“Broadcasting Lies”: Broadcaster Liability in Consumer Fraud, Part 2
Recent cases suggest that broadcasters who advertise a debtor’s fraudulent business may face exposure to § 548 claims, as was addressed in Part 1 of this article. In Part 2, we address the second element of a broadcaster’s defense: the exchange of reasonably equivalent value in exchange for payments received by the broadcaster. The Fifth Circuit’s recent decision in Janvey v. The Golf Channel Inc., a UFTA case, suggests that in the Ponzi-scheme context, even if broadcasters receive funds in good faith, they may never be able to demonstrate the exchange of reasonably equivalent value.
In Janvey, Golf Channel demonstrated that in exchange for $5.9 million, it provided advertising and sponsorship services at market rates to the Stanford Ponzi web of entities. Golf Channel provided the services in good faith pursuant to a written contract and was paid for advertising the Stanford Financial investment fund. At the time it aired the commercials, Golf Channel had no idea Stanford Financial was a Ponzi scheme. The district court rejected the Stanford receiver’s arguments that the advertising services provided no value to the Stanford creditors, since they only grew the Ponzi scheme. Instead, the district court focused on the market value of Golf Channel’s services at the time they were provided.
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The Impact of Intermediary Bank Discovery on Fraud Investigation and Asset Recovery
“Let there be an end, a privacy, an obscure nook for me. I want to be forgotten even by God.” This Browning verse would serve as an apt credo for many fraudsters looking to exit the game. The problem is that today, the exit always seems to include an “obscure nook” — and a few million dollars of other people’s money. Notwithstanding changes in global legal regimes aimed at increasing transparency, there are still “nooks” around the world where information is scarce and transparency lacking.
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member price* $95
non-member price $115
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Now Available from the ABI Bookstore—Fraud & Forensics: Piercing Through the Deception in a Commercial Fraud Case
Fraud & Forensics: Piercing Through the Deception in a Commercial Fraud Case highlights the areas of specialty, challenge, and reward for forensic accountants and the professionals who work with them in commercial fraud cases, and provides a broad and deep look at challenges faced in the course of a commercial fraud matter, as well as the tools available to help identify, unwind, and prove fraudulent transactions.
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