Texas Regulators Halt Sale of New Cryptocurrency

January 5, 2018
By David Lee

AUSTIN (CN) – Texas state securities regulators halted the sale of a new cryptocurrency by United Kingdom-based BitConnect Thursday, claiming the firm is misleading investors and promising annualized returns of at least 100 percent.

The Texas State Securities Board issued an emergency cease-and-desist order to Ashford, England-based BitConnect regarding the sale of its new BitConnect Coins, or BCC.

The board says BitConnect has put 9.4 million BCCs into its online marketplace, representing a value of $4.1 billion.

“The company requires individuals to use Bitcoin, a more established cryptocurrency, to invest in various BitConnect programs,” the board said in a written statement. “In one investment called the BitConnect Lending Program, investors purchase BitConnect Coins, which are provided to a ‘BitConnect Trading Bot’ to generate returns as high as 40 percent a month.”

Mainstream interest in cryptocurrencies grew substantially in 2017 as the value of Bitcoin, the best known cryptocurrency, spiked in value by several thousand percent in recent years. It remains a speculative and highly volatile investment due to sudden, sharp price swings.

The board says BitConnect is not registered to sell securities in Texas and that the BitConnect investments are securities that are not registered, either.

“BitConnect has disclosed virtually nothing about its principals, financial condition, or strategies for earning profits for investors. It has not provided a physical address in England,” the board said. “Despite providing no information on how it will make money for investors – including the algorithms behind the Trading Bot  – BitConnect is touting its investments as a ‘safe way to earn a high rate of return.’”

BitConnect did not immediately respond to an email message requesting comment Friday afternoon.

The board’s action comes four days before BitConnect is scheduled to hold an initial coin offering, or ICO, in the United States to raise money. It claims the company uses unregistered sales agents to target residents through website, social media and Craigslist.

From Courthouse News.

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Southwest Airlines to Pay $15 Million to Settle Collusion Claims

January 4, 2018
By David Lee

DALLAS (CN) – Southwest Airlines will pay $15 million to settle class action lawsuits claiming it conspired with Delta, United and American Airlines to keep ticket prices high by limiting capacity.

The Dallas-based airline says the settlement is not an admission of wrongdoing and it continues to deny it entered into “any unlawful agreements” with other airlines.

“We’re entering into this settlement to avoid considerable distraction and expense of protracted class-action litigation,” Southwest said in a statement Thursday. “For decades, we have consistently set our capacity planning with a goal of offering our lowest fares to the hundreds of millions of customers of America’s largest and original low fare airline.”

American and United said Thursday they would continue to defend against the lawsuits, which were filed against the airlines in 2015.

The Department of Justice has requested documents from the airlines to investigate possible collusion, but has yet to take any further action.

In an antitrust lawsuit filed in Milwaukee Federal Court in July 2015, the plaintiffs claim the defendants control over 80 percent of seats in the domestic travel market.

“During that period, they have eliminated unprofitable flights, filled a higher percentage of seats on planes and made a very public effort to slow growth in order to command higher airfares,” the complaint stated.

The plaintiffs claim the term “discipline” – an alleged euphemism for limiting flights and seats, higher prices and bigger profit margin – was repeatedly used by airline executives at the annual International Air Transport Association conference that year.

They further claim Delta’s removal of schedule and fare information from third-party websites “is a part of a broader push by defendants to restrict how – and whether – sites can use their fare and schedule data” to limit consumers’ ability to do price comparisons.

Southwest says the settlement is not an admission of wrongdoing and it continues to deny it entered into “any unlawful agreements” with other airlines.

“We’re entering into this settlement to avoid considerable distraction and expense of protracted class-action litigation,” Southwest said in a statement Thursday. “For decades, we have consistently set our capacity planning with a goal of offering our lowest fares to the hundreds of millions of Customers of America’s largest and original low fare airline.”

From Courthouse News.

Cop Cleared in Fiery Death of Oklahoma Man

December 15, 2017
By David Lee

PURCELL, Okla. (CN) – An Oklahoma prosecutor cleared a cop Thursday of wrongdoing in the Taser shooting of an apparently suicidal man doused in gasoline who caught fire and died.

McClain County District Attorney Greg Mashburn said Lindsay, Okla., Officer Brian Guthrie’s actions were “appropriate under the law” when he shot Dana Carrothers, 52, of Norman. Mashburn also said Guthrie would not be prosecuted, in a letter issued Thursday.

Mashburn said it was unclear if the fire was started by the Taser or by a lighter Carrothers was holding at the time.

According to the DA, law enforcement began searching for Carrothers on Nov. 7 when a friend reported finding a suicide note after confronting him about allegedly sexually assaulting her relative.

Guthrie and Officer Kyle Phillips located Carrothers in his truck later that night. He refused to leave the vehicle and appeared to be pouring liquid out of a red can, according to Mashburn.

“Finally, Carrothers exited the truck with a lighter in his hand. He did not smell of gasoline. He was ordered to the ground numerous times but did not respond,” Mashburn wrote in the letter, as reported by The Oklahoman newspaper. “He then turned to the truck as if to get in. Officer Guthrie, fearing that Carrothers would return to the truck where he may have access to a weapon and harm an officer, deployed his Taser.”

Mashburn said Guthrie grabbed Carrothers to put out the fire before he “broke contact” and suffered first and second-degree burns to his arms and face.

“As officer Guthrie was trying to get his burning clothes off, Carrothers got back in his truck,” the letter stated. “There was a loud explosion and Carrothers was sitting in the front driver’s seat. He made no effort to get out and stayed in the truck until he died.”

Mashburn said that, according to Norman police, Carrothers had tried to kill himself two other times.

From Courthouse News.

Oklahoma State Senator Pleads Guilty to Child Sex Crime

December 1, 2017
By David Lee

OKLAHOMA CITY (CN) – A disgraced former Oklahoma state senator pleaded guilty Thursday to a federal child sex trafficking charge, admitting that he solicited a teenage boy to have sex at a hotel.

Ralph Shortey, 35, R-Oklahoma City, ignored reporters as he entered the federal courthouse in Oklahoma City. He was charged in September with two counts of transportation of child pornography, production of child pornography and child sex trafficking.

Prosecutors agreed to drop the first three charges in exchange for his plea. He faces 10 years to life in federal prison and will be sentenced in 2018.

Shortey will not be further prosecuted for “his transportation, possession or production of child pornography or child sex trafficking during the period from October 2013 through March 9, 2017,” in exchange for his guilty plea, the 10-page plea agreement states.

Shortey, an early supporter of President Donald Trump, is a married father of four.

Prosecutors said the unidentified teenage boy told Shortey on the Kik messaging app on March 8 that he needed money for spring break.

“I don’t really have any legitimate things I need help with right now,” Shortey replied. “Would you be interested in ‘sexual’ stuff?”

The indictment stated Shortey later drove the boy to a Super 8 Motel in Moore and rented a room with his credit card. Police say the boy’s father told them his son “has a history of soliciting himself” for sex on Craigslist and that they found the two in a room with a strong odor of marijuana, a bottle of lotion and an open box of condoms.

The Oklahoma Senate unanimously passed a resolution stripping Shortey of his powers and kicked him out of his Capitol office in March, shortly after he was found with the teenage boy. He resigned days later.

Cleveland County District Attorney Greg Mashburn filed state charges against Shortey, but dismissed them after federal prosecutors filed their case.

From Courthouse News.

Texas Congressman Won’t Run Again After Nude Photo Leak

November 30, 2017
By David Lee

DALLAS (CN) – U.S.  Rep. Joe Barton of Texas said Thursday he will not seek re-election next year, one day after a constituent accused him of sending her inappropriate private messages on Facebook and a week after his nude sexting photo was posted online.

The Republican had insisted he would seek an 18th term in Congress next year after apologizing for the nude image. He appears to have changed his mind after Kelly Canon came forward Wednesday with screenshots of sexual messages she received about four years ago during a Facebook conversation.

“So … that means u r wearing a tank top only… and not panties? right now?” Barton allegedly asked.

“Ok thats enough,” Canon replied. “You know my attire! Good night…..”

A message a few days later from Barton allegedly read, “wanna tell me what u r wearing or not wearing tonight miss sweet dreams.” Canon says she replied, “still in my ‘regular’ clothes!”

Barton has represented the 6th District of Texas since 1985. The district includes the suburbs of Ennis, Mansfield and Arlington near Dallas and Fort Worth. Barton’s current term expires in January 2019. He thanked his constituents for their “support and friendship,” but did not mention the allegations against him.

“I am very proud of my public record and the many accomplishments of my office,” Barton said in a statement. “It has been a tremendous honor to represent the 6th District of Texas for over three decades, but now it is time to step aside and let there be a new voice.”

Barton said his slogan as a young congressman was “listening to you in Texas, working for you in Washington,” and that it was a way of life for him.

Barton is among several lawmakers who are facing allegations of inappropriate behavior towards women, including U.S. Sen. Al Franken, D-Minn., U.S. Rep. John Conyers, R-Mich., and U.S. Senate candidate Roy Moore, R-Ala.

The claims come amidst a deluge of allegations of sexual misconduct against men in positions of power that has claimed the jobs of movie producer Harvey Weinstein, journalists Charlie Rose and Matt Laurer and music executive Russell Simmons, among others.

Barton told The Dallas Morning News he believes he could still win re-election, but that it would be a “nasty campaign” that would be “difficult” for his family.

He said he made up his mind to not seek re-election on Wednesday and not because of the growing calls from fellow Republicans for him to step aside.

“I’m at peace with it,” he said. “I’m not happy about what’s gone on. But I did do the things and I’ve always been truthful … You have to be accountable for your actions, and I’m trying to do that.”

Barton repeated earlier claims that he is the victim of “revenge porn” and said an investigation is underway.

Canon said Thursday she is “glad he came to his senses” in not seeking re-election.
“I’m a little disheartened that it took me coming forward to make him realize it’s more than just a picture,” she told the Fort Worth Star-Telegram. “It’s a pattern.”

Canon said she never completely shut down the conversations she had with Barton because she is politically active and wanted an open line of communication with him.

“He is my congressman,” she told NBC-affiliate KXAS on Wednesday. “This is an effort not only to get him to not run again, but to get other people – but to get other women – to come forward, too.”

From Courthouse News.

Johnson & Johnson Ordered to Pay $247M for Defective Hip Implants

November 16, 2017
By David Lee

DALLAS (CN) – A Texas federal jury slapped DePuy Orthopaedics and corporate parent Johnson & Johnson with a $247 million verdict Thursday over its Pinnacle artificial hips that injured six, handing the companies their third consecutive costly loss on the implants.

The jury unanimously concluded after a two-month trial that the metal-on-metal hip implants had design and manufacturing defects and that the companies knew about the flaws but failed to warn patients. The six injured New York plaintiffs sued for products liability, deceptive business practices and fraud in 2015.

The jury awarded Ramon Alicea, Uriel Barzel, Karen Kirschner, Hazel Miura, Eugene Stevens Jr. and Michael Stevens approximately $79 million in actual damages and $168 million in punitive damages.

The plaintiffs alleged they were forced to have their implants removed after suffering from bone erosion, tissue death and poisoning from metal debris, among other things. Their case is among the 8,000 that were assigned to U.S. District Judge Ed Kinkeade in Dallas under multidistrict litigation.

DePuy stopped selling Pinnacle implants in 2013, three years after it recalled similar metal-on-metal ASR hip implants after reports of high failure rates.

Thursday’s verdict comes on the heels of two other bellwether losses for Johnson & Johnson and DePuy. The companies were slapped with a $1 billion Pinnacle verdict in December 2016.

The Dallas federal jury in that case also concluded the implants were defective and that the companies failed to warn of the risks, awarding $32 million in actual damages and over $1 billion in punitive damages to six California plaintiffs. Judge Kinkeade reduced the jury award to $500 million one month later, citing due process concerns with a massive punitive damages award that went beyond a “single-digit multiplier” of actual damages.

In March 2016, a separate Dallas federal jury awarded five Texas plaintiffs $498 million.

In the first Pinnacle case to go to trial in October 2014, a Dallas federal jury cleared the companies of products liability, negligence and Montana Consumer Protection Act allegations and awarded a female plaintiff nothing.

Houston attorney W. Mark Lanier represents the plaintiffs in all three victories against Johnson & Johnson and DePuy.

“We thank this jury for sending a very strong message about the responsibility the defendants have to take care of their consumers,” Lanier said in a statement after Thursday’s verdict.

DePuy spokesperson Stella Meirelles said in a statement after the verdict the company will “immediately begin the appeal process and remain committed to the long-term defense” against the lawsuits. She said the implants were supported by a strong record of clinical data showing their effectiveness.

Defense attorney John H. Beisner, with Skadden Arps in Washington, D.C., said in a statement after the verdict that the trial “was a disservice to everyone involved because the verdict will do nothing to advance the ultimate resolution of this six-year-old litigation.”

From Courthouse News.

Fired Dallas Prosecutor Apologizes for Rant on Uber Driver

November 14, 2017
By David Lee

DALLAS (CN) – A tearful former Dallas County prosecutor apologized Tuesday for an embarrassing audio recording of her insulting, swearing at and flaunting her powers at an Uber driver that resulted in her firing, but denied insulting his job or striking him.

Dallas County District Attorney Faith Johnson fired Jody Warner, 32, on Monday, after Uber driver Shaun Platt, 26, came forward with the recording from Nov. 10. He accuses Warner of berating him with expletives, slapping him on the shoulder and accusing him of kidnapping her after he ended the ride, called police and asked her repeatedly to exit his car.

“I want to apologize for my language, to the district attorney’s office, for embarrassing the office that I love very much and respect very much,” Warner told reporters at a press conference outside of the Frank Crowley Courts Building. “I embarrassed my family, I embarrassed myself. That is not who I am.”

Johnson said Warner’s behavior “is contrary to this office’s core principle of integrity, and it will not be tolerated.” Warner worked in the office for six years and prosecuted cases in the crimes against children unit.

Warner told reporters she did not publicly respond earlier due to the district attorney office’s media policy. She said she did not wish to make any accusations against “that driver,” saying she did not know what was in his heart.

“I can tell you not everything he said was true,” Warner said. “I never touched him, whether it is because of my experience as a prosecutor made me hyper vigilant or if I was justifiably uncomfortable, I can’t tell you that. I can just tell you what was in my heart.”

In Platt’s audio recording, a woman is heard calling him “a legitimate retard” and repeatedly telling him she is an assistant district attorney. She is heard accusing Platt of committing a “third-to-first degree felony” by asking her to get out of his car and not taking her to her destination.

Platt said Warner appeared drunk when he picked her up and that the problems began when she told him to drive in a different direction than his GPS program instructed him. He said she refused to respond to follow-up questions on where to drive, became “increasingly angry” and hurled insults.

The woman is heard warning Platt he was “going to regret this so much,” calling him a “[expletive] idiot in a stupid [expletive] hat” and telling him to “shut the [expletive] up.”

Warner acknowledged she had been drinking, which is why she took the Uber ride. She says she “finally snapped” when Platt was close to her home and turned down a different street than what his GPS program instructed.

“I never belittled him for being an Uber driver,” Warner said while wiping away tears. “I’m not someone who thinks I am above anyone. I went to law school to be a prosecutor, I love this job.

“I’m very sorry for the language that I used. I’m very sorry to the community of Dallas County, I have tried very hard to serve you in a way that would make everyone proud.”

Warner was flanked by attorneys Peter Schulte, George Milner and Elizabeth Frizell, a former state district judge who resigned this year to run for Johnson’s office. In supporting Warner, the trio questioned whether Johnson acted too hastily in firing her.

“If people are going to be fired from working for the state of Texas in this office, you have got to let us know what the ground rules are,” Schulte said.

Frizell backed up Warner’s claim that her concern was heightened, saying she is supporting her because she is an “excellent prosecutor.”

From Courthouse News.