Changes

PayPal faced another legal battle in 2002 days after its Initial Public Offering. A class action lawsuit was filed by the law firm Jacoby & Meyers in behalf of consumers at California Superior Court in Santa Clara County alleging that the company violated the Federal Electronic Fund Transfer Act. According to Atty. Gail Koff, PayPal locked a customer's account instead of freezing, the amount of transaction in question when it suspects that a fraud has been committed. Since the consumers entire accounts were frozen, they weren't able to make any business transactions (send and receive payments). They claimed that PayPal's restriction to their accounts is illegal. <ref>[http://news.cnet.com/2100-1017-842240.html PayPal hit by class-action suit]</ref> A similar  class action lawsuit was filed by Girard, Gibbs & De Bartolomeo, a law firm in San Francisco at the U.S. District Court for the Northern District of California.<ref>[http://news.cnet.com/PayPal-customers-sue-in-federal-court/2110-1017_3-860582.html?tag=mncol;txt PayPal customers sue in federal court]</ref> In 2004, PayPal settled the class action lawsuit and agreed to pay $9.25 million which will be distributed to all the complainants. The administrative costs and legal fees were included in the settlement.<ref>[http://www.auctionbytes.com/cab/abn/y04/m07/i30/s01 PayPal Sends Users Notice of Class-Action Lawsuit Settlement]</ref>

PayPal faced another legal battle in 2002 days after its Initial Public Offering. A class action lawsuit was filed by the law firm Jacoby & Meyers in behalf of consumers at California Superior Court in Santa Clara County alleging that the company violated the Federal Electronic Fund Transfer Act. According to Atty. Gail Koff, PayPal locked a customer's account instead of freezing, the amount of transaction in question when it suspects that a fraud has been committed. Since the consumers entire accounts were frozen, they weren't able to make any business transactions (send and receive payments). They claimed that PayPal's restriction to their accounts is illegal. <ref>[http://news.cnet.com/2100-1017-842240.html PayPal hit by class-action suit]</ref> A similar  class action lawsuit was filed by Girard, Gibbs & De Bartolomeo, a law firm in San Francisco at the U.S. District Court for the Northern District of California.<ref>[http://news.cnet.com/PayPal-customers-sue-in-federal-court/2110-1017_3-860582.html?tag=mncol;txt PayPal customers sue in federal court]</ref> In 2004, PayPal settled the class action lawsuit and agreed to pay $9.25 million which will be distributed to all the complainants. The administrative costs and legal fees were included in the settlement.<ref>[http://www.auctionbytes.com/cab/abn/y04/m07/i30/s01 PayPal Sends Users Notice of Class-Action Lawsuit Settlement]</ref>

==Shareholders Lawsuit==

===Shareholders Lawsuit===

On July 7, 2002, two shareholders of PayPal filed a lawsuit against the company's merger with eBay. The shareholders claimed that eBay's proposed price for the Paypal stocks is "inadequate and unfair", which is 0.39 eBay shares for every PayPal share. The total value of the transaction was $1.5 billion. Despite the objections, the Department of Justice cleared the Ebay and PayPal merger after conducting an investigation. <ref>[http://www.zdnet.com/news/paypal-ebay-hit-with-shareholder-lawsuit/124018 PayPal, eBay hit with shareholder lawsuit]</ref>

On July 7, 2002, two shareholders of PayPal filed a lawsuit against the company's merger with eBay. The shareholders claimed that eBay's proposed price for the Paypal stocks is "inadequate and unfair", which is 0.39 eBay shares for every PayPal share. The total value of the transaction was $1.5 billion. Despite the objections, the Department of Justice cleared the Ebay and PayPal merger after conducting an investigation. <ref>[http://www.zdnet.com/news/paypal-ebay-hit-with-shareholder-lawsuit/124018 PayPal, eBay hit with shareholder lawsuit]</ref>

<ref>[http://news.cnet.com/2100-1017-954551.html?tag=mncol;txt eBay-PayPal deal clears federal scrutiny]</ref>

<ref>[http://news.cnet.com/2100-1017-954551.html?tag=mncol;txt eBay-PayPal deal clears federal scrutiny]</ref>