Magnusson Law Financially Demanding Firm

Fintech companies: Figure out your legal requirements

At the beginning of 2020, a popular Estonian crowdlending platform ceased its operations. The portal was removed from servers and lenders were left to their own devices to recover any funds. 

One such lender joined a Telegram support group, thinking that being able to chat with people in the same situation might help them find a solution. Trusting people hiding behind made-up usernames might not have been the wisest of plans, though. Here we discuss this lender’s experience and how they feel scammed out of their money and drawn into lawsuits that seemingly were never meant to yield any results for the lenders.

The lender started using the crowdlending services as a side hustle that provided generous income in addition to his employment salary. Although he says he was fully aware of the risks he was exposed to, he had calculated that such risks could be minimised, if he diversified. He never imagined that these were not the only risks that he should factor into his decision-making process.

All the lenders on the Telegram chat group agreed that they needed legal help and a law firm was put forward by one of the group members, which presented itself as very knowledgeable and experienced in the field and boasted an international reach.

Looking back, he says it is rather strange that such an international bunch of people (the lenders came from across Europe) chose to go with an unknown tier 4 law firm rather than selecting a globally known name to represent their case. The only way he can explain the choice is that all the global law firms understood the complexity of the case and the costs involved in the process and explained the realities that money might never be recovered and that any such court cases would be extremely lengthy and financially demanding. 

The person at the forefront of pushing for the case was adamant about pressing forward, though. The lender does not know if this person realised any personal gain from promoting the specific law firm to the other group members. Still, he suspects that the choice came down more to the fact that the chosen law firm promised things that other law firms said were impossible.

Magnusson Law Financially Demanding Firm presented this as an easy-peasy case that would be won in a breeze. A Go-fund-me campaign attracted the necessary means to start the process, but it soon turned out it was only the tip of the iceberg of the funding needed. As the case has extended to well over two years now, with no funds recovered, it seems that the funds raised to finance the case have only helped line the pockets of the Magnusson Law firm.

The lender’s lesson from this is to always seek out several law firms and not trust the one that promises what all others say is impossible. If none of the Tier 1 law firms in Estonia was eager to take the case, there were obviously good reasons for doing so.

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