Troutman Pepper Locke State Attorneys General Team

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New York Attorney General Letitia James led a bipartisan multistate coalition to reach a $24 million settlement with cryptocurrency company Nexo for allegedly offering and selling unregistered securities and commodities. As noted in AG James’s press release, each of the 53 U.S. jurisdictional North American Securities Administration Association (NASAA) members will be eligible to claim a settlement of more than $424,000. In a parallel action, Nexo agreed to pay $45 million in penalties to the U.S. Securities and Exchange Commission (SEC).

Arizona Attorney General Mark Brnovich released opinion No. 22-(R22-011), concluding earned wage access (EWA) products that are fully non-recourse and no-interest are not “consumer lender loans” under Arizona law. Thus, those who make, procure, or advertise EWA products are not required to be licensed as a “consumer lender” by Arizona’s Department of Insurance and Financial Institutions. The AG’s findings apply to EWA providers working with an employer as well as those working directly with an employee.

On January 17, after an extensive investigation by the Consumer Protection Section of the Colorado Department of Law, Colorado Attorney General Phil Weiser announced that medical billing company Flatirons agreed to refund payments by Coloradans for allegedly deceptive billing notices, totaling $12,933.89. Flatirons creates and processes claims for insurance reimbursement, coverage appeals/denials, monetary payments owed by patients, while also serving as a billing point of contact with insurers and patients.

On January 17, Pennsylvania Acting Attorney General Michelle Henry (R) succeeded AG Josh Shapiro who became the state’s 48th governor. Since 2017, Acting AG Henry served as former AG Shapiro’s first deputy — the first woman in that position — overseeing all legal, criminal, and civil matters in the AG’s office. Governor Shapiro now plans to nominate her as his “permanent” replacement to the Republican-controlled state Senate, so she can serve the remaining two years of his term as a full-fledged AG.

On January 18, North Carolina Attorney General Josh Stein (D) announced his bid for governor in a three-minute video to replace term-limited Democrat Roy Cooper. Since his announcement comes nearly two years (657 days) before the 2024 election, AG Stein likely hopes his early launch will dissuade other Democratic primary challengers. More than 150 elected officials in North Carolina, including 64 members of the state House and Senate, 16 mayors, and 28 district attorneys and sheriffs, endorsed AG Stein’s announcement. AG Stein garnered national attention by leading lawsuits against opioid manufacturers and by initiating efforts to end robocalls and robotexts.

In addition to a night of revelry, the 2023 new year will trigger the many new privacy mandates in the Virginia Consumer Data Protection Act (VCDPA) for businesses operating in Virginia — only the second state with active consumer privacy legislation behind California, with other states’ privacy laws, such as Colorado, Connecticut and Utah, taking effect later this year. Virginia Attorney General Miyares is no doubt eager to flex his new authority under the VCDPA, meaning companies that process, collect, or sell Virginians’ personal information should carefully read the VCDPA to ensure their compliance with the new law.

On January 10, Virginia Attorney General Jason Miyares detailed his 2023 General Assembly session priorities, supporting law enforcement, victim prioritization, and community safety. AG Miyares plans to accomplish his goals — “to crack down on organized retail crime, punish drug dealers peddling lethal fentanyl, support members of the Jewish Community, and protect Virginia consumers from policies designed for Californians” — through bipartisan collaboration with the General Assembly.

On January 5, New York Attorney General Letitia James sued Celsius founder and former CEO Alex Mashinsky for making repeated misrepresentations about the company’s financial products and asset holdings to investors. AG James describes the now bankrupt crypto-lending platform Celsius as “a cryptocurrency lending platform where investors could deposit their cryptocurrency in return for promises of high yields on those digital assets.”

On January 4, Colorado Attorney General Phil Weiser announced that his office had reached settlements with Bellco and Canvas credit unions which will provide $4 million in refunds of unearned guaranteed automobile protection (GAP) premiums to consumers that the credit unions failed to provide previously. In June 2022, we posted here about the five prior settlements reached by the state AG over GAP refunds. Based on the AG’s comments in the press release, we expect continued scrutiny in this area. “When hardworking Coloradans pay for GAP coverage, they deserve to receive what they are owed … My office will continue to hold accountable companies that violate the law and leave Coloradans without the money they were due.”

Just before the new year, Maryland Attorney General Brian Frosh announced a $250,000 settlement with Caliber Homes, Inc. to resolve allegations that Caliber attempted to mislead approximately 220,000 consumers into thinking that its mailings actually came from the customers’ current mortgage companies by sending advertisements that displayed the name and mailing address of the consumers’ original mortgage company instead of Caliber’s. AG Frosh alleged that Caliber’s conduct violated Maryland law, which prohibits licensed lenders from advertising under any name or address that is not their own.