Posted by Yacheng Xu.
Federal Reserve Bank of New York President William Dudley “warned that investing in privately issued digital money such as bitcoin could end in big financial losses for those involved.” He opined, “There is a bit of a, I would say, speculative mania around cryptocurrencies in terms of their valuations, which I view as pretty dangerous, because I don’t really see what the actual true underlying value of some of these cryptocurrencies actually is in practice.”
The Fed’s vice chairman for supervision, Randal Quarles, said, “While these digital currencies may not pose major concerns at their current levels of use, more serious financial-stability issues may result if they achieve wide-scale usage.”
From my perspective, with the gaining popularity of cryptocurrency like Bitcoin, more risks such as hacking and scandals will in crease. Bitcoin proves to be a highly speculative asset. Nevertheless, the Fed failed to enforce any rules, and the SEC merely issued some warnings regarding Bitcoin and future ICOs. The cryptocurrency is basically free of government regulations, which easily can trigger an investment bubble, illegal fund-raising, and undermining the market economy. Hence, in China, the government has shut down the cryptocurrency exchanges in September, 2017 and prohibit new ICOs.
It is indisputable that the virtual money is a great way to avoid the control by a central bank. Given the pros and cons of cryptocurrency, we should have a compromise solution, allowing the existence of exchanges but setting regulations at the same time.
Yacheng is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Posted by Hongkun Ma.
On Nov. 22nd, the ride-hailing app company Uber Technologies Inc. paid hackers $100,000 to conceal an incident that Uber revealed 57 million users’ personal information like names, phone numbers and addresses around the world. 600,000 Uber drivers’ license numbers also were released.
Whether the incident violated state law is being investigated by five state attorneys general: New York, Washington, Missouri, Connecticut and Massachusetts. Forty-eight states have laws that customers have right to know a company’s data breach and will impose fines if company violates them. For Uber, the incident has been so complicated, which lost the trust of millions of customers.
The incident reflected how a data breach can trigger responses from mass of regulators and enforcement agencies, and how a private company can have flexibility to deal with this kind of things. International regulators investigated the incident right away and data protection officers from throughout the European Union announced a task-force to look into the incident. Experts indicated that Uber had more flexibility in the way it report the incident, which can be reported as a security incident, because Uber is a private company. Uber is facing crisis of confidence and it’s difficult to win back the trust of their huge numbers of customers.
Finally, I would like to give some of my opinions. Uber is a private company, which is a third party between customers and taxi drivers. In China, Uber Company is almost monopoly. When it came into China market at the very beginning, most customers were attracted by its low price, which sometimes were even free to take a taxi. Uber gained a huge customer base from the beginning. Later, customers found Uber was not as cheap as before. It became more and more expensive, sometimes was more expensive than regular taxi. The strategy actually made the company lose some of their customers, but most customers stayed. And many customers found that Uber keeps ride details in their system for so long. Some of customers received messages that contained their personal information like history location, ride history or even private residences. From my perspective, it is possible that Uber sold customers’ personal information to third-party companies which would look for visits to key locations, such as particular market, meet-up events, café and so on.
The incident of Uber Company that they concealed the cybersecurity problem really violated law from state level, and not federal. For Uber, the challenge quickly became more complicated and needed to be handled.A company’s reputation can be easily built up and destroyed. And how to win back the trust of customers is becoming a really hard task for Uber Company.
Hongkun is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Posted by Aliasger Mithaiwala.
Qualcomm, a telecommunications company that designs and sells wireless telecommunications products and services, is suing Apple Inc. for patent infringement. Apple was originally the initiator in this entire legal conflict because they were the first to file a lawsuit against Qualcomm. Specifically, they filed an “antitrust suit against [them], arguing that the chipmaker’s licensing practices are unfair, and that it abused its position as the biggest supplier of chips in phones” by charging Apple more in payments than any other company (King). This suit Apple initiated claims that Qualcomm has been “charging royalties for technologies they have nothing to do with” and that the telecommunications company has been “withholding nearly $1 billion in payments from Apple as retaliation for responding truthfully to law enforcement agencies investigating them” (Balakrishnan). After this first legal bout, Apple ended its licensing program with Qualcomm, which has cost the telecommunications company billions of dollars in lost revenue. As a result of this suit by Apple, Qualcomm shares decreased by “19 percent … [while] Apple shares are up 36 percent this year” (King).
Qualcomm then fired back with a lawsuit of its own, which could potentially prove fatal to Apple, if the court finds it reasonable. Qualcomm disagrees with Apple’s claims stated above and cites that, “Apple employs technologies invented by Qualcomm without paying for them,” and as a result, they have filed lawsuits in China, which they intend to ban Apple from selling and manufacturing iPhones in that country (King). If the court finds that Apple is to blame and finds the ban a reasonable punishment, then Apple will lose a large sum of money because not only will their costs of making the products increase drastically, but also they will be unable to market and sell the product in China, which possesses the largest population in the world. In addition, “two-thirds of Apple’s revenue” is derived from China and because this suit became public, Apple has already seen some of the effects (King). Its shares “gave up some gains from earlier on Friday,” so if this lawsuit continues in favor of Qualcomm, Apple may see a continued decrease in their stocks (King).
The lawsuit against Apple is of patent infringement; however, there are multiple parts as to this particular patent infringement case. Qualcomm’s lawsuit is based on “three non-standard essential patents,” which covers “power management and a touch-screen technology called Force Touch that Apple uses in [its] current iPhones” (King). Apple uses the technology of Qualcomm to better its products and increase their profits; however, as per Qualcomm, Apple does not pay them for the use of their technology. Obviously, there are many different viewpoints of this story: one from Apple and one from Qualcomm. The courts will expose the truth and the financial ramifications will certainly be grave at the expense of one company’s finances.
Aliasger is a finance major at the Stillman School of Business, Seton Hall University, Class of 2020.
Posted by Stanley Bukowski.
On August 6, 1991 was when the internet, also known as the “World Wide Web”, became available to the public. At that time, cyber-attacks ever occurring, never crossed anyone’s mind. Since the launch of the World Wide Web, cyber-attacks and IT threats continue to significantly grow each year. Even though they are known to be threats to business/organizations/firms/universities, they are most importantly a threat to individuals themselves. Even though business/organizations/firms/universities may lose financial resources from cyber- attacks, individuals lose their sense of total personal privacy. Personal Privacy is a concept that is cherished and treasured for four main reasons (Brey). The first reason is that privacy must be well-adjusted to national security and public order. Secondly, it is known to be a condition that is necessary for autonomy, which allows individuals to develop their own personality through personal experiences. Thirdly, privacy is known to be a safeguard to us which shields them from external threats of exclusion and/or blackmail. Lastly, it can also provide social value as well.
In the field of computer security, one will see that it is the process of being able to counteract and detect illegal usage of a computer. Computer security deals with having the ability to act as a safeguard by fighting off cybercriminals/identity thieves that are trying to get a hold of our personal resources that we have stored on our computers. Basically, the main goal for computer security professionals is to provide the protection that is needed for the valuable information and resources that are stored on our computers. The two types of computer security systems that exist are: System Security, which protects the software and hardware of a computer from mischievous programs and Information Security, which protects three different types of data such as availability, confidentiality, and integrity (Brey).
On June 11, 2017 the University of Virginia was silently blind-sided with a cyber-attack from China, where several attackers that operated together to successfully wire transfer $996,000 to what was first an unknown, untraceable location. This attack was successful due to the fact that there was a breach of information that leaked out information that the University of Virginia was upgrading their security system and also due to the fact that the thieves stole a computer from the university that belonged to the comptroller (U.VA). Once the thieves had a hold of this information and the computer, they implanted a virus into the university’s entire IT system, which allowed them to gain access to the University’s accounts at BB&T Bank. When the virus ultimately completed the job that it was created for, they were able to steal the universities online banking credentials, commencing them to successfully complete a single wire transfer to the Agricultural Bank of China.
To most people, this would set off a red flag, especially since it was a wire transfer from a United States university to a random, unheard of bank located in China. Not only should that have been a red flag, but a red flag should also have gone off seeing that the University of Virginia had no prior records in their transfer history to wire transfer money to the bank in China. Regardless of the fact that most universities in America purchase their school supplies from across seas, they tend to always use reputable banks, where they have several prior transactions in their transfer history. Even though there is a good chance that the university may retain most of its lost, they will not receive the entire amount that was stolen.
Believe it or not, most thieves today are known to be what we call “cyber hackers.” Thieves that commit these types of crimes are the individuals, co-workers, friends, family members that you would least likely expect to commit such a crime. Before we continue any further, the next four descriptions that are listed below, are the characteristics that management of business/organizations/firms/universities should look for when trying to identify a thief (Singleton).:
- Reputable CharacterStudies show that you will never find a thief that disrupts the regular flow that happens daily at the working environment that they are a part of. These types of thieves will have the type of reputation at work where nothing ever seems to bother them. They will never portray or converse towards others or with others dishonest behavior and will never discuss their own personal financial issues. By doing so, management will never be suspicious that they would or ever think of stealing from the company.
- Collaborate with AdministrationYou will find thieves to always be individuals that continually help their co-workers out with projects. The only plot twist is–they will only help them to the point where they will not be exposed to information that management could possibly use against them. Thieves use reverse psychology and have a relaxed personality when dealing with auditors. They tend to put on a poker face and give auditors everything they need in order for the auditors to be able to complete their jobs. Thieves believe in the fact that if they behave like they have nothing to hide, auditors/management will never become suspicious of them.
- Work-a-holicsTaking a vacation from work will lead thieves down a one-way road, known as jail. If a thief were to take a vacation and the IRS/Auditor just happened to start an investigation while they were gone, will red flag them as the first source of why financial resources are missing. By not taking a vacation while the IRS/Auditor are conducting their investigation, there is a slimmer chance of the IRS/Auditor blaming them.
- Norm: SecrecyThieves know that to successfully commit corporate fraud, they need to follow the norm of secrecy. Thieves know not tell anyone within or outside the company about the future corporate fraud they are about to commit. The percentages of successfully completing corporate fraud diminish the more individuals that the thief would inform. No matter if it is their best friend, wife, brother, etc., thieves know that to successfully complete the operation, they must act as an assassin, working silently alone.
I believe that business/organizations/firms/universities that implement Biometrics Security Systems will not completely bring cyber-attacks to an end, but it will certainly decrease them to the bare minimum because it is a form of access control. Biometric Security Systems are known to be as a technique of entry in which users/individuals are recognized based on their physical individualities, personal/behavioral/biological features. Having a wide variety of alternatives to choose from, business/organizations/firms/universities have a large selection pool that they may elect from to incorporate a the type of biometrics of their choice. For example, fingerprint, retinal, & palm scanners and face recognition are just a few of the types of biometrics available. Fingerprints are now being used as access controls for smartphones because in order to unlock their phone with their fingerprint, the fingerprint must be equivalent to the fingerprint that was previously stored on the smartphones system. This prevents thieves from getting their hands on private information that is on the device. The same exact notion can be applied to the corporate world. (Lombard0).
Information of the advancement of Biometrics is spreading amongst many individuals today and is becoming more of a topic of discussion due to its popularity due to it replacing passwords with login credentials. The most recent examples of biometrics security systems is now used when individuals take the GMATS. Before entering to take the standardized test, the proctor uses a palm vein reader upon entry to ensure that the exam is not being taken by a random individual and that it is being taken by individual who signed up for the standardized test.
Years ago it would cost a business/organizations/firms/universities tens of thousands of dollars to implement such a finger print scanner into their building but today it only costs about $200 dollars to have a finger print scanner implemented into a desktop, $2,200 for a retinal scanner to be implemented at limited access doors, and $250 for a palm scanner for each room for an employee to enter their office. For example, if the company has 5,000 employees:
A. 5,000 employees * $200 finger print scanner laptop = $1,000,000 B. 5,000 employees *$250 palm scanner entrance to office room = $1,250,000 C. 5 retinal scanners * $2,200 enter limited access door = $11,000 D. 10,005 Installment fee for Scanners *$300 (avg of all three) = $3,001,500
E. Yearly Maintenance of all three Biometric Units = $25,000
Posted by Paul Della Vecchia.
The recent Bloomberg article “Wal-Mart Balks at Paying $600-Million-Plus in Bribery Case” written by Tom Schoenberg and Matt Robinson, depicts a long standing bribery case Wal-Mart participated in. The article is dated October 6th, 2016. Wal-Mart is said to have been paying foreign officials in Mexico, India, and China. They did this to take a fast track into getting into those countries. A fast track is speeding up the process to start a business in a country, and it allows them to get their business permits. Wal-Mart reported sales of $482 billion, and $14 billion in profits. In this case alone, “Wal-Mart has already spent $791 million on legal fees and an internal investigation into the alleged payments and to revamp its compliance systems around the world, it said” (Schoenberg and Robinson). These legal fees are starting to add up as the investigation goes longer, but Wal-Mart is not looking to settle. To settle the case, it would be $600 million.
Bribing foreign officials is illegal under the 1977’s Foreign Corrupt Practices Act. Wal-Mart tried to outsmart the system by “Calculating a fine based only on the amount of the alleged bribes, as the department has done in some cases, would yield a lower penalty, they said” (Schoenberg and Robinson). Companies are in the business of making money, and Wal-Mart looked at the pros and cons of this bribery. They believed that they would be able to actually make a profit off breaking the law, and to do that they ran calculations to see whether the fine would outweigh the benefit. Clearly it did not, because they were able to bribe their way to the top, and open more foreign companies. The case is so long standing, because the evidence the officials have is outdated. To work around this, the investigators are trying to look to more recent allocations of bribery from Wal-Mart in Brazil. As each day goes by, evidence becomes more outdated and less reliable. In 2011, “Wal-Mart disclosed possible violations in Mexico to the justice Department and SEC” (Schoenberg and Robinson). There wasn’t much done at the time, and now we fast forward to 2016 and that 5 year old evidence is not looking as clear. So the investigators are beginning to look elsewhere to try and solve this problem. The article also makes reference to attempts to find bribes in China, but to no avail.
Wal-Mart is looking to fight this case, because they are unsure what the criminal charges against them would be. If they decide to settle, the settlement “would rank among the highest levied under 1977’s Foreign Corrupt Practices Act” (Schoenberg and Robinson). The article relates the Wal-Mart case to the similar VimpelCom Ltd. and Siemens AG case. Both cases deal with bribing foreign officers to win business, and both settlements were higher than Wal-Mart. Judging the case off precedent and the increasing costs of legal fees, settlement should be a viable option for Wal-Mart. A company making $14 billion in profits should be able to sponge any damages done by their illegal acts. Wal-Mart does not want to settle, because they are unaware how it would affect their company. The timing is just not right at the moment to be spending the settlement costs, the article alludes to. “Wal-Mart said Thursday that net income for the year through January 2018 will be “relatively flat” as the company invests in its website and mobile app” (Schoenberg and Robinson). So if they have the option to clear their name and spend a little extra money or settle and have their brand slightly tarnished, they are going to fight for now. This way they are able to compete with Amazon in their work on their mobile app and website for online shopping.
Paul is an graduate accounting student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2017.
Posted by Enerd Pani.
During the beginning of October, there was a vast change where control of the internet source code was transported from the United States, to what most likely will be the United Nations. The result is that countries not only in Europe, but all over the world can vie for control of the internet. Arguably unscrupulous countries such as Russia, China and Iran can cause issues with human rights violations and can censor areas of the internet in other countries, not only within their own home country. The second issue is that the President did not ask Congress for approval to give a piece of U.S property to overseas forces. The following action has been criticized as going against US interests, and mitigating any form of American supremacy.
Still, some people see this as a necessary step. The National Telecommunications and Information Administration believes the chance of government intrusion to be “extremely remote” (BBC). The issue arises when multiple shareholders with many different ideas on how the internet should be maintained all vie for control of singular entity. These “stakeholders include countries, businesses and groups offering technological expertise” (BBC). One might wonder how such a important function can be put within the control of so many groups with different interests. There has even been calls by Russia and China for the Domain Naming Server to be put under the control “by the United Nations’ International Telecommunication Union” (BBC). The request put forward shows the desires countries with very shady human rights have towards getting control of such a important tool for free speech.
Many groups had argued that a delay on the acquisition should have been placed. The critics of the movement “argue that once the transition takes place it is irreversible, and that it would be prudent to temporarily maintain existing U.S. government authority” (fas 18). It would seem very controversial to transfer over such a valuable asset when there may not be any chance to change a decision. Also questions arise on how the “.mil” and “.gov” domains should be handled. These domains are sole property of the U.S Government, and cannot be used in any other way.
To conclude, the “giveaway” of ICANN is one shrouded in uncertainty. No one can be sure if the new stakeholders of the internet will continue to monitor it ethically. There has been major concern about some countries abusing the power of internet control, but many companies like the NTIA assure that they are looking to “protect U.S consumers, companies, and intellectual properties” (fas 12). It can be argued that ICANN was transferred unethically, though now the deed is done. The future will tell if this move will either effect, or mitigate personal freedoms on the internet.
Enerd is a finance major at the Stillman School of Business, Seton Hall University, Class of 2019.
Posted by Melissa Nomani.
Lawsuits filed against Lumber Liquidators claim that homeowners who put certain laminate flooring into their home are being exposed to high levels of formaldehyde. This puts them at risk and also lowers the value of their property. As of this July, the number of lawsuits filed against the company has gone up from only a mere ten in June. Many lawsuits began being filed after a 60 Minutes episode that aired on March 1, 2015, exposing the high levels of formaldehyde in laminated flooring made in China. Formaldehyde is a known carcinogen and has been linked to cancer and respiratory problems. A study done by 60 Minutes showed that 30 out of 31 of the tested flooring samples (all of the sample were Lumber Liquidators products).
According to a study conducted by 60 Minutes, 30 of 31 flooring samples from Lumber Liquidators did not meet formaldehyde emissions standards. It is estimated that thousands of people have Lumber Liquidators flooring in their homes. Some lawsuits claim that homeowners have suffered from respiratory problems after installing the laminate flooring.
Another issue that has risen is that Lumber Liquidators is being accused of false advertising and selling products comprised of particles that come from endangered habitats and trees. The US Department of Justice is investigating the company for their alleged use of wood. The wood was illegally cut down from Russia–this directly violates the Lacey Act. The Lacey Act does not allow for the importation of products made from woods that are illegally logged.
Furthermore, this past May, Lumber Liquidators CEO, Robert Lynch, resigned. During this month the company also announced that it would be suspending the sale of flooring from China. The company offered homeowners free indoor air quality screening, if they had purchased laminate flooring from China.
The number of lawsuits against Lumber Liquidators continues to grow.
Melissa is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Melissa Nomani.
Farmers across the United States are filing suits against Syngenta. As stated in the article, “The lawsuits allege the biotechnology company’s genetically modified Agrisure Viptera and Duracade seeds contaminated US corn shipments, making them unacceptable for export to China.” China does not allow the importation of GMO products that it has not tested. In February of 2014, China learned that the corn shipments from the U.S. contained Viptera. Agrisure Viptera is a seed that is genetically modified (known as MIR162) to prevent damage to crops by earworms and cutworms. As a result, China has rejected corn imports from the U.S.
Over 1,800 suits have been filed. Lawsuits filed against Syngenta state that the company put seeds on the market even though there was no approval from foreign markets. This has led to some farms having great financial losses. Even farmers who do not use GMO seeds could be affected due to accidental contamination from other fields. Syngenta has tried to refute the lawsuits by stating that they are not responsible for protecting farmers from GMO seeds. This arguments were rejected in September by Judge Lungstrum, who refused to dismiss the suits.
It has been estimated by The National Grain and Feed Association that as of April 2014 almost $3.0 billion worth of losses were caused by Syngenta’s Agrisure Viptera MIT162 corn seed.
The first of the lawsuits are expected to go to trial in June 2017.
Melissa is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.
Posted by Philip D Lacki.
‘The lid popped off”? How does a lid pop off without someone doing something to cause it to pop off? Just like the Liebeck v McDonald’s case, I find this case involving someone suing Starbucks for a faulty lid to be morally wrong in the sense of business law. “The stress activated [the plaintiff’s] Crohn’s disease, and as a result, he lost part of his intestine. He claims damages of $50,000. His wife also sued for loss of companionship.”
The eggshell skull rule is a well-established legal doctrine used in some tort law systems. It means that saying the injured person is frail is not a defense in a tort case.
In class, we discussed the McDonalds case and looked into the case. When do ends justify the means? In my discussion post about the video, we watched the video about the case and talked about how one may use bad or immoral methods as long as you accomplish something good by using them. (Not everyone agrees with this idea). The man suing Starbucks for $50,000 used immoral methods to accomplish something bad.
In class, we also discussed the Gucci case where a person in China was selling counterfeit Gucci products and selling them online. Gucci, who realized what was happening, notified the person in China without getting a response. The man in China was using immoral methods to accomplish something bad, and though it might be a bit extreme to compare, you can see how these two cases have similarities in both business and legal aspects.
Philip is a public relations major with a minor is business administration at Seton Hall University, Class of 2017.
Posted by Yuanda Xu.
In 2003, Lucent Technologies decided to fire the CEO, COO, Financial Executive and marketing manager in China. Lucent did this because company in China bribed the Chinese officials to get more benefits. As expected, Lucent fired these four people, and paid $2.5 million to settle charges. The company paid a $1 million fine to the Justice Department and $1.5 million to the Securities and Exchange Commission.
In 1977, America enacted the “Foreign Corrupt Practices Act” to prohibit companies from bribing officials in other countries to get more benefits. What Lucent Technologies did violate the Act, because Lucent Technologies bribed the Chinese officials to get more benefits and reduced business opportunities for other companies. That violates the FCPA.
Yuanda is a business management major at Montclair State University, Class of 2017.