Legal Roundup: Snapchat Facing Settlement, Man Kills Son in Life Insurance Fraud Scheme and More
Snapchat Agrees to $187.5 Million Settlement Over Claims It Minimized Instagram Threat
The Case: Investors sued Snap — the parent company of Snapchat — claiming the social media company concealed negative information in the run up to the company’s 2017 initial public offering.
Particularly, they sued over Snap’s alleged downplaying of the threat from Instagram, which launched an eerily similar vertical video offering called Instagram Stories in August 2016.
Business Insider has more: “The class action lawsuit, which has involved several different plaintiffs in its convoluted history, eventually prompted the U.S. Department of Justice and the Securities and Exchange Commission to look into Snap’s pre-IPO disclosures, though the agencies eventually dropped the case late last year.”
Scorecard: Snap signed a preliminary agreement to settle the case for $187.5 million.
The settlement added to the company’s Q4 losses, contributing to a recent 10% drop in stock price, according to TechCrunch.
Takeaway: Information disclosure is crucial, especially after you go public.
After Killing Son for Life Insurance Money, Man Is Convicted of Killing Wife for Same Reason
The Case: Back in 2008, Karl Holger Karlsen was convicted of killing his son Levi to collect a $700,000 life insurance policy.
It led detectives to dig deeper into his wife Christina’s 1991 death caused by fire in their family home. The New York Times explains that: “Days after his wife’s death, Mr. Karlsen collected $215,000 from his wife’s insurance policy” and moved the family from California to his hometown of Seneca Falls, N.Y.”
Scorecard: In February, Karlsen was convicted of murdering his wife and “could face a maximum life sentence without the possibility of parole,” the New York Times reported.
Takeaway: Insurance fraud is rarely carried out on this magnitude, but it’s a reminder that due diligence must be taken when paying claims.
Winery Sues Over Defective Corks
The Case: The vinters at Cayuse Vineyards noticed something strange about their 2015 wines — they appeared to contain white flecks and an oily film.
In a new lawsuit, they claim the irregularities were due to corks that leaked bits of paraffin and oil into the wines — ruining approximately 40,000 bottles.
Wine-Searcher has more: “Its insurer, the famous Lloyds of London, reimbursed Cayuse’s customers for wines they had already paid for but would not receive. Lloyds of London has now filed a lawsuit seeking more than $3.5 million in damages against Napa-based Lafitte Cork & Capsule.”
Scorecard: The case has just recently been filed so it’s unclear how it will play out.
Takeaway: Supply chains and partnerships are crucial to any business. &