skip to Main Content
XBIZ Logo - White uppercase sans-serif type inside blue square with round corners

Federal Trade Commission Continues to Make Its Presence Felt

Make no mistake about it, if you are an online business operator, legal compliance should be at the top of your list of priorities. For the better part of the past decade I have preached about the importance of being cognizant of the Federal Trade Commission and its various powers. Once again, the FTC is making the front page of newspapers and is a hot topic amongst journalists. On May 9, the 1st U.S. Circuit Court of Appeals released its order on John Fanning’s “Petition for Review of an Order of the Federal Trade Commission.” John Fanning petitioned the 1st Circuit to review the FTC’s summary decision finding Fanning personally liable for misrepresentations made on the website Jerk.com. While the court did find that portions of the FTC’s remedial order are overbroad, the court took the time to support the commission’s findings that Jerk.com materially misrepresented the source of its content and its membership benefits. For those of you unfamiliar with the history of the FTC’s investigation and prosecution of Jerk.com, here is some background. From 2009 to 2014, Fanning allegedly operated Jerk.com through his entity, Jerk LLC. Jerk.com was a self-proclaimed reputation management website that amongst other things allowed…

Read more
Escrow Domains homepage

The Birth of Escrow.Domains

I don't make it a habit of endorsing products or services. In fact, until this posting, I have never endorsed a service or a service's operator(s).In this case, an exception needed to be made. A brand new domain transactional service has been launched by a couple of attorneys that I happen to admire and respect. Attorneys Stevan Lieberman and Michael Greenberg went to work to create a trustworthy escrow service for individuals and businesses that engage in various types of domain transactions, including domain purchases, domain rentals, and domain leases. Escrow.Domains is a refreshing service that I'm happy to recommend. So check it out by visiting Escrow.Domains.

Read more
People shaking hands after interview

Law Between the Sheets: Independent Contractor or Employee?

All too often, adult business operators spend so much time focusing on things such as obscenity, record-keeping and intellectual property that they neglect some important corporate issues, including taxation and employment law, which can have a tremendous impact on a business owner. Make no mistake about it, adult business operators need to be concerned with obscenity, record-keeping and intellectual property, but at the same time, they should not be forgetting about some other very important areas of corporate law. Every year around tax season, my office receives numerous telephone calls from clients (individuals and businesses) with concerns related to their own worker status or the worker status of someone providing services on their behalf. The classification of a worker as an employee or independent contractor is very important and any misclassification can create numerous issues. As you read through this article, it is essential to remember that you should always consult with your own attorney and accountant when it comes to employment law and taxations issues. Additionally, the IRS’ website, IRS.gov, contains a library of material that should be used as a resource for employers, employees and independent contractors. Please note that this article is based on U.S. federal tax…

Read more
Legal terminology on green gradient background

It’s Not Just Legal Jargon!

Don’t overlook provisions for Choice of Law, Forum Selection and Arbitration About a month ago, I started thinking about topics to cover in this column and right about the same time I had to upgrade to the latest version of Microsoft Office. As I was installing the software, a message popped up on my monitor that asked me whether I had read and understood the terms and conditions of the software upgrade. I can honestly say that I didn’t spend any more than 3 seconds reading the terms and conditions before I checked the box and proceeded with the installation. Seriously, does the average user actually spend the 10 hours it would take to read the 300-page document? No way! The average user wants to get on with the installation and use the damned software. Somewhere around the “Your installation is 35% complete” mark, the topic of this month’s article became clear. The adult industry is no different than any other industry: Every adult business is engaged in the process of being a party to a contract on a daily basis. The subject matter of the contract may change but ultimately the contract contains some very important provisions that are…

Read more
Vector illustration of a web browser with a pad lock icon

Mounting Breaches: Are You Paying Enough Attention to Internet Security?

For those of you who haven’t been paying attention to the news, there is an epidemic in the online world and it’s getting worse. Last month JPMorgan Chase announced that 76 million households were affected by a recent security breach in which many individuals had their personal information stolen by hackers. To put things in perspective, JPMorgan Chase has 65.8 million open accounts including 30.1 million checking accounts. It’s the second largest mortgage originator in the U.S., and the third largest auto-lender not owned by a car manufacturer. According to the Identify Theft Resource Center, there have been 579 data breaches this year, a 27.5 percent increase over the same period last year. In addition to JPMorgan Chase, reportedly, Target, P.F. Chang’s, Jimmy John’s, Neiman Marcus, Michaels and Sally Beauty Supply have all recently fallen victim to massive hacks and data theft. Millions of pieces of data including names, birthdates, addresses, telephone numbers, drivers license numbers, credit card numbers and more are now in the hands of individuals with bad intentions. This sensitive data is being traded, sold and utilized unbeknownst to individuals all over the world. Sadly, the media doesn’t find all data breaches juicy enough to make the…

Read more
Porn.com Logo - Black uppercase sans-serif type with red period

Porn.com Recovered by Adult Entertainment Lawyer Corey D. Silverstein

FOR IMMEDIATE RELEASE We can now confirm that Porn.com, one of the largest and top adult entertainment websites in the world, was recently “hijacked” by an unknown third party. Porn.com was originally purchased in 2007 for $9.5 million making it the 3rd most expensive domain of all time. Since learning of the hijacking, Porn.com’s attorneys Corey D. Silverstein, and Paul Keating, with the assistance of Larry Walters have worked tirelessly to recover Porn.com and return it to its rightful owner. Porn.com is presently in transit back to domain registrar Moniker. The domain was recovered through the diligent efforts of Porn.com's legal team, in cooperation with the registrars and Verisign. At no time did Porn.com consider payment of any ransom or settlement fee to retrieve its rightful property. As a result of Porn.com’s legal team’s efforts, despite the hijacker’s malicious attempt to steal Porn.com, at no time was day-to-day business affected at Porn.com and consumer experience was not impacted in the slightest. Porn.com and its attorneys continue to conduct a detailed investigation into how this event occurred and intend to hold all responsible parties accountable for their actions. During this unfortunate event, Porn.com’s attorneys utilized all available tools including but not…

Read more
Woman looking at a cell phone with shocked expression

Revenge Porn: Is a Federal Criminal Ban Imminent

According the National Conference of State Legislatures, “revenge porn” is defined as “the posting of nude or sexually explicit photographs or videos of people online without their consent, even if the photograph itself was taken with consent. A spurned spouse, girlfriend or boyfriend may get revenge by uploading photographs to websites, many of which are set up specifically for these kinds of photos or videos. The victim’s name, address and links to social media profiles are often included with the images, and some websites charge a fee to have the materials removed.” In case you haven’t noticed, numerous states across the U.S., the U.S. federal government and various provinces in Canada have been quite busy in 2013 and 2014 in their attempt to fight back against the revenge porn epidemic. Revenge porn has been labeled by lawmakers as a form of “cyberbullying” that is a wildfire raging out of control. Numerous jurisdictions have already passed or are in the process of passing laws that make revenge porn a serious crime. For example, Ariz. Gov. Jan Brewer, recently signed a law that makes it a felony to post intimate images of others online without their consent. Under Arizona law, perpetrators of…

Read more
Vector illustration of pad lock on power button

Acquiring Online Businesses

2013 was a busy year in the online adult industry; especially in terms of business purchases, sales and mergers. Online businesses were purchased at record prices in 2013 and I expect that 2014 will continue the trend. This is the first of a series in which I will discuss some of the more important do’s and don’ts when purchasing an online adult business. This article is not meant to replace the services of an attorney nor is it meant to be an inclusive list of everything that a purchaser should do. Part 1 will focus on a purchase from a buyer’s perspective while Part 2 will focus on a purchase from a seller’s perspective. Keep watch for Part 2 in XBIZ World. Due Diligence I am always amazed by how many purchasers contact my office in the course of purchasing an online business and have no idea what they are buying. The seller of an online business or any business for that matter is always going to present its business in the most favorable light in order to attract more potential buyers and obtain a better purchase price. As the saying goes “don’t buy a book by its cover;” do…

Read more
Closeup of Bartow Florida Map

Obscenity Charges against Florida Store Owner Dropped

BARTOW, Fla. - Polk County prosecutors dropped all charges yesterday against a store owner who was charged with distribution and possession of obscenity with intent to sell after detectives purchased 10 adult movies at a Sunoco gas station and convenience store in Dundee, Fla. "There will be no jail time, no conviction and no fines" for Minakashiben Patel, adult industry attorney Lawrence Walters told XBIZ. Walters and another adult industry attorney, Corey D. Silverstein, represent Patel and worked together to strike a deal with prosecutors. A total of 20 misdemeanors and one felony charge were filed against Patel, relating to adult DVDs sold from her gas station and convenience store in Polk County. Patel also was charged with sale of drug paraphernalia, based on selling Detox brand energy drink. Those charges were dismissed early on. "The obscenity charges have now been dismissed per an agreement with the state, where Ms. Patel agreed to make a $2,000 donation to a drug education and prevention fund," Walters said. "She further agreed to abide by existing state obscenity laws and not to sue the sheriff or prosecutors as a result of the arrest. “Corey and I are proud of the result we obtained…

Read more
Cypres currentcy symbol sinking with shark circling

Learning from the Financial Crisis in Cyprus

There are a multitude of reasons why you may want to have your adult entertainment business set up outside of the United States. Some of the reasons include favorable tax laws, decreased individual liabilities, and staying outside of the jurisdiction of state and federal agents and prosecutors, just to name a few. For the record, I am not suggesting that you pack up your bags and move your corporate entity and money overseas. Nor am I suggesting that setting up your corporate entity and bank relationships overseas is a bad idea. I am merely urging you to carefully analyze all of the legal and financial aspects of your decision whether or not to pursue an overseas business entity and banking relationship. Imagine that you were running a highly successful adult business that you spent a tremendous amount of time, money and energy setting up overseas. Imagine that your business was financially strong and that you had loads of cash in the bank. Finally, imagine that your hard-earned cash was being kept in your overseas bank account, safe from taxation. Sounds pretty good, doesn’t it? Now, I want you to imagine waking up one morning and realizing that you don’t have…

Read more
Back To Top