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UNITED STATES DISTRICT COURT
DISTRICT OF DELAWARE
CARDCONNECT, LLC,
Plaintiff,
v.
SHIFT4 PAYMENTS, LLC f/k/a
LIGHTSPEED PAYMENTS, LLC, and
SHIFT4 CORPORATION f/k/a
LIGHTSPEED POS, INC.,
Defendants.
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C.A. No. 1:19-cv-01921-MN
VIDEO DEPOSITION OF JARED ISAACMAN
Via Zoom Videoconference
Wednesday, June 30, 2021
9:08 a.m.
Reported by: Colleen M. Cohan, RPR
Job No. 700478
ESQUIRE DEPOSITION SOLUTIONS, LLC
www.esquiresolutions.com
Case 1:19-cv-01921-MN Document 151-8 Filed 01/28/22 Page 3 of 16 PageID #: 5798
Esquire Deposition Solutions
JARED ISAACMAN (6/30/2021)
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APPEARANCES OF COUNSEL:
FOR THE PLAINTIFF:
YOUNG CONAWAY STARGATT & TAYLOR, LLP
Rodney Square
1000 North King Street
Wilmington, Delaware 19801
BY: MOLLY LERARIS, ESQUIRE
mlera is@ycst.com
and
STEPTOE & JOHNSON LLP
1330 Connecticut Avenue, N.W.
Washington, D.C. 20036
BY: JENNIFER D. BENT, ESQUIRE
jbent@steptoe.com
MATTHEW D. BOWN, ESQUIRE
mbown@steptoe.com
JARED R. FRIEDMANN, ESQUIRE
jfriedmann@steptoe.com
FOR THE DEFENDANTS:
MORRIS, NICHOLS, ARSHT & TUNNELL LLP
1201 North Market Street
Wilmington, Delaware 19801
BY: JACK B. BLUMENFELD, ESQUIRE
jblumenfeld@mnat.com
and
O'MELVENY & MYERS LLP
400 South Hope Street
18th Floor
Los Angeles, California 90071
BY: DANIEL P. COLLINS, ESQUIRE
dcollins@omm.com
EVAN J. LITTERA, ESQUIRE
elittera@omm.com
(Appearances Continued on Next Page)
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Esquire Deposition Solutions
JARED ISAACMAN (6/30/2021)
APPEARANCES OF COUNSEL (CONTINUED):
FOR THE DEFENDANTS:
MORGAN, LEWIS & BOCKIUS LLP
One Federal Street
Boston, Massachusetts 02110
BY: NICOLE M. JANTZI, ESQUIRE
nicole.jantzi@morganlewis.com
ALSO PRESENT:
Jonathan D. Isaacman, Esquire
James L. Waters, Videographer
---oOo---
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JARED ISAACMAN
having been first duly sworn, was examined
and testified as follows:
EXAMINATION
BY MS. LERARIS:
Q. Good morning. Can you please state your
full name and spell your last name for the record?
A. Jared Isaacman, I-S-A-A-C-M-A-N.
Q. Good morning, Mr. Isaacman.
A. Good morning.
Q. My name is Molly Lera is. I'm with
the law firm Young Conaway Stargatt & Taylor in
Wilmington, Delaware, and I represent, together with
my colleagues at Steptoe & Johnson, the plaintiff in
this case, CardConnect.
As the court reporter told you, this is
a deposition. This is an opportunity for me to ask
you some questions under oath.
Have you ever been deposed before?
A. Yes, I have.
Q. Have you ever testified in court?
A. Yes, I have.
Q. Okay. So you understand the process
here?
A. I do.
Q. Great. I just want to review some
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1 basic rules very quickly.
2 If you don't hear or understand any of
3 my questions, just ask, and I'll be happy to rephrase
4 them for you.
5 If you provide an answer, I will assume
6 that you both heard and understood the question;
7 okay?
8 A. Okay.
9 Q. Also, it's important that we have a
10 clear record, so, if you could, please verbally
11 answer all of my questions by saying yes, no, I don't
12 know. Please avoid uh-huh, uh-uh, or shaking your
13 head. We need to be able to follow this later when
14 we read it; all right?
15 A. Yes.
16 Q. All right. Great.
17 If you need a break at any point,
18 Mr. Isaacman, you don't have to wait for me to offer.
19 If you need to use the restroom or get something to
20 drink, just let us know, and we will find a natural
21 stopping point; okay?
22 A. Okay.
23 Q. Do you understand everything that I
24 have told you thus far?
25 A. I do.
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1 A. No.
2 Q. Okay. And by 2016, you knew that one
3 option instead of an ISO or a merchant acquiring
4 processor would be a PayFac, correct?
5 A. Not -- not really.
6 Q. Okay.
7 A. That kind of brings us up to the time
8 period where I became more knowledgeable about what a
9 PayFac was.
10 Q. Got it. So 2016 is when you're saying
11 you -- for the first time, you were made aware of
12 what a PayFac was?
13 A. No. As in that's when -- that's when
14 ongoing education on the industry was occurring,
15 including greater familiarity with PayFacs as a
16 model.
17 Q. And how -- how did you learn about
18 that?
19 A. I think I learned it along the way,
20 you know, I -- as I did with other industry events,
21 which is just, you know, interactions with other
22 parties, you know, reading, researching.
23 Q. What do you mean by "interactions with
24 other parties"?
25 A. Talking to -- talking to people within,
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1 you know, the payment industry at large. And, you
2 know, as I mentioned on the prior call, you know,
3 sometimes that's in banks. Sometimes that's with
4 other ISOs. Sometimes that's reading industry trades
5 or publications.
6 Q. Do you recall who you would have been
7 interacting with or speaking to in 2016 about the
8 PayFac model?
9 A. I don't.
10 Q. Do you know what publications you might
11 have been reviewing in 2016 to learn about the PayFac
12 model?
13 A. I -- I don't.
14 Q. Was 2016 the first time you discussed
15 the PayFac model with anyone at CardConnect?
16 A. I don't know.
17 Q. Do you recall the first time you spoke
18 to anyone from CardConnect about a PayFac model?
19 A. I'm sure it had occurred with Jeff
20 Shanahan.
21 Q. When?
22 A. I don't know.
23 Q. Who else inside CardConnect did you
24 speak with about the PayFac model?
25 A. I don't know.
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Q. Do you recall having any conversations
in 2016 with anyone at CardConnect regarding the
PayFac model?
A. I'm sure there was, you know,
continuing conversation within the entire payment
industry, including CardConnect, about, you know, this
emerging, you know, trend.
Q. Okay. Mr. Isaacman, I'm going to ask
you to look back on your screen. I think the same
exhibit that you had previously, Exhibit No. 7 [sic],
is up on your screen again.
A. Okay.
Q. All right? And I'd like you to turn to
Page 7, please.
A. (Complies.)
Q. All right. I think we had started
talking about this before. So this -- again, this is
the email chain where we see those text messages in
there, correct?
A. That's correct.
Q. Okay. And we -- we previously talked
about where it says "I'm looking at CardConnect."
Do you see where Ms. Bent highlighted
that for you --
A. Yes.
Q. -- previously?
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1 A. Yes.
2 Q. And my question for you is: In
3 6/20/2016, when you wrote "I'm looking at
4 CardConnect," what did you mean?
5 A. I -- I think I probably, you know, was
6 intending to convey that I was thinking about buying
7 CardConnect as an acquisition.

15 Q. And then it continues, and he indicates
16 he was -- and he says, "They were about to pull the
17 trigger on a big PayFac deal with an ISV called
18 ShopKeep when we grabbed them."
19 Do you see that?
20 A. Yeah.
21 Q. So did you learn that information from
22 Jeff Shanahan in 2016?
23 A. No.
24 Q. You did not learn it from him in 2016?
25 A. I -- I -- correct, I did not, and I
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1 don't believe those words, you know, represented
2 exactly what occurred.
3 Q. And that's why you questioned him on
4 it, correct?
5 A. I think that's inferred, yes.
6 Q. So when you talked about looking at
7 CardConnect, what exactly were you looking at?
8 A. I don't know what that means,
9 "looking."
10 I think it was an expression used as
11 part of, you know, dialogue in the context of
12 discussing, you know, a potential acquisition, but --
13 and it was probably not much more than that.
14 Q. Okay. So you, at that time, were
15 considering purchasing CardConnect?
16 A. It was -- I would say it was very
17 preliminary.
18 So, you know, if you look at the
19 timeline that we've been discussing, I mean, this is
20 just days before -- just days before my -- my --
21 Lightspeed's acquisition of Merchant Warehouse, which
22 was a very significant undertaking.
23 So the idea that, you know, at that
24 moment, I was, you know, "looking" at something else,
25 that would include, you know, many months of due
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1 diligence and, you know, negotiations and a lot of
2 other activities, I would say it was just premature.
3 That -- that was probably just a reference to, you
4 know, thinking about it.
5 Q. Okay. And why? Why were you thinking
6 about it at that time?
7 A. Why was I thinking about it? Because I
8 knew they were in a process, and, you know, I think
9 it's pretty clear from the text exchange I was
10 probably not happy about it.
11 Q. Why were you not happy about it?
12 A. Because I was -- I was -- I had a good
13 relationship with Jeff Shanahan and some of the other
14 people at CardConnect, and I was very familiar with
15 their capabilities, and they were good.
16 And I didn't want them to go to
17 somebody else.
18 Q. Okay. So why -- why would that matter
19 to you if they went to somebody else?
20 A. I would be concerned and threatened.
21 MR. COLLINS: Objection; form.
22 THE WITNESS: I would be concerned that
23 I would lose a partner I had known for a long time and
24 potentially be facing off as against them as a
25 competitor.
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A. What does "compete" mean in this -- I
don't -- I don't know what this means.
MR. COLLINS: Objection; form.
THE WITNESS: I mean, they had a
competitive model to be able to support ISVs.
Q. Okay. And just so I'm clear, at this
time in 2016, June, CardConnect was not a PayFac;
correct?
A. I -- I -- again, I disagree -- I
disagree with "they were not a payment facilitator."
I think there are elements of that they absolutely
were.
Q. Such as?
A. They had -- they had their own sub --
I'm sorry. What's the terminology? They had
registered groups of merchants with the card brands.
Q. But you didn't know that in 2016, did
you?
A. Did I know that?
Q. Yes.
A. I -- I wouldn't say I knew, as much as
I probably just assumed many large ISO did -- were that
way.
Q. And again, Mr. Isaacman, I want to be
clear. I'm not talking about ISOs, I'm talking about
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1 PayFacs. And my question is specific to PayFacs.
2 In June of 2016, you did not know that
3 CardConnect performed any PayFac services, did you?
4 A. No.
5 Q. All right. Mr. Isaacman, I'm going to
6 ask you to pull back up Exhibit 7, and I'd like you to
7 turn to Bates page ending in 488.
8 A. Okay.
9 Q. We're going to start at that bottom
10 text message from you on the second page.
11 Do you see where it says "I knew they
12 were in market"?
13 A. Um-hum.
14 Q. Okay. And there, you're talking about
15 CardConnect, correct?
16 A. Yes.
17 Q. And by "in market," that means that
18 CardConnect was looking to be sold?
19 MR. COLLINS: Objection; form.
20 THE WITNESS: Yes.
21 BY MS. LERARIS:
22 Q. And how did you know that CardConnect
23 was, quote/unquote, "in market"?
24 A. I had a relationship -- a long
25 relationship with Jeff Shanahan.
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Q. So he told you that they were looking
to be sold?
A. Yes.
Q. Okay. And then your text message
continues and said, "And was super pissed," correct?
A. Yes.
Q. Okay. Why were you super pissed?
A. I think I can refer back to some of my
earlier testimony that I was -- I was concerned that
they would get a -- a -- find a partner that, you
know, I had a very good relationship with would
potentially turn into a competitor.
MS. LERARIS: One moment,
Mr. Isaacman.
(Pause in proceedings.)
BY MS. LERARIS:
Q. Mr. Isaacman, in that same message, you
said, "I want the tech, not the ISO."
Do you see that?
A. Yes.
Q. What did you mean by that?
MR. COLLINS: Objection; form.
THE WITNESS: I -- that's -- it's
unclear. I mean, as I mentioned before, I probably
valued their capabilities, and some of -- some of
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1 those capabilities could have been, you know, from a
2 technology perspective.
3 And what did I mean by "not the ISO," I
4 -- I -- that's -- that's unclear to me.
5 BY MS. LERARIS:
6 Q. Okay. What technology did CardConnect
7 have at that time that you wanted?
8 A. I don't -- I mean, that's too broad and
9 too vague of a question. I don't know what
10 technology they had that I wanted at the time.
11 I'm just saying that I held in high
12 regard a variety of their capabilities, and some of
13 those could have been from a technology perspective
14 that could have been attractive.
15 Q. Such as?
16 A. I don't know.
17 Q. Do you recall what those capabilities
18 were that you held in high regard?
19 A. Well, I think it's clear throughout
20 that time period that the topic of PayFacs would have
21 been, you know, discussed as it was, you know, a part
22 of dialogue in the industry.
23 So I'm sure -- I'm sure that that was,
24 you know, one example of their capabilities.
25 Q. Did Jeff Shanahan ever tell you the
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1 tech that he was looking to sell?
2 A. No.
3 Q. Did he ever share any information
4 about the specific technology CardConnect was looking
5 to sell?
6 A. Not that I recall. He -- he has
7 always -- he has always spoken very highly of
8 everything they have. Some of that could be
9 perceived as, you know, sales.
10 Q. Did you ever ask him for specific
11 information about the technology they were looking to
12 sell?
13 A. I don't recall.
14 Q. When you wrote, "I want the tech, not
15 the ISO," were you referring to CardConnect's PayFac
16 capabilities?
17 MR. COLLINS: Objection; form.
18 THE WITNESS: I don't know. Again, I
19 don't know if that was accurate that they had PayFac
20 capabilities then, but I -- I -- again, I'm not
21 exactly sure where the line of questioning is going.
22 BY MS. LERARIS:
23 Q. I'm just trying to understand why you
24 wrote "I want the tech, not the ISO."
25 A. Again, I'm not sure what -- I'm not
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1 sure what that specifically means, "tech, not the
2 ISO."
3 Q. So is it your understanding that it
4 would not include potentially their PayFac
5 capabilities?
6 A. I'm not -- I mean, I don't know even --
7 I don't know what the -- what capabilities they would
8 have had from a PayFac perspective at that time.
9 I'm not even -- I'm not even sure of the
10 accuracy of that statement, that they had, you know,
11 some PayFac capabilities.
12 Q. But in 2016, in June of 2016, that was
13 something that you were interested in; correct?
14 MR. COLLINS: Objection; form.
15 THE WITNESS: I was -- I was interest --
16 interested, as in I was aware there was an emerging
17 trend in the payment industry for more companies using
18 PayFacs, yes.
19 BY MS. LERARIS:
20 Q. And that was something Shift4 needed at
21 that time, correct, PayFac services or capabilities?
22 MR. COLLINS: Objection; form.
23 THE WITNESS: Needed, no, absolutely
24 not.
25 BY MS. LERARIS: