Latest news with #AdamMoelis
Yahoo
22-05-2025
- Business
- Yahoo
Evolve dodges Yotta lawsuit for now
This story was originally published on Banking Dive. To receive daily news and insights, subscribe to our free daily Banking Dive newsletter. A federal judge dismissed Yotta Technologies' lawsuit alleging its former banking partner, Evolve Bank & Trust, had stolen and misappropriated millions of dollars in customer funds. Yotta alleged in September that Evolve had 'utterly failed in its most basic duty to its customers,' many of whom lost access to – some temporarily, some still – a cumulative $100 million-plus. But Judge Trina Thompson of the District Court of Northern California dismissed Yotta's lawsuit against Evolve on May 15, writing that the fintech 'did not sufficiently plead the 'who, what, when, where, and how'' of the alleged mismanagement by Evolve and its middleware partner Synapse, which filed for bankruptcy in April 2024. Thompson ordered Yotta to provide more details in an amended complaint by June 2. "We are pleased that the judge granted our motion to dismiss," an Evolve spokesman said via email. "We have maintained from the beginning that the claims lacked merit, and we are gratified that the Court agreed." Yotta intends to file an amended complaint by the deadline and 'remain[s] committed to pursuing this case," Yotta CEO Adam Moelis told Banking Dive. 'In addition, we will continue to do everything we can to help depositors get their funds back in full,' Moelis said. Evolve filed its motion to dismiss the lawsuit in December, alleging that Yotta's lawsuit treats Synapse and Evolve as the same entity, without specifying what each party did. Synapse is 'a non-party who is immune from suit given it is in bankruptcy proceedings,' Evolve noted. 'These are more than just technical violations,' Evolve contended in its motion to dismiss. 'They are carefully crafted allegations to (a) avoid the reality that Evolve — as Yotta admits — was merely responsible for providing banking services, whereas Synapse was responsible for the reporting of these transactions and balances to Yotta end users; and (b) maintain a suit against Evolve because Synapse is immune from suit because it is in bankruptcy.' More information on Synapse's role in the misappropriation of customer funds is ordered in Yotta's amended complaint, as is more information on allegations that Evolve conspired to commit fraud, according to the dismissal document. Evolve, Synapse and Yotta have traded barbs throughout the last year, blaming parties other than themselves for the scandal that broke out after Synapse's bankruptcy filing. Weeks after the filing, on May 11, 2024, customers of Yotta and other fintechs, including Juno and Copper – all connected to Evolve's banking services through Synapse – were locked out of their accounts without warning. For some customers, those accounts represented their life savings, in the tens or even hundreds of thousands of dollars. Filing an amended complaint will pose challenges for Yotta, according to Todd Baker, a senior fellow at the Richman Center for Business, Law & Public Policy at Columbia University, as reported by American Banker. 'It is a chicken-and-egg problem, because without discovery Yotta is in a tough situation proving the level of culpable actions by Evolve personnel necessary for its claims under law,' he said. This is one of several lawsuits Evolve is facing at present. Evolve and Lineage Bank, one of Synapse's other bank partners, are defendants in a class action lawsuit filed by customers of Yotta and Juno in April. The lawsuit, which accuses the lenders of negligence in monitoring and mismanagement of funds, followed a November class action against Evolve, Lineage, American Bank and AMG National Trust, which made similar allegations. The November lawsuit was challenged jurisdictionally, however, leading to the April filing. Recommended Reading Figure withdraws bank charter application Sign in to access your portfolio
Bloomberg
10-04-2025
- Business
- Bloomberg
How Financial Tech and Outsourced Banking Made Saving Risky Again
Adam Moelis and Ben Doyle had an outside-the-box business pitch: Many Americans struggle to build a savings habit but also enjoy spending money playing the lottery. What if they could combine a bank account with a sweepstakes to make savings more fun? The two entrepreneurs developed the idea with the help of Y Combinator, a storied tech incubator where business founders can hone their ideas and get them in front of venture capitalists. In 2020, Moelis and Doyle launched a finance app called Yotta. For every $25 users deposited into Yotta, they'd get a virtual sweepstakes ticket instead of interest. Prizes ranged from 10 cents to $10 million. Drawings would happen once a week, encouraging people to keep coming back to the app. Yotta Technologies Inc. got early investments from VC firms including Base10 Partners and Core Innovation Capital, as well as hedge fund manager Cliff Asness and Moelis' father, Ken, the billionaire founder of the investment bank Moelis & Co.
