March 14, 2012
Partner Dana B. Rosenfeld was quoted in the article, "FTC Recovers $17M From Pyramid Schemer in Fraud Suit," which appeared on Law360.com. The article reports that the Federal Trade Commission won a fraud suit against BurnLounge Inc., a digital music store, as well as its CEO and two promoters. A California judge ordered the company to pay $17 million to the FTC for the company's deceptive pyramid scheme after the FTC prevailed in a rare bench trial on its fraud claims.
According to Ms. Rosenfeld, "Once the FTC brings an action of this kind, it's going to take it as far as it has to, including to trial, to obtain an order." Furthermore, she said, "This action shows that the FTC is willing to be very aggressive in matters where it believes there is clear fraud and consumer injury." The court ordered the defendants collectively pay a "virtually unprecedented $17 million" in redress, and the FTC will monitor the company in the future to ensure compliance.