Global Equity Finance Lawsuit Complaint Review: Inc. Mortgage broker

Global Equity Finance Lawsuit: Inc. Complaint

Table of Contents

• Global Equity Finance Lawsuit Complaint

• Background on Global Equity Finance: Review

• The Class Action Lawsuit Against Global Equity Finance

• Key Allegations Against Global Equity Finance

• Status of the Lawsuit Against Global Equity Finance

• Potential Implications and Damages Sought

• Key Takeaways

• Frequently Asked Questions

Global Equity Finance Lawsuit Complaint

GE Finance is a California-based (San Diego) litigation financing company that funds commercial lawsuits and arbitral claims. The company has been in business since 2007 and operates across North America, Europe, and Asia.

However, it has recently become the subject of a high-profile class action lawsuit accusing it of deceptive and predatory practices in its lawsuit financing business. The plaintiffs allege that GE Finance misled and defrauded its litigation funding customers through opaque contracts and exorbitant interest rates that violated usury laws.

Below is an in-depth look at the background, allegations, status, and implications of the pending class action lawsuit against Global Equity Finance.

Background on Global Equity Finance: Review

It was founded in 2007 by former hedge fund traders who saw an opportunity in litigation financing. The company funds individuals and companies involved in commercial litigation or arbitration.

GE Finance fronts all the costs of pursuing a legal claim, including attorneys' fees, mortgages, and other expenses. If the claim results in a settlement or award, the company receives an agreed-upon portion of the proceeds. This type of third-party litigation financing provides plaintiffs access to justice that would otherwise be unavailable due to lack of funds.

Since its founding, it has grown substantially and now provides litigation financing services across the United States. The company has expanded internationally, with UK, Germany, Hong Kong, and Singapore offices. GE Finance has funded over 1,000 cases with over $2 billion in capital deployed.

However, it does not publicly disclose much financial information or data regarding case outcomes and returns. This lack of transparency is one of the central issues underlying the current lawsuit.

The Class Action Lawsuit Against Global Equity Finance

In August 2022, two plaintiff firms filed a class action complaint against Global Equity Finance in the U.S. District Court for the Northern District of California. The plaintiffs allege that GE Finance engaged in predatory and opaque practices in its litigation funding business.

Legal Connection, Inc. and Dennis McKasson LLP represent the plaintiffs representing the proposed class. Legal Connection is a plaintiff-side litigation support firm based in California. Dennis McKasson LLP is a law firm that previously obtained litigation funding from Global Equity Finance.

The lawsuit seeks class-action status to represent two classes:

• All GE Finance litigation funding customers in the U.S.

• All law firms and attorneys who represented clients who engaged in GE Finance's funding

By seeking class certification, the plaintiffs aim to sue for all affected past customers rather than just themselves. That substantially raises the stakes and potential damages if the class is certified.

Key Allegations Against Global Equity Finance

The lawsuit alleges that it deploys deceptive marketing and contracting practices to mislead customers and charge predatory interest rates, violating state usury laws and capping interest charges.

The key allegations against GE Finance include:

• Deceptive Marketing - The plaintiffs claim GE Finance misrepresents its expertise and historical case success rates. They argue that the company needs more transparency around how it prices cases.

• Misrepresenting Terms: The lawsuit alleges GE Finance omits vital contract terms, hides costs, and forces arbitration agreements on customers.

• Charging Usurious Interest Rates - The plaintiffs assert that GE Finance charges effective interest rates between 60-180% APR, violating usury laws in CA, NY, and other states capping rates.

• Charging Excessive Fees: The complaint alleges GE Finance tacks on excessive late fees, renewal fees, and collection fees without proper disclosure.

• Prematurely Collecting on Judgments: The plaintiffs claim GE Finance collects immediately when cases settle but delays payments owed if they lose.

By engaging in these practices, the lawsuit alleges that GE Finance violates consumer protection laws, and usury laws, and breaches contracts in bad faith.

Status of the Lawsuit Against Global Equity Finance

The class action lawsuit against Global Equity Finance is in the early procedural stages. After the initial complaint filing in August 2022, GE Finance was served in October 2022.

It has not yet filed a formal response but has issued public statements defending its practices and vowing to contest the lawsuit vigorously. The company claims the allegations are baseless and argues that its financing provides access to justice.

The plaintiffs must move for class certification to establish themselves as representatives of all GE Finance customers. This process may take months as both sides present arguments and evidence to the court.

If a class is certified, the next phase would be discovery, where each side requests relevant documents and data from the other party. With a complex class action, this stage can span years before an ultimate trial date or settlement.

Considering the high stakes, expect the class action against Global Equity Finance to be a lengthy, multi-year legal battle. The case has major implications not just for GE Finance but the litigation financing industry as a whole.

Potential Implications and Damages Sought: Documented

If successful, the class action lawsuit could significantly impact it and its litigation funding business model. The plaintiffs aim to void all existing GE Finance contracts and Agreements.

In terms of financial damages, the plaintiffs seek:

• Repayment of all excessive interest charges to customers

• Recovery of statutory and punitive damages under state laws

• Disgorgement of profits earned from the alleged unlawful practices

Given that GE Finance has funded over 1,000 cases worth billions, potential damages could total hundreds of millions or more. But the company has signaled it aims to vigorously contest the alleged injuries and defend its contractual relationships.

More broadly, the case has major implications for the litigation financing industry. A ruling against GE Finance could force litigation funders to overhaul opaque pricing models and improve transparency in contracts and disclosures. Other companies may face similar class actions if unlawful interest rates and fee stacking practices occur industry-wide.

However, supporters argue that responsible litigation funding broadens access to justice and provides recourse for individuals and smaller firms. So, legislative reform rather than litigation may be needed to standardize and regulate the growing industry.

Key Takeaways on the Global Equity Finance Lawsuit: Summary

• Global Equity Finance is facing a high-profile class action lawsuit alleging predatory practices in its lawsuit lending business.

• Two plaintiffs filed suit in California federal court for potentially thousands of GE Finance customers.

• The plaintiffs claim GE Finance misleads customers, hides costs, and loans, and charges illegal high-interest rates, violating usury laws.

• The case is currently in early procedural stages and could take years to resolve through trial or settlement.

• If successful, the lawsuit could force GE Finance to repay millions in excessive fees and overhaul its business practices.

• The case has major implications for regulating litigation financing and improving transparency.

Frequently Asked Questions about the Global Equity Finance Lawsuit Complaint

Who filed the class action lawsuit against Global Equity Finance?

The class action lawsuit was filed by two plaintiffs - Legal Connection, Inc. and Dennis McKasson LLP. Legal Connection is a California-based litigation support provider. Dennis McKasson is a law firm that previously obtained funding from GE Finance.

What are the main allegations made against GE Finance?

The main allegations are that it deceived customers, hid costs in contracts, charged illegal interest rates, violated usury laws, and imposed excessive fees. The lawsuit claims these practices violate consumer protection and contracting laws.

What kind of customers does GE Finance provide lawsuit funding to?

GE Finance funds individuals, law firms, and companies involved in commercial litigation or arbitration cases. Its customers consist of plaintiffs and defendants in various legal disputes seeking financing for court costs.

What states are covered by the class action lawsuit?

The proposed class action would cover customers in the United States nationwide. But usury law claims are being made specifically under the laws of California, New York, and other states capping interest rates.

How much money could GE Finance owe if the lawsuit succeeds?

Potential damages sought total hundreds of millions of dollars or more, given that GE Finance has funded over 1,000 cases worth billions since 2007. The plaintiffs seek repayment of all excessive interest and fees.

How long will it take for the lawsuit against GE Finance to resolve?

Class action lawsuits of this size often take years to make their way through pre-trial procedures, discovery, motions, and trial or settlement. Expect this case to involve a lengthy legal fight, given the stakes.

Could the lawsuit affect the broader litigation financing industry?

A ruling against GE Finance and an award of significant damages could spur litigation funders to improve transparency and standardize practices. It may also lead to new regulations in the industry.

Is GE Finance the only lawsuit lender facing legal issues?

No, other companies like Oasis Financial, Lake Whillans, and Counsel Financial have also faced lawsuits and criticism over opaque fees and high interest rates in recent years. But the GE Finance case is the most high-profile litigation.

Will this lawsuit make it more difficult for plaintiffs to secure funding?

It could be in the short term until the industry adapts. But structured properly, litigation funding plays an important role in providing access to justice for those who cannot afford legal costs.