Payment Processing & Finance Law
The rapidly growing intersection of finance and technology has revolutionized the payment processing industry, resulting in the rise of both innovative services like peer-to peer-lending, crowdsourcing, eBanking and ePayments, and the need for attorneys experienced in this area. Ifrah Law’s attorneys fill that need. Our firm represents businesses and individuals in payment processing relationships, including merchants in disputes with payment processors, ISOs and acquiring banks, MATCH and Terminated Merchant File listings, and payment processing agreements.
On behalf of a wide variety of domestic and international banking and payment processing entities, Ifrah Law has a strong track record for trying and winning cases across venues and for successfully concluding matters with private litigants, the Department of Justice, the Consumer Financial Protection Bureau (CFPB), the Federal Trade Commission (FTC), the Securities Exchange Commission (SEC), and the Commodities Futures Trading Commission (CFTC).
Ifrah attorneys are active in matters on the cutting edge of this expanding field, ranging from advising financial services clients on emerging issues in crowdfunding to representing clients placed on the Department of Treasury’s Office of Foreign Assets Control (OFAC) sanctions list.
Our in-depth knowledge of the payment industry, added to our established litigation track record in financial services, privacy and data protection and marketing and consumer protection, enables us to protect your business and your concerns. Within the organizational structure of a client’s particular business, we work with senior executive management, legal counsel, risk professionals, sales representatives, merchant services team members, and other appropriate core staff to identify and mitigate risk.
We know how to balance aggressive legal tactics with practical concerns in order to represent you most effectively and recommend strategies that put you at the least personal and professional risk. And we stay with you and your case throughout the entire process, representing you from start to finish.
Ifrah Law advises clients on matters relating to payment processing, electronic payments and merchant transactions, including the following representative matters:
- Drafting, negotiating and enforcing agreements between banks, processors, and other financial services and payment processing parties and vendors
- Developing policies and best practices for monitoring and managing risk with merchants
- Compliance with financial and consumer protection regulations, including the Payment Card Industry Data Security Standards (PCI DSS) requirements
- Defense of banks and payment processors in matters relating to merchants, reserve accounts, and third party claims
- Responding to investigations, requests for information, and government subpoenas
- Privacy matters relating to eCommerce and the use of consumer data under regulatory initiatives, like the FTC’s proposed revisions to the Children’s Online Privacy Protection Act rules, the Privacy Bill of Rights, and self-regulatory projects like the Digital Advertising Alliance’s and the World Wide Web Consortium’s “Do Not Track” standards
- FinCEN Registration and state licensing of money services businesses
- Virtual currency business, such as Bitcoin
- Anti-Money Laundering (AML) policy drafting, including drafting data security policies, employee screening, and encryption
- MATCH/TMF Merchant support
- Merchant reseller agreements
- Merchant processing affecting continuity / rebill model
- Internal audits of merchants for ISOs / payment processors
Ifrah Law Achieves Swift Removal of Payment Processing Client from OFAC List in Highly Unusual Government Action
In September 2016, the U.S. Treasury Department Office of Foreign Assets Control (OFAC) announced it had designated Ifrah Law’s client, a legitimate international business, as a transnational criminal organization. Our client had conducted its business for decades without incident, providing payment processing solutions for direct mail, eCommerce, gaming, charitable, and other customers.
The OFAC designation of a legitimate business was the first of its kind, having been previously limited to terrorist and organized crime entities, such as the Yakuza, MS-13, and Saddam Hussein. The designation indicated that OFAC was expanding its authority under its legal mandate. Given the novelty of this designation, the company contacted Ifrah Law based on our background and extensive experience representing payment processors: understanding their business was critical to our ability to combat the Government’s misperceptions about the payment processing business.
First, we began an internal investigation. As the OFAC designation was a surprise to the company, and the Treasury Department had no obligation to explain the basis for the designation, we needed to determine why our client had been targeted.
We also needed to address the reverberating effects of the designation on our client. An OFAC designation results in the prohibition of U.S.-based businesses including banks from working with a designee. Our client lost the ability to pay employees, vendors, and general expenses and eventually was forced to close its operations.
Ifrah Law achieved some of the swiftest ever removals from OFAC’s SDN list, including all of the 12 individuals named. One year after the initial listing, OFAC finally signed an agreement to remove our client’s companies, officers and employees from the SDN List. We continue to represent this client in actions concerning the financial situation of the now defunct company, and to ameliorate the damage caused by the listing on both individual and corporate reputations. Our work on this case was featured in The American Lawyer.
Clearing SEC Charges Against a Former Securities Broker
When the U.S. government pushed Frederick O’Meally, the former Prudential Securities Inc. broker pushed back – and won.
Ifrah Law acted as co-lead counsel in obtaining a jury verdict, rejecting claims by the U.S. Securities and Exchange Commission that O’Meally defrauded 60 mutual fund companies. The jury also rejected the SEC’s negligence claims with respect to 54 of the funds and found only that O’Meally was negligent in his conduct with respect to six of the funds.
Mr. O’Meally had fought the SEC for eight years, claiming his innocence and sticking up for his rights. The SEC asserted that the mutual fund companies had tried to prevent O’Meally from market timing on behalf of his clients, and that he had continued doing so through deception involving multiple account numbers and numerous financial advisor identifying numbers used in trades. But after a four-week trial, the jury found that the defendant did not commit any intentional fraud against the mutual fund companies. Evidence at trial showed that O’Meally had not misused these tools and that, in fact, all of his trading practices had been approved multiple times by his supervisors, by Prudential Securities lawyers and compliance personnel, and even by outside regulators.
The O’Meally case was one of the very small number of SEC compliance cases that go to trial each year, and one of an even smaller number of cases in which a jury has completely rejected SEC claims of fraud. While Prudential Securities and a number of other brokers targeted by the SEC negotiated settlements, Ifrah Law was part of the team that helped Frederick O’Meally vindicate his claims that he was innocent of the SEC’s fraud accusations.
(Securities & Exchange Commission v. O’Meally, No. 06-Civ-6483 (LTS) (S.D.N.Y.), No. 13-1116 (2d Cir.) )
Obtaining a Reversal of Conviction and Sentence Reduction for Securities Fraud
Ifrah Law represented a former Homestore.com executive, Stuart Wolff, who was indicted for securities fraud. During a six-year battle with the U.S. Attorney’s Office for the Central District of California, the trial and appellate teams worked together to secure a reversal of the client’s conviction and a new trial.
In the months leading up to the second trial, the defense team, which included Jeff Ifrah of Ifrah Law, leveraged irregularities with discovery to obtain dismissal of all charges related to PricewaterhouseCoopers, Homestore’s former accounting firm. As a result, the sentence on remand was reduced by 70 percent relative to the sentence imposed after the first trial.
Jeff Ifrah was the only attorney Mr. Wolff retained from the beginning of the case to its conclusion. Mr. Ifrah began managing the legal team after the first trial, continued through the appellate process, and also in the team’s preparation for trial on remand.
Jeff Ifrah was responsible for formulating and executing the strategy that resulted in the 70 percent reduction of Mr. Wolff’s sentence.
(U.S. v. Wolff, Case No. 2:05-cr-00398 (U.S. District Court, Central District of California))
The Consumer Financial Protection Bureau (CFPB) has proposed a new rule to regulate payday lending and auto-title loan companies. Right now, it is merely a proposal, meant to undergo the notice and comment period until September 14, 2016. But if the rule goes into effect, it would be a significant imposition on the lending business…. Read More
Congress is poised to deliver on tax reform this year. As part of the package, both houses are seeking to encourage the repatriation of trillions of dollars that corporations and wealthy individuals have been stockpiling offshore. For decades, corporations and wealthy individuals have been able to avoid taxes legally by transferring assets to tax-friendly jurisdictions… Read More