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NewsBriefs

the rankings. "There is no other industry that is growing Court lifts surcharge ban for handful of merchants
as rapidly as financial technology, and the disruptions
and shifts that we're seeing have provided unprecedented A U.S. appeals court upheld most of a 2017 lower court
opportunity to drive innovation in the payments space," ruling that called into question a decades-old California
said Michael Nardy, Electronic Payments founder and CEO. ban on surcharging customers paying by credit card. But
the move applies only to five businesses that challenged the
"This recognition validates our commitment to empowering law's constitutionality.
small businesses with relevant, competitive, state-of-the-
art payment technologies," he added. "We're honored to be In a decision handed down on Jan. 3, 2018, a panel of
a part of this prestigious group of companies who share judges for the Ninth Circuit U.S. Court of Appeals, in San
the same philosophies and strive for excellence across all Francisco, ruled that a 1985 California law banning credit
aspects of business." card surcharges violates the First Amendment of the U.S.
Constitution by restricting commercial free speech. In
MoneyGram, Ant Financial to cooperate, not merge doing so, the appeals court partially affirmed a district court
ruling declaring the California statute "unconstitutional,"
Citing lack of federal approval for a proposed merger but it stopped short of permanently enjoining enforcement
between global money-transfer services provider of the law, as the lower court had ruled.
MoneyGram International Inc. and fintech giant Ant
Financial Services Group, the two companies revealed The California Civil Code prohibits retailers from imposing
they have terminated their amended merger agreement, a surcharges on customers who pay with credit cards,
$1.2 billion deal that would have resulted in Ant Financial although it permits discounts for payments made by cash
acquiring all outstanding shares of MoneyGram for $18 per or checks. The state attorney general's office defended the
share in cash. The companies will instead work together on law by arguing it regulated economic conduct, not speech.
strategic initiatives to expand their remittance and digital The state also argued the law was needed to "promote the
payment services internationally. effective operation of the free market and protect consumers
from deceptive practices."
MoneyGram is headquartered in Dallas; Ant Financial is
based in Hangzhou, China. The merger, proposed April DOJ guidelines threaten legal cannabis trade
16, 2017, did not receive the requisite approval of the
Committee on Foreign Investment in the United States. A Jan. 4, 2018, memo by U.S. Attorney General Jeff Sessions
MoneyGram stock dipped about 9 percent Jan. 2, 2018, after gives law enforcement the right to prosecute marijuana-
the termination was announced. Ant will pay a $30 million related activities, even in states that have legalized these
termination fee for the breakup of the deal. practices. Sessions stated that marijuana cultivation,
distribution, possession and use have always been illegal,
Forever 21 investigation finds despite the previous presidential administration's policy
malware, unencrypted data against prioritizing prosecution of several types of
cannabis-related activities in states that have legalized it.
Security analysts criticized Forever 21 Inc. for failing
to protect cardholder data from hackers. On Nov. 14, "It is the mission of the Department of Justice to enforce
2017, the retailer disclosed its POS systems had been the laws of the United States, and the previous issuance of
compromised, but it attempted to downplay the damages. guidance undermines the rule of law and the ability of our
Forensic investigators found anomalous activities had local, state, tribal, and federal law enforcement partners to
occurred between April and November 2017, but company carry out this mission," Sessions wrote. "Therefore, today's
representatives said it has been using encryption and memo on federal marijuana enforcement simply directs all
tokenization since 2015, so a full-scale attack was unlikely U.S. Attorneys to use previously established prosecutorial
to have occurred. principals that provide them all the necessary tools to
disrupt criminal organizations, tackle the growing drug
"Encryption only protects data when it's implemented crisis, and thwart violent crime across our country."
correctly," stated Marc Punzirudu, Director of Security
Consulting Services at ControlScan Inc., a managed security The DOJ said the new guidelines rescind those outlined
and compliance solutions company. "While we don't know in the Cole Memo, a 2013 DOJ memo to all United States
what caused the breach at this stage, Forever 21's public Attorneys originally drafted by former U.S. Attorney
statement indicates that encryption was in place but not General James M. Cole, and revert to the Controlled
functioning in all cases, which tells me it wasn't properly Substances Act of 1970. DOJ representatives called Sessions'
and consistently implemented across the organization's guidance a "return to the rule of law," intended to "reduce
chain of stores." violent crime, stem the drug crisis and dismantle criminal
gangs."

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