We are excited to announce that Mattermark has re-launched as an independent company! Learn More →
Back to All Articles  |  Editorial

Lawsuit Names Venture Capitalists & Payments Startups in Alleged Violations of California Money Transmission Act & Bank Secrecy Act

A lawsuit has been filed by Think Computer Corporation – the firm lead by Aaron Greenspan, who has a history of suing Facebook in the past – in the Northen District of California San Jose Division Courts naming a long list of well known investors, venture capitalists and popular startups in a request for injunctive relief.

Sources have point out that Greenspan previously sued the State of California Department of Financial Institutions in 2010 for $999,000 of injunctive relieft, claiming that the California Money Transmission Act (MTA) was unconstitutional.

I am still reading through the full suit and will post more information as I process it. The Next Web has written a very comprehensive overview.

The 5th item in the Introduction & Summary section may provide some insight into why investors have been named in addition to the companies themselves:

Given the increasingly public difficulty associated with proper compliance with the MTA, Defendants decided to simply break the law while growing their businesses “under theradar,” knowing that the likelihood of being caught was low, and in many cases fully aware that their activities would violate both state and federal law. Their investors either supported them in this regard, or were willfully negligent of the implications of funding unlicensed money transmitters.

A current list of licensed money transmitters in the state of California can be found here.

Read the suit in full here:

20130506.complaint by robinwauters

© Mattermark 2024. Sources: Mattermark Research, Crunchbase, AngelList.