Hedge Funds Named in Amended Lawsuit Against Aylo

LOS ANGELES—Law firm Brown Rudnick announced that it has successfully filed a second amended complaint against Aylo, the parent company of Pornhub, on behalf of a child sexual abuse victim in a federal district court. In the second amended complaint, Colbeck Capital Management and Redwood Capital Management were named alongside Aylo for an alleged scheme of profiting off of sex trafficking and the spread of sexual abuse imagery. Counsel for the plaintiff, Serena Fleites, argues that Colbeck and Redwood capitalized on a business model that commercialized child sexual abuse material (CSAM) and non-consensual intimate imagery (NCII). Bloomberg Law reports that a security and risk assessment consultancy flagged the potential risk of CSAM and NCII when they made initial investments in 2011. Colbeck loaned Aylo, known as MindGeek at the time, funds with an interest rate above 20 percent, argues the amended complaint against the Montreal-based pornography giant. Redwood was added to the funding effort later on, notes the lawsuit. A spokesperson for Redwood told Bloomberg Law reporter Greg Farrell the firm divested its position from MindGeek after allegations of sex trafficking were made in 2020. Another spokesperson representing Colbeck told Farrell that the firm "was a lender to the company more than a decade ago, alongside nearly 100 other financial institutions, including money center banks and asset managers." Fleites was the subject of a controversial investigative commentary by Nicholas Kristof for the New York Times opinion section in December 2020. Fleites said that she was victimized as a minor, and her victimization was commercialized and distributed across Pornhub's network of adult websites under the previous ownership. Since then, MindGeek was rebranded as Aylo and bought out by Ottawa-based private equity firm Ethical Capital Partners (ECP). ECP's leadership comprises former law enforcement executives and criminal law professors promising a new era of transparency. Under Ethical Capital Partners, Aylo reached a deferred prosecution agreement with the U.S. Attorney for the Eastern District of New York to resolve a 30-month-long criminal investigation into alleged profiteering derived from the GirlsDoPorn sex trafficking ring led by now-captured and arraigned Michael Pratt. AVN reported on the agreement noting that Aylo did not admit to a crime nor get convicted of one. However, it had to admit that it profited off of the victimization of the survivors impacted by the GirlsDoPorn scheme and should settle all civil claims brought against the company by paying out damages to those who appeared on Aylo sites without consent. A federal district judge held in 2022 that Brown Rudnick attorneys met the burden of proof to adequately allege that credit card processor Visa "engaged in a criminal conspiracy" to monetize CSAM, notes a press release from the law firm. The firm also represents a plaintiff class of about 100 victims of CSAM and exploitation alleging unlawful activity by Aylo as an entity, specific owners, and officers of Aylo, Visa, Colbeck and Redwood. GirlsDoPorn victims have also filed lawsuits against Aylo. Of those lawsuits, the highest profile case includes one brought by a "Jane Doe," formerly known as Kristy Althaus. Doe appeared in several videos for GirlsDoPorn that were distributed through Pornhub's content partner program at the time. Jane Doe says that she was doxxed and threatened with acts of violence against her and her family by Pratt if she didn't complete her contracted scenes.