Earlier this month, Zachary Horwitz was arrested and charged with wire fraud in connection with running an alleged $690 million Ponzi scheme that included fake license rights agreements with Netflix and HBO. Now, investors have filed suit — and are eyeing City National Bank’s role.
In a complaint filed on Tuesday in California federal court, Blake Whitmore, Daniel Raphael, Michael Dominguez, and Tom Lochtefeld say the fictitious film rights licensing enterprise was made possible by banking activities at City National. Seeking class-action status, the plaintiffs cite the bank’s obligations under federal law to know their customers and understand their customers’ banking behavior. The lawsuit asserts that City National would have been in a position to see credits from film distributors like HBO and Netflix, understand how money was being moved in a Ponzi-like fashion, and see how no income was coming in from any online entertainment platform. Further, the complaint discusses how City National’s entertainment division allegedly underwrote a personal line of credit for Horwitz.
Here’s the full complaint, claiming that City National aided and abetted fraud. A rep from City National was unavailable to immediately comment.
In other entertainment law news:
—It looks like a trial will be needed to decide whether CBS owes talent agents who packaged the original MacGyver series. Hanzer Holdings, the successor in interest to Major Talent Agency, allege being entitled to a cut of the recent TV series — which has the parties exploring the difference between spinoffs, reboots and the like. In a motion, the plaintiff looked to kill CBS’ defenses, but the judge says there’s enough factual issues in dispute to deny summary adjudication. For example, the judge rules that Hanzer hasn’t shown it has a talent agency license or that it is excused from needing one under California’s Talent Agencies Act to collect what’s allegedly owed. Here’s the full decision.
—In many ways, Endeavor can thank the quick return of UFC fighting during the COVID-19 pandemic for its latest attempt to go public. But ownership of UFC does have certain legal challenges. One of them, disclosed in the recent registration statement, is lawsuits from fighters alleging monopolization. Something new is a complaint filed April 13 by Devan Beckman, a former office assistant at UFC who alleges disability discrimination arising from not being allowed to work remotely during the pandemic. Beckman says she has a medical condition that places her as “high risk” and faults her former employer with not making a reasonable accommodation. Here’s the complaint.
—On April 13, attorneys for NBC, CBS and ABC affiliates met with the acting commissioner and others at the FCC to discuss a proposal that broadcasters more readily identify foreign sponsorship of programming. Revealing the meeting in an ex parte notice, the affiliates say the new rules “would encompass hundreds and hundreds of agreements that television stations enter into a regular basis covering religious programming on Sunday mornings, local and minor league sports events, children’s programming, various paid programming segments.” The TV affiliates want to narrow what kinds of programming agreements are subject to identifying foreign sponsors and warn of wasting resources during a time when they are dealing with “pandemic, continuing civil unrest, and unprecedented weather occurrences.”
—A California appeals court says the American Idol contestant agreement is not unconscionable. The context for the decision on April 20 is a 14th season contestant whose eardrum was injured by in-ear equipment on set. Unfortunately for him, he signed a liability release. While he argued for the unconscionability of the agreement because it was a “take-it-or-leave-it” deal, the appellate judges say he had weeks to review, could have taken it to an attorney for advice, that his participation in the show didn’t involve public policy to the extent alleged negligence couldn’t be excused by contract, and so on. Here’s the full ruling.
—Fox News has tapped Bernard Gugar as its new general counsel. Now reporting to CEO Suzanne Scott, Gugar formerly worked at Google, Oprah Winfrey’s Harpo, and Simpson Thacher & Bartlett. He received his J.D. from Columbia University School of Law.
—Mark A. Johnson has been elevated to name partner at a Beverly Hills firm that will now be called Behr Abramson Levy Johnson. Johnson’s clients include Angel Manuel Soto, Greg Tarzan Davis and Brian Tee, and he also works with Neal Moritz, Danny DeVito and Jay Roach.