emphasis added]
The class action complaint alleged that Seterus made autodialed debt collection calls “despite the fact that neither Plaintiff nor the putative members of the Class ever provided Seterus with their prior express written consent to be called.” Seterus, allegedly, caused actual harm to the Plaintiff and class members, “including the aggravation and nuisance that necessarily accompanies the receipt of such calls.” [Emphasis added]
The class action seeks injunctive relief to stop to stop Seterus from “all autodialed calling activities to consumers’ cell phone[s] without first obtaining prior express written consent, as well as an award of statutory damages to the members of the Class under the TCPA . . ..” [Emphasis added]
TCPA Autodialed Debt Collection Calls – Common Factual Allegations in the Complaint
Common factual allegations against Seterus detailed in the class action complaint:
-Seterus has placed calls for the purpose of debt collection from thousands of consumers.
-Seterus placed and continues to place repeated, harassing autodialed calls to consumer cell phones without prior consumer express consent to be called.
-The most serious types of autodialed calls by Seterus are calls to consumers who, in fact, have no debt to Seterus and not delinquent on any of their loans.
-An individual may start receiving autodialed calls due to Seterus’s skip tracing, which indicates the person called has some connection to the true debtor – connections which could include one being, for example, a relative or roommate, as well as cellular telephone numbers no longer used by the debtor.
TCPA Autodialed Debt Collection Calls – Plaintiff’s Facts
-In or around August 2017, Plaintiff began receiving autodialed calls to Plaintiff’s cell phone from (866) 570-5277 about attempted collection of unpaid mortgage payments related to her daughter.
-Plaintiff, when answering, noticed a slight pause (indicative of an automatic telephone dialing system) before Plaintiff was connected to a live agent.
-Plaintiff requested Seterus cease making calls to Plaintiff’s cell phone, in addition to explaining that the caller was contacting the wrong person.
-Seterus called Plaintiff’s cell phone at least 25 more times, and Plaintiff never conducted business with Seterus, is not delinquent on her mortgage, and has never provided prior express consent to be called.
The Seterus Autodialed Debt Collection Class
The class action was brought on behalf of all individuals in the United States who received a telephone call on their cell phone from or on behalf of Defendant between four (4) years prior to the filling of the class action complaint through the present for which Seterus had no record of prior express written consent to make such telephone call.
Have You Received Unsolicited or Unwanted Telemarketing Calls, Autodialed Calls, Robocalls or Text Messages?
If you have received unwanted, unsolicited or harassing telemarketing calls, autodial calls, robocalls or text messages and would like to speak privately with an attorney to learn more about your potential legal rights, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Dec 21, 2017 | Securities Class Action Archive
Novan Stock Drop After Novan Announces Clinical Trials for Acne Treatment Yielded Different Results
On January 27, 2017, Novan announced that its two “replicate” Phase 3 clinical trials for its topical acne treatment had yielded different results. Novan revealed that one trial showed statistical significance for all three co-primary endpoints and the other trial showed statistical significance for only one co-primary endpoint.
Novan Stock Drop
On this news, shares of Novan’s stock dropped from a close of $18.70 per share on January 26, 2017 to a close of $4.86 per share on January 27, 2017, a 74% decline.
“Novan Reports Topline Results from SB204 Phase 3 Pivotal Trials”
On January 27, 2017, Novan’s press release stated that Novan
. . . announced top-line results from the Company’s two, replicate Phase 3 pivotal clinical trials for SB204 in the treatment of acne vulgaris. In the intent-to-treat analysis, Novan’s topical nitric oxide-releasing product candidate SB204 demonstrated statistical significance (p<0.05) compared to vehicle on all three co-primary endpoints in NI-AC302, but demonstrated statistical significance on only one of three co-primary endpoints in NI-AC301. The three co-primary endpoints included the absolute changes in inflammatory and non-inflammatory lesion counts and proportion of patients achieving success on the Investigator Global Assessment, or IGA, at week 12. Success was defined as an improvement of at least two grades in the IGA score from baseline and an IGA score of 0 or 1, or “clear” or “almost clear.” [Emphasis added]
In these two Phase 3 multi-center, randomized, double-blinded, vehicle-controlled, parallel group pivotal clinical trials, NI-AC301 and NI-AC302, a total of 2,639 patients ages 9 and older with moderate to severe acne were enrolled across a total of 110 sites in the United States, randomized in a 1:1 ratio to SB204 Gel 4% topically once-daily or vehicle gel topically once-daily and treated for 12 weeks. No new safety signals were observed and both treatments were generally safe and well tolerated, with less than 2% of patients discontinuing due to treatment-emergent adverse events in each trial. Summary statistics are based on the use of a multiple imputation methodology for missing data.
Novan’s press release also stated:
“While we are pleased with the results of the NI-AC302 trial that met the regulatory requirement for statistically significant efficacy of SB204, we are disappointed with the discordant results of NI-AC301. Our team has not yet received the full data set and we intend to provide an update on the SB204 program after our complete analysis,” said Nathan Stasko, PhD, President and CEO of Novan. “Despite these discordant results, we believe in the potential of nitric oxide’s multiple, well-documented mechanisms of action and the data we have recently generated for our SB206 anti-viral and SB414 anti-inflammatory product candidates. We continue to look forward to near term clinical results from our SB208 anti-fungal program in the second quarter of 2017 and advancing our pipeline of innovative therapies for patients suffering from skin diseases.” [Emphasis added]
[Novan] believes that its cash on hand is sufficient to fund operations at least through the end of 2017, of which the allocation of capital will be dependent upon further assessment of the SB204 Phase 3 trial results and data from other platform programs.
Novan, Inc. – Investors – January 27, 2017 Press Release
Novan Stock Drop & Novan Class Action Complaint Filed
A class action lawsuit has been filed on behalf of investors that purchased Novan, Inc. (NASDAQ:NOVN) securities between September 26, 2016 and August 1, 2017, 2017, inclusive (the “Class Period”) and/or pursuant to its September 26, 2016 Initial Public Offering.
The class action complaint alleges that, throughout the Class Period, Defendants made materially false and/or misleading statements and/or failed to disclose that: (1) Novan had initiated and conducted two identical Phase 3 clinical trials for its lead product candidate SB204; (2) the two SB204 Phase 3 clinical trials were, in fact, not identical; and (3), consequently, Novan’s financial statements were materially false and misleading at all relevant times.
Novan Shareholders
If you purchased or otherwise acquired Novan securities between September 26, 2016 and August 1, 2017 and/or pursuant to Novan’s September 26, 2016 Initial Public Offering and wish to speak privately with a securities attorney, please complete the form on the right or contact John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected] or send an e-mail to [email protected].
Dec 21, 2017 | Consumer Protection, Employment & Technology Archive
Granite Telecommunications – Overtime Pay Collective Action Filed
On December 18, 2017, an overtime pay collective action was filed in United States District Court, Southern District of Florida, West Palm Beach Division, against Granite Telecommunications, LLC for violations of the Fair Labor Standards Act (“FLSA”).
Granite Telecommunications Inside Sales Representatives Allegedly Not Paid for Overtime Hours Worked or Not Paid a Premium for All Overtime Hours Worked
The overtime pay collective action lawsuit was brought on behalf of current and former employees of Granite Telecommunications employed “. . . as Inside Sales Representatives working under the titles of Account Manager, Regional Account Manager, Sr. Account Manager, Industry Account Manager, National Account Manager, Sales Executive, or any other title used to describe the position of an inside sales representative selling to businesses.” [Emphasis added]
According to the overtime pay lawsuit complaint, Plaintiffs and others similarly situated began employment as an Inside Sales Representative under the title of Regional Account Manager. When promoted, Inside Sales Representatives were given, in order, the following titles: Sr. Account Manager, Industry Account Manager, National Account Manager, and Enterprise Account Manager. The complaint alleged that
[a]ll such titles were used to describe the exact same sales position, but each new title just brought the sales rep higher commission and base pay. Some reps as well may have been labeled as “Regional Sales Executive”, or titles or variations of these titles all used to describe an inside sales representative position, whose primary function was to sell[] the Defendant’s telecommunications and data services on a non-retail basis to businesses, professionals[,] and commercial enterprises. The Plaintiffs and the classes of similarly situated inside sales representatives were not compensated for overtime hours worked or paid a premium for all their overtime hours worked, and even when paid, were willfully and intentionally underpaid for all such hours. [Emphasis added].
Granite Telecommunications Inside Sales Reps Misclassified & Improperly Paid
According to the Granite Telecommunications overtime pay collective action complaint:
Although the inside sales representatives working for [Granite Telecommunications] were informed they were “salaried”, it is unknown how [Granite Telecommunications] on paper or internally classified them. The reality is that prior to February 2017, [Granite Telecommunications] treated all inside sales representatives in all of its offices as exempt employees, not tracking their work hours and not paying them a premium for overtime hours they knew its employees were working. Thus, this case may be properly asserted as a case of [m]isclassification prior to February 2017, and after February 2017, a case of just willful underpayment and failure to pay. [Emphasis added]
[Granite Telecommunications] has improperly and willfully withheld and refused to pay Plaintiffs and all insides sales representatives overtime wages (a premium compensation) for all overtime hours worked over 40 in a work week at the correct lawful rates. [Emphasis added]
[Granite Telecommunications] knew or should have known that these inside sales representatives fail the short test for the executive exemption since they do not supervise two or more full time employees, and their primary job duties are non-exempt sales duties and not management. Inside sales representatives are on the production side of the business.
[Granite Telecommunications] knew or should have known that all of its inside sales representatives do not meet the administrative exemption, as their primary job duty does not . . . involve the use of discretion and independent judgment in matters of significance affecting the company and its management; and that their primary job duty is production and sales, typically non-exempt under the FLSA.
[Granite Telecommunications] knew or should have known that the inside sales representatives are clearly not outside sales representatives, and do not meet the . . . exemption as well, clearly not selling retail or retail services and are selling to businesses.
[Granite Telecommunications] absolutely and unquestionably knew that their inside sales representatives were routinely working overtime hours, as managers and supervisor witnessed the extra hours, encouraged and even pressured sales reps to work as many hours as possible to hit quotas and meet goals.
Management never asked employees to leave after the shift ended, stopped them from working earlier, or warned or discipline[d] employees working when they knew or should have known the . . . employees reached 40 hours in the work week.
[Granite Telecommunications] encouraged and [pressured] all inside sales representatives to work overtime hours in order to meet goals and quotas and to maximize sales.
[Granite Telecommunications] also warned Plaintiffs and all other inside sales representatives against leaving at the end of the pre-set scheduled shift time as detrimental to their positions and future employment.
[Granite Telecommunications] has willfully failed to pay Plaintiffs and all similarly situated employees in accordance with the Fair Labor Standards Act (FLSA). Specifically, Plaintiffs and similarly situated employees were not paid time and a half of their regular rate pay for all hours worked in excess of forty (40) hours per week, including the commissions in the calculation of the regular rate and overtime rates. Plaintiffs and the class of similarly situated employees did not in the past, and currently do not perform work that meets the definition of any exemption under the FLSA, and the Defendant’s pay practice and scheme to violate the FLSA are . . . clearly unlawful . . .. [Emphasis added]
Granite Telecommunications Inside Sales Representatives
The Granite Telecommunications overtime pay lawsuit was brought on behalf of individuals who have been employed by Granite Telecommunications, LLC from February 2017 to the present, or in the past three years through February 2017, anywhere in the United States, as an Inside Sales Representative with the title of Regional Account Manager, Senior Account Manager, Industry Account Manager, National Account Manager, Enterprise Account Manager, Regional or National Sales Executive, National Sales Executive, Consultant, Territory Manager, or any other job title used to describe persons whose primary job duty was inside sales to businesses.
Dec 19, 2017 | Shareholder & Investor Protection
Behavioral Recognition Systems & Former CEO Charged with Fraudulently Raising Approximately $28 million from Investors & Diverting More than $7.8 million for Former CEO’s Benefit
On December 14, 2017, the SEC issued a Litigation Release which stated:
The Securities and Exchange Commission . . . charged [Behavioral Recognition Systems] and its former CEO with fraudulently raising approximately $28 million from investors and then diverting more than $7.8 million of those proceeds for the former CEO’s personal benefit.
According to the SEC’s Litigation Release, the SEC’s complaint, filed in United States District Court, Southern District of Texas, Houston Division, stated that
. . . Behavioral Recognition Systems, Inc. . . . and CEO Ray C. Davis, solicited over $28 million from hundreds of investors through repeated lies, such as that investor funds would only be used for working capital and [Behavioral Recognition Systems] only paid Davis a nominal salary. In reality, as the complaint alleges, [Behavioral Recognition Systems] and Davis secretly diverted millions of dollars of investor money for Davis’s personal use, including to purchase ancient jewelry, gold, and other artifacts and to fund Davis’s and his wife’s joint bank account. [Behavioral Recognition Systems] and Davis allegedly covered their tracks using fake invoices in the names of two shell companies Davis controlled, the Blackstone Group, Inc. and Afcon Communications, Inc., purportedly for services they provided to [Behavioral Recognition Systems]. Davis also allegedly invented a fake company and used fictitious invoices in that company’s name to cause [Behavioral Recognition Systems] to send payments to an antiques broker for Davis’s personal purchases. The invoices listed a purported address for the company in Australia; however[,] the address was for an Australian cemetery where an individual is buried with the name of the fake company. [Emphasis added].
SEC Charges Against Behavioral Recognition Systems & Ray C. Davis – Blackstone Group, Inc., Afcon Communications, Inc. and Former CEO’s Wife, Debra Davis, Named As Relief Defendants
The SEC’s Litigation Release stated that [i]n a parallel action, the U.S. Attorney’s Office for the Southern District of Texas today unsealed criminal charges against Davis. [Emphasis added].
The SEC’s Litigation Release also stated that
[t]he SEC’s complaint charges [Behavioral Recognition Systems] and Davis with violating Sections 17(a)(1) and (3) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934, [Behavioral Recognition Systems] with violating Section 17(a)(2) of the Securities Act and Rule 10b-5 under the Exchange Act, and Davis with violating Rules 10b-5(a) and (c) under the Exchange Act and aiding and abetting [Behavioral Recognition Systems’] violations of Section 17(a)(2) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. The SEC seeks permanent injunctions and disgorgement of allegedly ill-gotten monetary gains plus interest from [Behavioral Recognition Systems] and Davis, and a civil penalty from Davis. The SEC also names the Blackstone Group, Afcon and Davis’ wife, Debra Davis, as relief defendants for the purpose of recovering investor proceeds.
According to the SEC’s complaint summary:
Ray C. Davis and Behavioral Recognition Systems, Inc. (now known as Giant Gray, Inc.) (“BRS”) engaged in a fraudulent scheme that began as early as March 2010. As part of the scheme, the Defendants solicited over $28 million from investors in seven equity security offerings between January 2013 and July 2015 (the “Relevant Period”). To raise the funds, BRS made material misrepresentations and misleading statements to investors regarding BRS’s (1) intended use of investor proceeds; (2) executive compensation; (3) related party transactions; and (4) operating expenses.
Davis participated in and substantially assisted BRS’s material misstatements to investors. He was the highest-ranking executive at BRS and the executive in charge of fund raising. Davis was also responsible for the company’s offering documents, which contained multiple false and misleading statements. He participated in drafting them, approved them, authorized their distribution to prospective investors, and personally used them to raise funds for BRS from prospective investors.
Although BRS claimed in the offering documents that investor funds would be used for “growth,” “mezzanine funding,” “working capital,” and “general corporate purposes” to build BRS’s business, as Defendants raised the $28 million from investors, Davis siphoned approximately $7.8 million for his own use and benefit, engaging in a fraudulent scheme that began in at least March 2010, and continued throughout the Relevant Period.
From at least March 2010, Davis used shell corporations that he controlled to divert approximately $11 million ($7.8 million during the Relevant Period) of the BRS investors’ funds for his personal benefit. To make the payments to the shell companies appear legitimate, Davis submitted, or caused to be submitted, to BRS dozens of invoices falsely claiming that these shell companies provided services to BRS.
Contrary to the statements in the offering documents, Davis used the diverted investor funds for his own purposes, including: (a) $5.2 million in transfers to Davis’s and his wife’s joint bank account; (b) purchases from an art gallery in Boca Raton, Florida; and (c) payments to a well- known auction house.
Davis also caused BRS to send an additional $679,000 to an antiques broker to pay for Davis’s personal purchases of ancient jewelry, gold, and other artifacts, including gold pendants, gold crosses, pearl bracelets, garnet pendants, and gold rings. To make these payments appear legitimate, Davis created a fake entity called “LS Farrow” and on at least three occasions submitted, or caused to be submitted, invoices to BRS that falsely claimed “LS Farrow” operated from Victoria, Australia and provided “financial services” to the company. But, in reality, no such entity exists and no such services were ever provided. In fact, the Victoria, Australia address Davis used on the invoices was really the address for a cemetery in Australia where a person named LS Farrow is interred.
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, false claims, deception or data breaches. Together, the partners of Kehoe Law Firm, P.C. have spent more than 30 years prosecuting precedent-setting securities and financial fraud cases in federal and state courts on behalf of institutional and individual clients.
Dec 19, 2017 | Blog
FTC’s Do Not Call Registration & Complaint Data – Robocalls & Unwanted Telemarketing Calls – Complaints Have Increased
The Do Not Call Registry contained 229,816,164 actively registered phone numbers, up from 226,001,288 at the end of FY 2016.
The number of consumer complaints about unwanted telemarketing calls increased from 5,340,234 during FY 2016 to 7,157,370 during FY 2017.
During the past fiscal year, the FTC has continued to receive many consumer complaints about telemarketing robocalls.
In FY 2017, the FTC received 4,501,967 complaints about robocalls, compared with 3,401,614 FY 2016.
For every month in the fiscal year, robocalls made up the majority of consumer complaints about Do Not Call violations.
FY 2017 Robocall Complaints by Topic
“Reducing Debt” was the topic of the call consumers most frequently identified when reporting a robocall complaint, with 771,158 complaints received in FY 2017.
Other types of robocalls consumers reported, according to the FY 2017 “National Do Not Call Registry Data Book,” concerned:
Vacation & Timeshares, 235,678 complaints
Warranties & Protection Plans, 223,119 complaints
Imposters, 179,925 complaints
Medical & Prescriptions, 116,234 complaints
Energy, Solar & Utilities, 85,142 complaints
Home Security & Alarms, 80,543 complaints
Lotteries, Prizes & Sweepstakes, 67,678 complaints
Computer & Technical Support, 51,616 complaints
Home Improvement & Cleaning, 24,796 complaints
Work From Home, 39,159 complaints
In reporting the total number of Do Not Call complaints, the FTC’s Do Not Call Registry Data Book breaks the number down to show how many complaints were about robocalls versus live callers.
-The Do Not Call Registry Data Book includes information about the topics of calls reported to the FTC that is gathered from the FTC’s online complaint form.
-The Do Not Call Registry Data Book includes a state-by-state analysis of Do Not Call complaints and uses a new, more accurate way of reporting consumers’ data. If consumers reported their state in their complaint, the Do Not Call Data Book includes their complaint in that state’s complaint data. If consumers did not report their state, the Do Not Call Registry Data Book uses their area code to determine their state. The state-by-state analysis also includes the top 10 topics of consumer complaints.
-The underlying data in the report is available at: FTC Do Not Call Databook FY2017.
Have You Received Unsolicited or Unwanted Telemarketing Calls, Autodialed Calls, Robocalls or Text Messages?
If you have received unwanted, unsolicited or harassing telemarketing calls, autodial calls, robocalls or text messages and would like to speak privately with an attorney to learn more about your potential legal rights, please complete the form to the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected]; John Kehoe, Esq., (215) 792-6676, Ext. 801, [email protected]; or send an e-mail to [email protected].
Kehoe Law Firm, P.C. is a multidisciplinary, plaintiff–side law firm dedicated to protecting investors and consumers from corporate fraud, negligence, and other wrongdoing. Driven by a strong and principled sense of social responsibility and obtaining justice for the aggrieved, Kehoe Law Firm, P.C. represents plaintiffs seeking to recover investment losses resulting from securities fraud, breaches of fiduciary duty, corporate wrongdoing or malfeasance, those harmed by anticompetitive practices, and consumers victimized by fraud, negligence, false claims, deception, data breaches or whose rights to minimum wage and overtime compensation under the federal Fair Labor Standards Act and state wage and hour laws have been violated.
