Lawsuit: Adjourned Privacy Matters v. Nexalin [2025] FCR 36

[JunkCereal]

Your honor,

As the current Secretary of Commerce, I wish to file an Amicus Brief regarding the corporate structure of Vanguard & Co and how that may impact the defendant of this case.

You may do so.

 

[Avaneesh2008]

Brief

IN THE FEDERAL COURT OF THE COMMONWEALTH OF REDMONT
AMICUS BRIEF

Your honor,
The current question that is posed in the court is whether or not Nexalin is liable for the liabilities of Vanguard Securities LLC. I wish this brief will give some more context on the corporate structure of Vanguard & Co so the court will be able to make an informed decision on if Nexalin can be considered liable for Vanguard Securities LLC.

Looking at a literal sense, Vanguard Securities LLC is owned by Nexalin directly. As Vanguard Securities LLC is a sole properitorship, the owner of the DB would be liable for any liabilities that the company may take on. This means that the debt will pass onto Nexalin.

However, Vanguard Securities LLC was also publicly shown multiple times as owned by Vanguard & Co. As shown in the attached diagram, Vanguard Securities was a subsidiary of Vanguard & Co. This diagram was published in #economics on April 9th, 2025. More instances of this diagram was also shown to DOC employees in classified channels or chats deleted by Nexalin. This isnt just a one-off instance of Nexalin claiming this, he showed this to Department of Commerce employees and released it in public, showing it was at least true until the time Vanguard & Co was seized by the DOC.

What does this mean? While Vanguard Securities LLC is a sole propertiorship and the in-game owner of said firm is the one liable, you can bring a good point that Vanguard & Co actually was the one to own the sole properiorship of Vanguard Securities LLC as shown by the diagram. While they aren't the in-game owner of the firm, it can be argued that Vanguard & Co couldn't directly own Vanguard Securities LLC due to limitations in the plugin.

I hope from this information that the court may be able to come to a much better consensus on how to rule on this case. While the defendant of this case may not matter as much, it does give precedent that sole properitorships may not be owned by individual companies. The court should be informed of this information so that they dont unwillingly create precedent that may be against the court's intentions. Allowing Nexalin to be sued for the actions of Vanguard Securities LLC implies that sole properitorships may not be owned by non-player entities and does have an impact on corporate law. While the court may be willing to create this precedent, the court should be informed that it will be creating such a precedent.

Message Link of Diagram in Discord

Spoiler: Vanguard & Co Business Structure

 

[Avaneesh2008]

I edited the brief to fix the broken message link

 

[JunkCereal]

@ToadKing, please provide a brief explaining the purpose of requesting punitive damages on behalf of the other 33 users. As a class action group, do you plan to distribute winnings amongst the other users not listed as plaintiffs in this case?

In the brief, you may include any other information you deem relevant.

 

[JunkCereal]

@ToadKing, please provide a brief explaining the purpose of requesting punitive damages on behalf of the other 33 users. As a class action group, do you plan to distribute winnings amongst the other users not listed as plaintiffs in this case?

In the brief, you may include any other information you deem relevant.

Notification and update on this.
The judgement will be ready to be posted 24 hours after the time the quoted post was made. If a brief is not filed before then, it will not be considered in the judgement.

 

[ToadKing]

Notification and update on this.
The judgement will be ready to be posted 24 hours after the time the quoted post was made. If a brief is not filed before then, it will not be considered in the judgement.

Your Honour,

I will be unable to provide an answer in the time required. I humbly request a 24-hour extension so I can finish writing a response to your questions.

 

[JunkCereal]

Your Honour,

I will be unable to provide an answer in the time required. I humbly request a 24-hour extension so I can finish writing a response to your questions.

Extension granted.

 

[ToadKing]

Pursuant to Rule 3.3 (Amendment to Complaint), the Plaintiff amends the Prayer for Relief section of the Complaint as follows:

IV. PRAYER FOR RELIEF
The Plaintiff seeks the following from the Defendant:

1. Punitive damages in the amount of $50,000 per named Plaintiff (6 plaintiffs x $50,000 = $300,000) for the Defendant's outrageous conduct in violation of the Privacy Act;

2. Additional punitive damages in the amount of $1,650,000, representing damages for the estimated 33 additional affected users, calculated as follows:
- VMA's Discord server contains 104 members
- Subtracting 3 Discord bots and 1 Defendant = 100 potential users
- Applying a conservative estimate of one-third actual platform usage = 33 affected users
- 33 users x $50,000 per user = $1,650,000

3. 30% Legal fees, totalling $585,000 as provided by Section 9 of the Legal Damages Act.

2. Additional punitive damages in the amount of $5,800,000, representing damages for the 116 additional affected users, calculated as follows:
- VMA had 123 total registered users (P-015)
- Subtracting 6 current named plaintiffs and 1 defendant (Nexalin) = 116 affected users
- 116 users x $50,000 per user = $5,800,000

3. Legal fees in the amount of $1,830,000, as provided by Section 9 of the Legal Damages Act.

EXPLANATION FOR AMENDMENT:
This amendment updates the damages calculation based on the actual number of VMA users, replacing previous estimates with concrete data showing 123 total registered users affected by the alleged Privacy Act violations.

Spoiler: P-015

Link to sheet

Brief

Pursuant to Your Honour's request for clarification regarding punitive damages for additional users, the Plaintiff submits this brief:

@ToadKing, please provide a brief explaining the purpose of requesting punitive damages on behalf of the other 33 users.

1. Section 5(1)(a) of the Legal Damages Act provides that punitive damages serve "to punish them for their outrageous conduct and to deter them and others like them from similar conduct in the future." The systematic privacy violations affected all VMA users uniformly, making each user entitled to equal protection and remedy under the Privacy Act.

2. The Defendant has AFFIRMED that "These practices affected all VMA users in a uniform manner" (Answer 9). The Privacy Act violations - including the absence of privacy policies, false claims about disclosures, and undisclosed data sharing - harmed every user regardless of whether they are named plaintiffs.

3. The requested punitive damages reflect the true scope of Nexalin's outrageous conduct affecting over 100 users and provide both meaningful compensation for victims and effective deterrence against future privacy violations by financial institutions and other organisations. Privacy matters.

As a class action group, do you plan to distribute winnings amongst the other users not listed as plaintiffs in this case?

4. Now that we have obtained the complete list of all VMA users, MZLD would initiate an outreach program to contact all affected users and inform them of their rights to claim their portion of any damages awarded.

5. Each of the 116 non-plaintiff users will be contacted directly through available means (Discord, in-game, etc.) and informed that they are entitled to claim damages from this case.

 

[Dartanboy]

Your honor,

Might I file an Amicus Curiae Brief regarding the additional damages requested for the 116 non-plaintiff users?

This will be strictly factual and unrelated to any relationship I had with the Defendant prior.

 

[JunkCereal]

Your honor,

Might I file an Amicus Curiae Brief regarding the additional damages requested for the 116 non-plaintiff users?

This will be strictly factual and unrelated to any relationship I had with the Defendant prior.

You may.

 

[JunkCereal]

Court Order

IN THE FEDERAL COURT OF THE COMMONWEALTH OF REDMONT
Privacy Matters v. Nexalin [2025] FCR 36
ORDER GRANTING MOTION FOR DEFAULT JUDGMENT

Since Defendant failed to amend their Answer to Complaint and demonstrated a lack of interest in pursuing this case, the Motion for Default Judgment is granted pursuant to Rule 3.6 of Court Rules and Procedures. The judgment is entered below.

DEFAULT JUDGMENT
The plaintiff, Privacy Matters, is a class action group comprised of people who used the service Vanguard Market Access (VMA), and the defendant, Nexalin, was the previous owner of VMA. Privacy Matters filed this action in the Federal Court against Nexalin, originally as Vanguard Securities LLC, to recover damages from multiple alleged violations of the Privacy Act at the time of Nexalin’s ownership. After Nexalin failed to produce documents in violation of a court order, failed to amend their Answer to Complaint, and communicated they were no longer pursuing the case, this case ultimately became a hearing with Privacy Matters to further scrutinize their claims. For the same reasons, the Motion for Default Judgment was granted and this judgment is being entered.

I. STATEMENT OF FACTS
VMA was a financial service operated by Nexalin. See P-005; P-007. Though VMA had a Terms and Conditions (T&C), that T&C did not describe that it would use a user’s private/personal information, nor did it describe what private/personal information it would use or how it would be collected. See P-004. None of this information was stated by VMA in any document. Regardless, VMA continued to use users’ information, namely their banking information. See P-002; P-003; P-006. Nexalin was aware of the need for a privacy policy, as evidenced in P-007. Discover Bank is a registered financial institution with the Department of Commerce (DOC) with a declared db, "DB." See P-014.

II. DISCUSSION
A. PRIVATE/PERSONAL INFORMATION
It is suggested from the lack of provided definitions that the legislature intended for “personal information” and "private information" to be read as their plain meanings. (Note that § 6(1)(a) lists what "private information" includes and is not a strict definition of the term.) Using these plain meanings, bank account information would be classified both as private and personal information.

B. TREATMENT OF VANGUARD SECURITIES LLC AND DISCOVER BANK
It remains unclear whether the in-game db “VMA” was intended to be the db for Vanguard Securities. A similarity in name is not enough to prove association of a db with a company, and that was the only evidence provided.

One of the purposes of registering a business with the Department of Commerce is to make it clear to others who should be held liable in situations where a business inflicts harm. Failing to register a business hinders this ability, as clearly demonstrated by this case. Because it was Nexalin’s failure to properly register Vanguard Securities LLC with the DOC - and since they continued to act on "behalf of" this nonexistent company - they will be held personally liable for the actions of said defunct company.

Discover Bank and Nexalin are distinct entities. They have separate capacities for finances, employed people and - specifically for Discover Bank - management. In terms of sharing information with regards to the Privacy Act, Discover Bank and Nexalin will be treated separately.

C. A PURPOSE OF THE PRIVACY ACT AND CONSENT
An implied purpose of the Privacy Act is to ensure individuals know that their personal information is being collected or used. If an organization didn’t have to disclose what information they were using unless someone inquired about it, then it would be possible for users to use a service completely unaware that their personal information was being used or collected. This means that these rights afforded to individuals would essentially be made irrelevant unless, like in this case, users happened to realize through random chance that their information was being used.

This principle can help inform us what was meant by “consent” in § 9(1)(a). Specifically, it is implied that for an individual to provide consent they must 1.) be expressly informed of the information that’s being used and 2.) expressly provide consent. In this situation, Nexalin did provide a mechanism to fulfill the second requirement via the usage of the “you agree to use” disclaimer on the VMA login, as shown in P-001, but they failed in fulfilling the first requirement. Nexalin didn’t expressly state what personal information would be used, either in a separate privacy policy or in the T&C. They therefore did not obtain the users’ consent.

D. REMAINDER OF THE CLAIMS
Using the earlier insight in § II.C, Nexalin failing to expressly disclose to users in any document what personal information would be used/collected is a plain violation of the Privacy Act §§ 4(2), 5(1)(a). As for the remaining claim, as long as an organization expressly informs users what personal information they’re using and why, a support ticket system is more than adequate to fulfill the requirements set by §§ 5(1)(c), 5(a)(d), 5(a)(e) of the Privacy Act.

E. REPORTING
Both The_Donuticus v. GER [2022] SCR 18 and xxTigOlBittiesxx v. Department of Justice [2021] SCR 16 establish that you can not sue to recover damages if you knowingly allow the harm to occur. Nexalin is not protected by precedent set by either case because users asking for the information in a support ticket would not have prevented Nexalin’s prior nondisclosure/noncompliance.

F. DAMAGES
Nexalin was aware of the necessity of a privacy policy. Deciding to operate VMA while being aware of noncompliance with the law, and then failing to provide documents ordered by the Court, elevates their conduct to “outrageous.” Though their actions warrant punitive damages, $50,000 per user is not a proportionate amount so the Court will award a modified amount of $10,000 per plaintiff.

There is no statutory authorization for establishing “classes” of people in a case, and there is only precedent for class action groups, i.e. multiple named plaintiffs filing as a “single entity.” See, e.g. Devaluation Defense Collective v. Commonwealth of Redmont [2025] FCR 9. Establishing a procedure robust enough to handle a class of people in a lawsuit would be substantial to a point of encroaching upon the powers of the legislative. See Constitution § 2(1). To avoid this, damages will only be awarded to the named plaintiffs, and because it is still possible for other users to sue and claim damages, the requested damages on behalf of other users will not be awarded.

III. DECISION
In the matter of Privacy Matters v. Nexalin [2025] FCR 36, the Court finds Defendant,
For violating the Privacy Act § 5(1)(a): LIABLE
For violating the Privacy Act § 4(2): LIABLE
For violating the Privacy Act §§ 5(1)(c), 5(1)(d), 5(1)(e): NOT LIABLE
For violating the Privacy Act § 9(1): LIABLE

The Court grants the following modified prayer for relief:
1. $60,000 ($10,000 * 6 plaintiffs) in punitive damages.
2. $18,000 (30% of case value) in legal fees, as stipulated by the Legal Damages Act § 9(2)(c).

The Federal Court thanks all involved.