Target targeted, by a computer virus and now a class action lawsuit. In case you hadn’t heard—the US’s second largest retailer got hit with a massive data breach just before Christmas—which latest reports indicate could affect as many as 70 million customer’s credit and debit cards.
Filed in California federal court by lead plaintiff Lisa Purcell (“Plaintiff”), the Target lawsuit seeks to represent all those similarly situated to obtain damages, restitution and injunctive relief for the Class. “The information Target lost, including Plaintiff’s identifying information and other financial information, is extremely valuable to thieves. As the Federal Trade Commission (“FTC”) recognizes, once identity thieves have personal information, they can drain your bank account, run up your credit cards, open new utility accounts, or get medical treatment on your health insurance,” the lawsuit states.
According to a statement issued by Target, the so-called track data was stolen in real time as payment cards were swiped in its stores between November 27, the day before Thanksgiving, and December 15.
The Target lawsuit states “Investigators believe the data was obtained via software installed on machines that customers use to swipe magnetic strips on their cards when paying for merchandise at Target stores.” And “The thieves may also have accessed PIN numbers for affected customers’ debit cards, allowing the thieves to withdraw money from those customers’ bank accounts. Thieves could not have accessed this information and installed the software on Target’s point-of-sale machines but for Target’s negligence, and that Target failed to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the data breach.”
Among the allegations is the clam that Target was negligent in its failure to implement and maintain reasonable security procedures and practices appropriate to the nature and scope of the information compromised in the data breach. Further, “Target unreasonably delayed informing anyone about the breach of security of Class Members’ confidential and personal information after Target knew the data breach had occurred,” the lawsuit states.
FYI—investigations into the breach are reportedly underway by the US Secret Service and two states’ attorneys general.
Carfax taking some Flak. An antitrust class action lawsuit has been filed against Carfax, alleging the company impairs competition through its exclusive and illegal alliances with Autotrader.com, and Cars.com, as well as with the majority of the automobile manufacturers’ certified pre-owned programs. The lawsuit further alleges that, as a result, automobile dealers are forced to conduct business with CARFAX at grossly inflated prices only to have CARFAX spend these inflated revenues on ads that disparage dealers as dishonest and untrustworthy.
The lawsuit, entitled Maxon Hyundai Mazda et-al. vs. Carfax, Inc, currently has approximately 500 dealer plaintiffs signed up, a number that is expected to increase as the suit progresses.
More from Madoff… Ok—here’s one for the record books—a settlement for the Class of BLMIS/Madoff customers has been reached affecting (“Class Action Settlement”) all potential claims against JPMorgan Chase Bank, N.A. and its parents, subsidiaries and affiliates (“JPMorgan”). The proposed Class Action Settlement will be contemporaneously presented by motions for approval to both United States District Court Judge McMahon and to Bankruptcy Court Judge Lifland. The filed case number is 11-cv-7866 (VM) (U.S. Dist. Ct., S.D.N.Y.).
The settlement of this Class Action is one part of a multi-part resolution of Madoff-related litigation against JPMorgan involving simultaneous, separately negotiated settlements, which include the Class Action Settlement in the amount of $218 million, the SIPA Trustee’s Avoidance Action settlement in the amount of $325 million, and a resolution with the U.S. Attorney’s Office for the Southern District of New York that includes a civil forfeiture in the amount of $1.7 billion.
The payments by JPMorgan in connection with these agreements will total $2.243 billion and will benefit victims of Madoff’s Ponzi scheme.
Ok Folks, That’s all for this week. Happy New Year! Here’s to a peaceful and prosperous 2014 for all.
We’re Mad about Madoff! Still. Again. No kidding. Only this time someone’s naming a bank. Two former Bernard L. Madoff investors have filed a proposed consumer fraud class-action lawsuit against JP Morgan Chase & Co, claiming the banking giant was complicit in aiding Madoff in orchestrating the Ponzi scheme that robbed investors of more than $65 billion.
The lawsuit comes after a similar suit filed by the trustee appointed to represent Madoff’s victims was dismissed. The court ruled that the case filed by Irving Picard lacked standing, holding those claims belonged exclusively by the victims of Madoff’s fraud.
Among the allegations leveled in the lawsuit, investors charge that JP Morgan operated as Bernard L. Madoff Investment Securities LLC’s (BLMIS) primary banker for more than 20 years, and were faced with many indications that the fund was nothing more than a Ponzi scheme.
The lawsuit details that since 1986, all the money BLMIS collected from unwitting investors passed through JP Morgan in an account known as the 703 Account, where BLMIS co-mingled funds from investors.
The lawsuit contends that JP Morgan should have known that BLMIS’s activities were grossly inconsistent with those of an investment firm through a number of signs of impropriety.
JP Morgan, for example, was required to review a filing submitted by BLMIS to the SEC known as the Financial and Operational Combined Uniform Single Reports or FOCUS. That report, the lawsuit states, contained glaring irregularities that JP Morgan should have reported to the SEC, including factual omissions and errors, such as failing to report any commission revenue.
Beginning in 2006 JP Morgan sold structured investment products related to BLMIS feeder funds to its clients, profiting on those transactions as well. In the course of structuring those products, JP Morgan performed due-diligence on BLMIS and became suspicious that the BLMIS was a fraud but did not report its findings, the lawsuit alleges, but did redeem $145 million from BLMIS and $276 million from BLMIS feeder funds in 2008.
The lawsuit has been filed on behalf of Stephen and Leyla Hill, investors who incurred losses in BLMIS. It claims JP Morgan had knowing participation in a breach of trust, aided and abetted fraud, aided and abetted a breach of fiduciary duty, aided and abetted conversion and received unjust enrichment. The suit seeks damages for the plaintiffs.
Big Banks paying Big Bucks: But are the bucks big enough? A $410 million settlement was approved this week—you may have seen it splashed all over the news—by a federal judge in Miami, ending an overdraft fees class action lawsuit against Bank of America (BoFA) that claimed the bank charged excessive overdraft fees.
Only thing is there are reportedly more than 13 million current and former customers who will be affected by the decision, customers who used debit cards over the past 10 years. Some reports suggest that most of the plaintiffs will likely only receive a fraction of the overdraft fees they paid. Ummm.
The lawsuit alleged that BoFA processed its debit card and check payments in such a way as to incur more customer overdrafts and consequently more fees. BoFA insists that its system was proper, despite the settlement. The settlement includes an estimated $123 million in legal fees for plaintiff’s lawyers…
Another bittersweet asbestos settlement this week. The widow of a man who died from peritoneal mesothelioma cancer has been awarded a settlement—a “substantial” sum—amount not publicly disclosed as compensation for loss of her husband, to put it bluntly. The settlement, negotiated on behalf of Mrs. Veraldo, was obtained midway through trial.
Mrs. Veraldo sued as executrix of the estate of her late husband, Randy Veraldo. He was 52 when he died in 2009, seven months after being diagnosed with peritoneal mesothelioma cancer, court records show.
Mr. Veraldo was a parts handler at a Teterboro, N.J., warehouse from 1978-85. The job required him to unpack clutch plates delivered on a near-daily basis from various suppliers. The clutch plates were said to contain asbestos, a mineral once widely used in the U.S. as a cheap insulating material until it was found to cause mesothelioma cancer.
Ok—That’s enough for this week. See you at the bar. And on this Veterans Day, a toast to all veterans, living and gone, the world over.
Copping out on COBRA? Brunel Energy Inc and Brunel Energy Group Health Plan got hit with a class action this week. It was filed on behalf of current and former participants in the Brunel Energy Group Health Plan (“the Plan”) who allege Brunel failed to provide health care coverage continuing health care coverage (commonly called COBRA coverage) to employees and their beneficiaries who were covered under the Plan through an insurance policy with BUPA International.
According to the complaint Brunel did not notify employees of their entitlement to COBRA coverage or of their right to obtain coverage at a reduced rate as authorized by Congress in its recent economic stimulus package.
According to the Complaint, when asked for a COBRA package by a terminated employee, Brunel advised the former employee that COBRA coverage was not available. Even after being notified by the U.S. Department of Labor that the former employee was entitled to elect COBRA coverage at the statutorily reduced rate, the Complaint alleges that Brunel did not offer the coverage. Would this come under the heading of ‘cost savings’?
The Complaint seeks an injunction requiring Brunel to bring its health care plan into compliance with the law and an order requiring Brunel to reimburse former employees and their beneficiaries for certain health care costs they would not have incurred had they been allowed to elect COBRA coverage. Wait—there’s more—the complaint also seeks civil money penalties of up to $110 dollars a day for Brunel’s failure to provide statutory notices describing the Plan and apprising employees and their beneficiaries of their COBRA rights as required by law.
Don’t Mess with our Vets. JP Morgan Chase was all apologies this week, on the back of a settlement reached with its customers who are or were military personnel, who had filed a class action against the bank alleging that it was wrongly foreclosing on families of service personnel and overcharging them on their mortgages to boot. Does that come under the definition of ‘free market economy’? (don’t get me started on that one)
Well, it obviously did in JP Morgan’s version. But, in February, a J.P. Morgan executive apologized at a U.S. House hearing on its behavior. Then they rolled out a series of programs to help active members and veterans—programs including educational initiatives. And, they said that the bank would no longer foreclose on any currently deployed military personnel. How generous of them.
The financial protections that the suit sought to have reinstated are in fact afforded US military personnel under the Service members Civil Relief Act (SCRA). So, maybe it wasn’t just an attack of conscience on JP Morgan’s part.
In any event, Reuters reported that under the terms of the settlement “J.P. Morgan said it will pay $12 million to the class-action suit and set aside $15 million for additional damages on a case-by-case basis. Any unused funds will be used to benefit a charity selected by the U.S. military.” (Reuters.com)
Baby Brain Food? Guess Not. If you got duped into buying an expensive brand of infant formula—Enfamil, made by Mead Johnson & Co—you may be pleased to know they’ve reached a preliminary settlement in the class action they were facing concerning allegations of false advertising.
The suit claimed that Mead falsely represented that Enfamil LIPIL is the only infant formula that contains DHA and ARA—fatty acids it claims are “clinically proved to improve brain and eye function in infants.” Are you kidding? If that really were the case they’d be putting that stuff in the tap water.
If the settlement is approved, people who purchased Enfamil LIPIL formula for six months or less between October 13, 2005 and March 31, 2010, can file a claim to receive either one 12.5 oz container of Infant Formula or $6 in cash.
For those folks who purchased Enfamil LIPIL formula for more than six months between October 13, 2005 and March 31, 2010, you can file a claim to receive either two 12.5 oz containers of Infant Formula or $12 in cash. You can find out if you’re eligible to be a class member here.
Ok. That’s it for this week. See you at the bar.