On July 24, 2001, the Los Angeles City Attorney filed a 14 count misdemeanor action against the company and its principal, Carl Carranza. The complaint alleged in part, that the defendants made misleading statements in print ads, verbally, and on their website.

On May 17, 2002, Flashcast, and its principal, Carl Carranza, were convicted of 10 counts of using false and misleading advertising in violation of the California Business & Professions code. The company and Mr. Carranza were placed on probation for 36 months and ordered to pay a fine of $4, 050.00. They were also ordered to include a statement listing any fees charged, including monthly fees, in all of their advertisements. Anyone seeing an ad that does not contain the fee information is asked to contact Mark Lambert, Deputy Los Angeles City Attorney at (213) 978-8070.