Hong Kong Co Convicted of Providing False or Misleading Information
The Hong Kong Securities and Futures Commission (SFC) has announced that Asian Capital Resources (Holdings) Limited (ACR) and its former company secretary Mr Andrew James Chandler have been “convicted of providing false or misleading information to the Stock Exchange of Hong Kong Limited”. The false or misleading information consisted of five announcements made by ACR between October 2008 and October 2009, “stating that Mr Qiu Yue, an executive director of ACR, held no interest in any shares of ACR or incorrectly stating the level of Qiu’s interests”. The penalties in the Eastern Magistracy included a US$100,000 fine for the company and US$10,000 fine for Mr Chandler. Additionally, Mr Qiu and Lucky Peace Limited, a company beneficially owned by Mr Qiu, “failed to disclose their interests in ACR in their capacities as substantial shareholders and as a director of the company as required by the Securities & Futures Ordinance” and were fined US$6,000 and US$4,000 respectively.
SFC’s media release (16 April 2012)
Misleading Advertisers Settle Trade Commission Charges
The US Federal Trade Commission (FTC) has announced that it has obtained a settlement order (undated) against Green Millionaire, Syndero Inc, Scott Waltz and Nigel Williams for misleading consumers. The company led “an online operation that allegedly lured consumers with a supposedly ‘free’ book falsely promising that it would show them how to power their cars and homes at no cost, and then billed them for an online magazine they never ordered”. According to the order, Green Millionaire must ensure that they disclose “the most critical terms of the negative-option program: all costs associated with it, that consumers are agreeing to pay the costs, the length of any trial period, and that consumers must cancel to avoid the charges”.
Green Millionaire is required to ensure that it has the affirmative approval of consumers before processing any billing information. Amongst other things, the defendants failed to disclose the costs associated with the e-magazine subscription program and “allegedly debited or charged consumers’ bank or credit card accounts without their consent, misrepresented the book’s contents, and used unsubstantiated endorsements”. The settlement order bars the defendants from carrying out such conduct and “making any material misrepresentation in the sale of any good or service”. According to the FTC, “[t]he order imposes a judgment of more than US$5.7 million”, which will be suspended when certain conditions are met, and “[t]he full judgment for each defendant will become due immediately if the defendant is found to have misrepresented his financial condition”.
FTC’s media release (16 April 2012)
Pay TV Provider Pays Infringement Notices Over Misleading Ads
The Australian Competition and Consumer Commission (ACCC) has announced that pay television provider Foxtel has paid AU$46,200 in infringement notices over misleading advertising during December 2011. According to the ACCC, “[d]uring November and December 2011, [Foxtel] ran a nationwide advertising campaign for its ‘Christmas Sale’ which included a prominent headline that customers could acquire a [Foxtel] subscription for $55 per month on a six-month contract”, however, it failed to adequately advertise that customers would in fact be signing up to a 12-month contract, the second half of which would cost $77 per month. ACCC chairperson Rod Sims warned companies against thinking that a headline will not be misleading if it is accompanied by an asterisk or fine print disclaimer.
ACCC’s media release (13 April 2012)
Visa Technology Tackles Fraud Before it Occurs
Market Watch reports that Visa Inc. has announced a new fraud-preventive technology entitled Visa Strategy Manager, designed “to help financial institutions create and implement strategies for identifying and stopping fraudulent transactions in real-time at the check-out”. The technology reportedly allows financial institutions to target high-risk transactions “by automating the process for writing their fraud detection rules, and responding to real-time fraud trends”, according to Visa head of global risk and authentication product development Mark Nelsen. Visa Strategy Manager can reportedly be “used independently with an issuer’s own host system” or in conjunction with Visa Risk Manager, “a decisioning tool that enables issuers to test and deploy authorization rules within minutes and respond to fraud trends as they evolve”. Whilst this service is currently only being offered within the US, Canada, Latin America and the Caribbean, it will be offered to Asia Pacific, Central and Eastern Europe, the Middle East and Africa by mid 2012, reports Market Watch.
Market Watch: Visa Strategy Manager Boosts Issuer Fraud Detection (11 April 2012)
(Source: Market Watch)
Court Orders US$1.1 Billion Penalty for Healthcare Company
Reuters reports that a Pulaski County Circuit Court has ordered Johnson & Johnson (J&J) to pay a US$1.1 billion penalty after a jury found the company guilty of fraudulently selling its Risperdal anti-psychotic medicine. Reportedly, Arkansas commenced legal proceedings against J&J, alleging that it had “deceived thousands of doctors in the state by touting [Risperdal] as better and safer than rival therapies and marketing it for unapproved uses in children and the elderly”, and that it had caused Arkansas’ Medicaid program to “greatly overpay” for the drug. J&J spokesperson Teresa Mueller reportedly stated that the company would appeal the order if its motion for a new trial was denied.
Reuters: J&J hit with $1.1 billion Risperdal penalty in Arkansas (11 April 2012)