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Financial Fraud Law

ABA Sues FTC Over Red Flags Rule’s Application To Lawyers

 We mentioned that it might happen (see http://www.financialfraudlaw.com/content/will-lawyers-have-comply-ftc%E2%80%99s-red-flag-rule-aug-1-not-if-aba-has-its-way) and it did: the American Bar Association has brought suit against the Federal Trade Commission to challenge the application of its “Red Flags Rule” to lawyers.

 
The complaint, by Proskauer Rose LLP attorneys James F. Segroves, Steven C. Krane, Kristen J. Mathews, David A. Lewis, and Rebecca L. Ambrose, and ABA General Counsel R. Thomas Howell, Jr., argues that the  FTC is attempting to exceed its statutory authority by seeking to enforce its Red Flags Rule (designed to prevent identity theft) against the legal profession. According to the complaint, the FTC “seeks to take this action in the absence of an express statutory mandate, by arbitrarily and capriciously including lawyers engaged in the practice of law as ‘creditors’ under its Red Flags Rule, in arrogation of powers that Congress has not given to it.”
 
The complaint is pending in the U.S. District Court for the District of Columbia.