Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES NEWS: New York challenges “Trump University” advertising, (Aug 26, 2013)

By Jeffrey May, J.D.

The State of New York has filed a complaint against Donald Trump, The Trump Entrepreneur Institute—formerly named Trump University LLC—and Trump University's former president, alleging fraudulent, illegal, and deceptive conduct in connection with the offering of seminars, which purportedly promised to teach Donald Trump’s real estate investing techniques to attendees. New York Attorney General Eric T. Schneiderman announced on August 25 that the state had conducted an investigation and determined that the defendants made numerous misrepresentations in marketing their program.

In a number of TV interviews and tweets today, Trump defended the institution. Calling the lawsuit “frivolous,” he denied claims that he did not meet with students and did not pick faculty members.

“More than 5,000 people across the country who paid Donald Trump $40 million to teach them his hard sell tactics got a hard lesson in bait-and-switch,” said Attorney General Schneiderman. “Mr. Trump used his celebrity status and personally appeared in commercials making false promises to convince people to spend tens of thousands of dollars they couldn't afford for lessons they never got. No one, no matter how rich or popular they are, has a right to scam hard working New Yorkers. Anyone who does should expect to be held accountable.”

Between 2005 through 2011, Trump University operated as an unlicensed educational institute that promised to teach real estate investing techniques but instead misled consumers into paying for a series of expensive courses that did not deliver on their promises, according to the state's announcement. The state challenged as false ads displaying Donald Trump’s photograph and signature and claiming that consumers would learn “from Donald Trump’s handpicked instructors.”

The state contends that the name “Trump University” was used even though the operation lacked a charter necessary under New York law to call itself a university. In May 2010, Trump University dropped the “university” from its name, but that was approximately five years after the New York State Education Department informed the operation that its practices violated New York laws.

According to the state, consumers attending free seminars did not learn Donald Trump’s real estate techniques. Attendees were allegedly lured in by the claims and then misled by Trump University instructors’ misrepresentations to sign up for a $1,495 three-day seminar.

Companies: The Trump Entrepreneur Institute

News: StateUnfairTradePractices NewYorkNews