Category Archives: Blog Business Law

Facebook Security Breach: How to Regulate Users’ Data on Social Media

Posted by Megan Duffy.

At the end of September, Facebook announced that the personal information of approximately 50 million users was put at risk after its computer network suffered a security breach. Three problems in Facebook’s software appear to be what allowed the hackers to compromise user accounts in the largest breach since the company’s founding 14 years ago. The first two bugs were introduced in a tool designed to offer more privacy for users. The third was introduced in a tool created in July 2017 meant to help users upload birthday videos more easily and compounded the problems created by the first two. The exact time that the attack took place is not clear, but it seems to have been after third bug was introduced. The breach was discovered by the company in the week before it was announced. The company has not been able to determine the exact identity or origin of those responsible, nor if the attack was meant to target particular users. It’s possible that the attackers were able to take control of the user accounts, which would also give them access to the hundreds of other apps that offer logging in with Facebook as a way to use their services. The company is unsure of to what extent the attackers were able to access these third-party accounts. With the announcement, Facebook also said that it had corrected the issues and notified law enforcement officials.

The attack is not the first incident to draw criticism towards Facebook and the way the company handles user data and disinformation spread on the platform. Facebook, along with other social media outlets, was used to push a campaign by Russian operatives to spread false information surrounding the 2016 presidential election. The company was criticized for being slow to respond to what was happening and acknowledge the abuse of the platform. Sheryl Sandberg, Facebook’s chief operating officer, testified before a Senate committee last month about the actions being taken to keep the same turn of events from affecting the midterm elections this November. Another instance that drew criticism took place in the past year when it was discovered that Cambridge Analytica, a British analytics firm, gained access to millions of users’ personal information. Mark Zuckerberg, co-founder and chief executive officer of Facebook, also testified in a congressional hearing about the company’s role in the breach. The problems with disinformation and security on the social network have led to calls from lawmakers for more regulation on the platform and others like it. An article in the New York Times by Mike Isaac and Sheera Frenkel, entitled “Facebook Security Breach Exposes Accounts of 50 Million Users,” described the criticism, saying, “‘This is another sobering indicator that Congress needs to step up and take action to protect the privacy and security of social media users,’ Senator Mark Warner, a Democrat from Virginia and one of Facebook’s most vocal critics in Congress, said in a statement.”

Discussion about how the government might become more involved in ensuring privacy and security on social media has also drawn attention to how significant the role the personal information that can be found online can be in society overall. Placing any information on the Internet comes with the inherent risk of somehow being made accessible by others. However, this risk is becoming more prevalent as utilizing the Internet and the platforms it makes available are an ever-growing part of our everyday lives. April Doss, chairwoman of cybersecurity at the law firm Saul Ewing, commented on the effect of social media specifically in the article, saying, “This has really shown us that because today’s digital environment is so complex, a compromise on a single platform – especially one as popular and widely reaching as Facebook – can have consequences that are much more far-reaching than what we can tell in early days of the investigation.” According to the same article, “‘Breaches don’t just violate our privacy. They create enormous risks for our economy and national security,’ Rohit Chopra, a commissioner of the Federal Trade Commission, said in a statement. ‘The cost of inaction is growing, and we need answers.’”

Megan is a business law student at the Stillman School of Business, Seton Hall University, Class of 2021.

Works Cited:
Isaac, Mike, and Sheera Frenkel. “Facebook Security Breach Exposes Accounts of 50 Million
Users.” The New York Times, The New York Times, 28 Sept. 2018,

Buying A Franchise

Posted by Panayioti Logothetis. 

Who wouldn’t want to own a successful franchise such as McDonald’s, Dunkin Donuts or 7-11? The market has examined the best recipes for a quarter pounder, a Boston cream donut, and the right combination of candy bars and chips to have next to the register. The buyer of the franchise believes they are buying a franchise that has a proven successful model on all levels from the labeling to the valuing to the proper promotion strategies. The work has been done! Unfortunately, a lot can go truly wrong for a prospective entrepreneur!

According to three professionals with widespread knowledge of the franchising world, Ed Teixeira, a former franchisor and franchisee, Josh Brown, a lawyer from Indiana who specializes in franchising, and Sean Kelly, a former executive of the franchise, Auntie Anne’s, all suggest 12 interesting things to consider before buying into a franchise that maybe one wouldn’t have thought of. Of the 12 recommendations, “giving yourself a personality test,” “assess your strengths,” “beware of financial consultants,” “don’t believe the franchise lie,” “dig for dirt,” “talk to franchisees,” and “explore working in a store,” all appear to be tackled easily enough by the would-be entrepreneur on their own. The remaining five recommendations, however, definitely would require business law knowledge that the franchisee should consider retaining a professional for. As examples, “study the field,” “count your money,” “read the entire financial disclosure document (FDD),” “consider hiring professional help,” and “do cost/benefit analysis,” should be thoroughly explained before that signature binds one to an agreement that could prove detrimental.

Buying into a franchise should be a positive experience for all involved, including the franchisor and the franchisee. Whether one uses their life savings or successfully borrows the money to make their dream come true, one must always proceed with caution. Franchisees often believe first hand that if the franchise has been around forever, their location is bound to be successful as well. However, seeking franchise legal advice is imperative when taking on this endeavor. J. Michael Dady, founding partner of Dady & Gardner, a firm specializing in franchise law says, “[f]ranchisors care about top-line revenues; franchisees care about bottom-line cash flows.” Thus, “[t]here’s an inherent conflict between franchisors and franchisees,” (5 Ways Franchisees Can Protect Their Business Interests by Lissa Harris, Entrepreneur). Many may not realize the franchisor’s royalties are based on the franchise’s gross revenue, not profit. As a result, a franchisor doesn’t just sell one of their franchises and leave the franchisee free reign to do what they want in their newly located store. The franchisor, rightfully, continues to control the business and can impose promotions, for example, at the expense of the individual franchisees’ cash flow – even though the franchisor believes it will benefit both sides. Although you may love that deliciously seasoned quarter pounder at McDonald’s, that deliciously frosted Boston cream donut at Dunkin Donuts, or the easily accessible combination of sweet and salty by the register at your local 7-11, make sure you weigh out the pros and cons prior to signing your name on a legal franchise contract agreement!

Panayioti is a mathematical finance and information technology management major with a minor in pre-medical studies, at the Stillman School of Business, Seton Hall University, Class of 2021.

Article: “12 Things To Do Before You Buy A Franchise” By: Susan Adams

The 20 Million Dollar Tweet

Posted by Kyle Greene.

The SEC recently filed a lawsuit against former Chairman and current CEO of Tesla Elon Musk because of a tweet he sent out earlier this year. The tweet stated that he had plans to take the company private when the stock price reached 420 dollars. He also included that he had funding secured for this, and he may have at the time of the tweet, but obviously was not able to see the deal through. After the tweet, Tesla stock increased quickly by about 9 percent. The SEC claimed that Musk had published “False and Misleading” statements and therefore had violated insider trading and market manipulating laws. Some believe the motive behind the tweet was to punish short sellers of the stock, but Musk has adamantly denied any foul play.

The SEC wasted no time in their attempt to force Musk to settle, threatening him by saying they wanted to have “a judge bar Musk from serving as an officer or director of a public company.” After the SEC took this action, Musk and Tesla ended up settling for an amount of 20 million dollars each in fines. The SEC has forced Musk to step down from his chairman position on the Tesla board of directors; originally they wanted to remove him from CEO as well, but were only able to remove him from the board. I feel as though the SEC used this case as an example to other high level executives of what happens when inaccuracies are so carelessly thrown around. And in an interconnected world, everyone finds out about everything very quickly, so if you decide to publish a statement about the company it better be accurate because you cannot take it back.

This case was never about the wellbeing of Tesla shareholders; the objective was to make headlines and send a message. On the other hand, Musk has not always been a shining example of how to act in the business world, with his recent stunt on the Joe Rogan podcast. The Tesla board of directors has actually set up a committee to monitor Musk’s communications moving forward, which is a smart move by them. Regulators have an eye out for Tesla and Musk especially, being that he is in the public eye so often. Although it is obvious that Musk acted irrationally and illogically, the nature of his work and the innovative mindset behind his companies is one of controversy and pushing the envelope. This careless mistake was just a mishap along the way, and no matter how serious the SEC may want to treat it, “Why would the SEC want to harm the company more than the tweet itself?” Whitehead said. “That would be like throwing the baby out with the bathwater.”

Kyle is a business management major at the Stillman School of Business, Seton Hall University, Class of 2020.


French Court Refuses UBS Request to Drop Money Laundering Charge

Posted by Anniek Jansen.

A French entity of the Swiss bank UBS Group AG has been prosecuted for aggravated money laundering and tax fraud. After an inquiry into allegations it turned out that French executives of UBS assisted prosperous clients to avoid taxes. In addition, UBS, Switzerland’s largest bank, has to respond to the charges that it has illegally sought customers in France.

According to the French law, a defendant can raise objections to the case based on ignorance of constitutional rights. Therefore, as a reaction to the accusations, UBS requested to drop the money laundering charges, and limit trial proceedings. Before the trial, the bank commented that “the hearing would allow it to respond to the often unfounded allegations that were frequently leaked to the media”. The French court, however, defined the Swiss bank’s arguments against the case as “devoid of seriousness”, and decided to refuse the request by the Swiss bank to drop the money laundering charges.

The prosecutors of the case measured that up to 10.6 billion euros (12.3 billion dollars) was denied by the Swiss bank to the French tax authorities. In French criminal law, it states that the judges are able to impose a fine as high as half the amount of money laundered. Therefore, if UBS is found guilty in this case, it could be fined up to 5 billion euros (5.76 billion dollars). In addition, the bank could owe compensations to the French taxman for the missing revenue, and the Executive Board of UBS could risk jail time. Moreover, all these consequences could have been prevented if UBS accepted a settlement offer of 1.1 billion euros (1.3 billion dollars) made by the authorities during the French investigation. Instead, judicial sources confirmed that UBS turned down the offer.

Anniek is mathematical finance and information technology management major at the Stillman School of Business, Seton Hall University, Class of 2020.




Navigating Medical Cannabis and the Commerce Clause

Posted by Barrett R. Preister.

The absence of a workable judicial commerce clause touchstone continues to leave heavy speculation regarding the future of nationwide, commercial cannabis. The Clause serves to uphold many responsibilities of the government, with many strict guidelines. Starting in California in 1996, the state’s voters passed the Compassionate Use Act, legalizing marijuana for medicinal use. Although federally illegal, the state has continued to this day to distribute cannabis and similar products to its consumers. It always perplexed me how a substance, classified directly with amphetamines in Schedule 1, conflicting with the Controlled Substance Act (CSA) yet still be sold online/at a local marketplace among decriminalized states. This sparked my interest to investigate the precedent for cannabis legislation. After a DEA seizure of prescribed marijuana in a patient’s home, a group of activists sued the DEA, stating that the CSA was exceeded Congress’s commerce clause power. The district ruled against the group, but the Ninth Circuit Court of Appeals reversed and ruled the CSA as unconstitutional since it applied to medical marijuana use solely within one state. The court relied on U.S. v. Lopez (1995) and U.S. v. Morrison (2000) to confirm that marijuana did not “substantially affect” interstate commerce and thus could not be regulated by the government.

Currently, with the long arm of the law provided by the Tenth Amendment and Article VI of the Constitution, Congress has much power over all commerce; intra and interstate. Today, there still exists much controversy regarding the consumption and distribution of the cannabis plant nationwide. More recently in the news, the Los Angeles Airport (LAX) updated its procedural policy to permit airport guests to possess up to 28.5 grams of marijuana and 8 grams of concentrate products while boarding departing aircrafts (Los Angeles World Airports). Although this procedure has been coordinated with the local police department (APD), the screening stations administered by the TSA are still under federal jurisdiction, and therefore procedure. With this groundbreaking decision, it tests the scopes of the commerce clause even more. Going back to the 1995-2000 rulings, consumption of cannabis only fell within the CSA’s jurisdiction once it affected multiple states. With the ability for consumers to now legally carry their medicinal products across state lines (only to those decriminalized), how does the commerce clause get to maneuver? Similarly to the Wickard v. Filburn case, there is growing concern that consumers producing their own resource of crop could influence the local economy if others were to follow suit; in this case, cloning their seeds. Growing access to these online services has opted many consumers to grow their own plants in the comfort of their home; most in hall closets or small windows for the light-driven plant to thrive. If more “Green States” arise economically prosperous and grow reliant on cannabis production, there could be vacuum that the government has authority to fill to ensure there is no impediment on local business to thrive due to outside competition.

Barrett is a marketing and applied ethics major at the Stillman School of Business, Seton Hall University.



Judge Blocks U.S. From Ending Protections for Some Immigrants

Posted by Brittany Howanice.

In the latest case with President Trump’s immigration policies the judges have used Trump’s comments to go against him. With the new immigration policy, Trump wants to end protections that allowed immigrants from countries to live and work legally in the United States. He also wants to separate families, and even children who were born in the U.S. may be faced with being separated from their family or having to move to a different country when all they know is here. Trump wants to end protections from the Sudan, Nicaragua, Haiti and El Salvador. He also wants to ban people from some Muslim-majority countries. However, temporary protected status has been granted to about 300,000 people whose countries have been destroyed by natural disasters or war.

Jablon reported that “the ruling said the government failed to show the harm of continuing the 20 year old program and that the plaintiffs established how uprooting those immigrants could hurt the local and national economy.” Changing something that doesn’t need changing isn’t always a good thing and might end up causing more harm than good. The immigration policy is an example of this because most of the jobs that immigrants do are not taking away from the ones that we are trying to get. They usually have the construction or agriculture jobs, or work in a private household as a maid, gardener or nanny. Also, immigrants make up about 17% of the work force; and, if we change the immigration policy and ban those from working, it will definitely affect our economy. Also, most Americans will not want to work for the pay that immigrants get so that will also affect the economy.

Overall, ending protections that allow immigrants to live and work legally in the United States will have a negative effect on our economy. Also, by banning those from living here and separating them from their families may not be ethical. It is said that “more than 200,000 immigrants could face deportation because of the change, and they have more than 200,000 American children who risk being uprooted from their communities and schools, according to plaintiffs in the lawsuit.” The Trump administration has also ended the immigrant program for the four countries mentioned earlier. In conclusion, ending protections for immigrants will not only greatly affect them, but it will also affect the United States and the economy.

Brittany is pre-business at Seton Hall University, Class of 2021.


South Dakota v. Wayfair, Inc. (2018) – A Case Brief

Posted by Thomas DeFrancesco.

South Dakota has a state tax for sales of goods and services that are made by retailers of the state. Out-of-state retailers were making sales to customers in the state of South Dakota and not collecting and remitting sales tax in South Dakota. However, these retailers are allowed to do that based on the ruling made in Quill Corp. v. North Dakota, 504 U.S. 298 and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753. The state was worried they were losing funding due to out-of-state retailers not collecting and remitting the South Dakota’s sales tax. To solve this concern, South Dakota created a law that commanded out-of-state retailers who make more than 200 sales transactions and at least $100,000 in revenue from those sales to collect and remit sales tax as if they were located in South Dakota. Companies who met those requirements failed to follow the newly made law so the South Dakota legislature brought the issue to court.

Should the respondents have to register for licenses to collect and remit the sales tax regardless if they are physically present in the state or not?

South Dakota law is permitted to tax sales from sellers who are outside of that particular state as long as the seller collects at least $100,000 in sales revenue or more than 200 sales transactions.

The court derived its reasoning from other cases including Quill v. North Dakota and National Bella Hess v. Department of Revenue of Ill. The court explained how the physical presence rule in Quill v. North Dakota is “unsound and incorrect.” Since the internet has such a great impact on business, retailers who do business through the internet must pay taxes in that particular state of the sale. Therefore, the Quill v. North Dakota reasoning is no longer relevant.

Thomas is a finance major at the Stillman School of Business, Seton Hall University, Class of 2021.


Elon Musk in Deeper Trouble

Posted by Paul H. Duffy.

Ever since Elon Musk tweeted on August 7th about the possibility of taking his company private he has been in deep trouble with the SEC. He made a series of tweets about the potential move saying funding was secured for $420 a share. After a few weeks, the SEC began to file a lawsuit against Musk after he backed out of the decision. The SEC claimed he misled investors and manipulated stocks. Initially Tesla and Musk were ready to fight the suit but a few days later things changed. “Elon Musk reached a settlement with the Securities and Exchange Commission that allows him to remain chief executive of Tesla Inc. but requires that he step aside from the chairman role for three years,” (Higgins and Michaels). The agreement also included a $20 million fine. Tesla also decided to make changes, “Tesla has agreed to appoint two new independent board members, establish a new committee of directors and create controls to oversee Mr. Musk’s communications, according to the SEC,” (Higgins and Michaels).

This isn’t the first time Tesla and Musk are in trouble with the SEC. Last year, the SEC began probing Tesla about misleading investors over the production of their newest model the Model 3. “As production started, he claimed about 1,600 cars would be made in the third quarter of 2017 before reaching 20,000 in December. Those forecasts were far below what he predicted roughly a year earlier, when he said as many 200,000 Model 3s would be made in the second half of 2017,” (Michaels, Glazer, and Higgins). While no official charges have been filed, the SEC has probed into Tesla’s manufacturing data. However, it will be difficult to prove Musk and Tesla intentionally tried to mislead investors. “Tesla already faces private litigation in a San Francisco federal court, where a group of investors alleged the company misled investors about how quickly it could ramp up Model 3 production,” (Michaels, Glazer, and Higgins). Tesla is fighting this saying they disclosed problems in a timely manner.

While Musk is a very famous and popular business owner, these problems seem to start adding up. Musk shows that tweeting business announcements on a personal account can create a grey area. Was his tweet an official business announcement or just a personal idea? Tesla is known as the company of the future and in the long run they will be stable and making profit. But with this increased production problems, Tesla could see their business really start going backwards. Time is of the essence especially as other established companies are moving into the electric car market. Time will tell if Tesla can right the ship.

Paul is business management major at the Stillman School of Business, Seton Hall University, Class of 2021. 


Newsweek’s Former Owner Faces Fraud Charges

Posted by Brooke Harrington.

Newsweek magazine, a magazine known for facing financial difficulties between 2008 and 2012, was found at the center of a “multimillion-dollar fraud and money-laundering conspiracy” according to a formal accusation made by Manhattan prosecutors. IBT Media, which owns Newsweek magazine, and Christian Media “were charged with trying to defraud lenders by pretending to borrow money for sophisticated computing services.” The money was actually funneled back to accounts controlled by IBT Media, Christian Media and their owners. Etienne Uzac, co-founder of IBT, and William Anderson, Christian Media’s former chief executive and publisher, were charged with “misrepresenting Newsweek’s financial health and creating a fictitious accounting firm, Karen Smith L.L.P., along with a series of fake financial statements to dupe lenders into putting up millions of dollars in 2015 and 2016.” The companies were claiming to utilize the money in these accounts for sophisticated computing services. Therefore, “Oikos Networks, a computer company, was also named in the indictment, charged with providing fewer, lower-quality computers than the expensive ones on invoices.”

These charges were brought about after an extensive investigation by the Manhattan district attorney’s office into the company’s financial dealings. The scandal became even more prevalent when Newsweek employees began delving into the company accounts themselves, as they believed something to be off, and were fired very soon after.

On the other hand, Uzac is claiming that the Manhattan district attorney, Cyrus R. Vance JR, is making these allegations as a retaliation against IBT Media for reporting last fall on a campaign contribution to Mr. Vance from the lawyer for Harvey Weinstein, the powerful film producer who was convicted of sexual assault crimes. Uzac’s lawyer claims that they will strongly defend against these “baseless charges.” They claim no one lost money and that the district attorney’s case is completely “made up and untrue.” Uzac and his lawyer claim they are “disturbed” that they are initiating a case where there has been no financial harm.

Thus, one can conclude that this case needs to be further investigated. But based on the details above, one can take note that Uzac and his lawyer are using a defense based solely in accusation, without any concrete evidence that this fraud did not occur to back up their claims. It is through corporate social responsibility that those who run corporations should and can act ethically and be accountable to society for their actions. It is also an ethical principle that corporations should be liable to stakeholders employees, customers, creditors, suppliers and the community in which that corporation services. Through these allegations one would presume that if these fraud charges are held true, then IBT Media both did not uphold corporate social responsibility nor the idea that corporations should be liable to stakeholders, as they fired employees who became suspect, and mislead stakeholders through their fraudulent accounts.

Brooke is a business administration with a concentration in IT and marketing at the Stillman School of Business, Seton Hall University, Class of 2021.

False Advertising Allegations for La Croix

Posted by Adriana N Di Dio.

Currently, National Beverage Corp., is facing a lawsuit due to allegations deeming that the “all-natural label” on their popular sparkling beverage, La Croix, is falsely advertised. The lawsuit was filed by law firm Beaumont Costales, representing customer Lenora Rice. According to the lawsuit, plaintiff Lenora Rice was misled by the “100 % naturally flavored” label because the sparkling refreshment actually contains chemicals considered synthetic by the Food and Drug Administration. Intending to reach a class-action status, circuit court in Cook County, Illinois made “…claims that LaCroix contains ethyl butanoate, limonene, linalool and linalool propionate — ingredients it says are non-natural and synthetic compounds” (Galligan). Specifically, it is noted that linalool is found in cockroach pesticide, while limonene can cause kidney tumors. The lawsuit also makes claims that National Beverage Company knew about the synthetic ingredients and still decided to knowingly deceive consumers. However, the National Beverage Company is refuting the claims, arguing that all ingredients are certified to be natural, and as for the claim by the court, “…the company said in a statement, slamming it as ‘without basis in fact or law regarding the natural composition’ of LaCroix sparkling waters” (Thorbecke).

There is much debate over whether the claims are true of the beverage being non-natural. Reports by Popular Science indicate that the chemical limonene is actually naturally occurring, while also claiming that linalool truly does come from plants. Also noted is the fact that the only effect these chemicals could have would be irritation to the eyes or skin. Food safety experts claim that only a large amount of these chemicals consumed would present real risk. It has been said that the same chemicals in La Croix are found in citrus beverages and cinnamon. Though these chemicals can be naturally derived from fruits and plants, it is still possible for synthetic production of those same chemicals. However, PubChem states that “…three of the four chemicals named in the lawsuit are included on an FDA list of ‘synthetic flavoring substances … that are generally recognized as safe for their intended use’” (TodayShow). Therefore, this indication of the chemicals being “synthetic but safe” may not be enough for them to be deemed as completely “natural”.

In essence, the point of the lawsuit is to halt New Beverage Company’s advertisements of La Croix being completely natural while also intending to award damages to La Croix customers who had believed the sparkling beverage to be completely natural. According to a legal expert, if the claims of the synthetic ingredients have substantial evidence, there can be serious detriment to the company – it may be necessary for the company to change their packaging and marketing strategy. Currently, it is noted that “the allegations are weighing on the shares of its parent company National Beverage… Shares of National Beverage, La Croix’s parent company, were trading down nearly 3 percent on Friday” (Galligan).

All in all, when running a business and manufacturing goods, it is important to always be truthful when it comes to food and food labels. Consumers should be provided by law with truthful labels so that customers can make choices for their own dietary needs and overall health. Faulty labels taint the truthfulness of the company, and the unknown may pose risks to those consuming the good. There needs to be more nutritional transparency, so that customers are truthfully aware of what they consume. Though the chemicals in La Croix are known to not bring about serious risk, some of those chemicals can be produced synthetically, and are not fully natural. The doubt from customers of the truth of the label is sufficient to hurt the authenticity of a company and should definitely be addressed.

Adriana is a business student at the Stillman School of Business, Seton Hall University.

Works Cited:

Galligan, Laura. “LaCroix Faces Suit Alleging It Mislabeled Its Sparkling Water as
Natural.” CNBC, CNBC, 5 Oct. 2018,

Thorbecke, Catherine. “Makers of LaCroix Hit with Lawsuit Alleging Their Sparkling Water
Contains ‘Synthetic’ Ingredients, Including a ‘Cockroach Insecticide’.” ABC News, ABC
News Network, 8 Oct. 2018,

TodayShow. “What’s Really in LaCroix Sparkling Water? New Lawsuit Claims It’s Not ‘All
Natural’.”, TODAY,