The Supreme Court issued an order denying an application to vacate the Fifth Circuit’s stay of a district court’s final judgment enjoining the enforcement of a Texas voting statute. The statute requires voters to produce identification before they vote. Business law students learn about injunctions (in this case, the court’s power to stop a party from acting) as a equitable remedy.

Congressman Marc Veasey, D-Fort Worth, sued Governor Perry and Texas Secretary of State John Steen in federal court, challenging the enforcement of the voter ID law, named SB 14. Veasey claimed that the law had the potential of preventing hundreds of thousands of people from voting. The strict Texas statute “requires the state’s estimated 13.6 million registered voters to show one of seven kinds of photo identification” before casting their ballot. Defendants responded SB 14 was designed to prevent voter fraud and argued voter ID laws were already approved by the Supreme Court in an Indiana case.

After a hearing, the district court agreed with Veasey that enforcement of the law “may prevent more than 600,000 registered Texas voters (about 4.5% of all registered voters) from voting in person for lack of compliant identification.” The district court determined the strict Texas statute was unconstitutional and enjoined defendants from forcing voters to produce ID. The Fifth Circuit issued a stay of the order, meaning defendants were temporarily permitted to enforce the law. The Supreme Court denied Veasey’s application to vacate the stay pending appeal. Led by Justice Ginsberg, three Justices wrote a scathing dissent (and in a rare circumstance, later corrected) expressing disagreement with the court’s decision not to vacate the stay.

Voting rights are analyzed under strict scrutiny. As of now, voters in Texas must show proper ID before they are allowed to vote in the midterm elections on November 4th.

IKEA, the popular low-cost furniture manufacturer, recalled 27 million “Malm” dressers.   Three children were recently killed as a result of the defect in design.

The company was on notice of the tendency of the furniture to be top-heavy, but did nothing to address the issue until the death of a 22-month-old child earlier this year.  In addition to the recall, the company offered to send crews to people’s homes to tether the dresser to the wall.

“On average, one child dies every two weeks from falling TVs or furniture. At least six deaths have been connected to Ikea’s Malm dresser.”

Posted by Elizabeth Win.

Dollar bills might as well be worth as much as computer paper now. Cryptocurrency has been on the hot seat for the past few months because of its financially growing nature and easy accessibility. Now, as we are starting to see a slow downfall of people investing in Bitcoin; the I.R.S. is starting to detect serious problems with the millennial choice of currency. One of their main concerns is that this cryptocurrency fad has created another giant, financial bubble. If this bubble were to burst, this Bitcoin “bust” could wipe out millions of spectators leading to a huge loss in tax revenue.

A main contender to this potentially huge loss is Bitcoin’s anonymity. For those unaware, Bitcoin’s underlying technology, blockchain, thrives on anonymity. When a person makes a transaction, the transaction only links through an electronic address, making blockchain more attractive to buyers. Now, the I.R.S. has many problems with this missing identification of creative transactions. The anonymity fuels the underground economy, a significant factor in the source of lost tax revenue. Most of the underground economy is conducted through cash transitions; however, what the I.R.S. fears is that cash will slowly transition to cryptocurrencies because of its convenience. An anonymous buyer of bitcoin can easily pay fewer taxes by cheating the cryptocurrency system – also known as major tax evasion. The solution? The government might have to accept the hardships of directly taxing cryptocurrencies and raise tax rates in order to offset the loss of revenue. Understand that the public would highly disagree with this solution, they generated a smarter response: a switch from taxing income when it is received to taxing income when it is spent. Although this switch would require a “major overhaul of the tax code,” many economists support this decision and believe it is future of the economy.

On the contrary, the I.R.S. understands cryptocurrencies offer major reductions in the cost of financial transactions, making it very appealing to the lower classes. There would also be less reliance on banks, which would increase the power of the Federal Reserve to control money. However, the opportunities are too great for tax evasion and illegal operations that the I.R.S. cannot continue to allow it. Although the cryptocurrency economy is growing steadily, it will need to find a way to prevent tax evasion while preserving anonymity in order for it to survive and stay attractive to buyers. For cryptocurrencies to be successful, societies will have to learn to trust the government, a very difficult task for many to grasp. With the rise of extremely advanced technology, it is inevitable that the economy will eventually transition to the cryptocurrency movement. Figuring out how to smoothly transition from worthless green pieces of paper to slick, glassy pieces of technology worth thousands of dollars each, the challenge to adjust will be difficult by eventually necessary.

Elizabeth is a marketing and information technology major in the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Brandon Bartkiewicz.

It has been almost two years since the Wells Fargo scandal broke into the headlines. It is not out of the ordinary to see a bank involved in shady activities; just look at the recession. However, in 2016, Wells Fargo committed a truly unforgivable crime, identity theft and fraud on a massive scale. To refresh, Wells Fargo had “… secretly opened millions of deposit and credit card accounts that may not have been authorized by customers, and that ultimately harmed those who had entrusted their financial affairs with the bank”. The goal of this was to create an illusion of more “sales” (accounts being opened). They did this by transferring money between accounts without permission of the accountholder. These activities were highly encouraged by an incentive system in place that would reward employees for opening accounts. Everyone was in on this; bank managers pressured their employees, and the executive board of Wells Fargo knew this was going on and did not stop it. By August 2017, the investigation found that as many as 3.5 million unauthorized accounts existed in Wells Fargo’s records.

The news of this wide scale fraud fueled a settlement with the U.S. Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and Los Angeles legal officials, totaling $185 million in penalties. Along with this, Wells Fargo would give “… $80 million in refunds — $64 million in cash and $16 million in account adjustments — to more than 570,000 auto loan customers who were charged for auto insurance without their knowledge.” As it should be, the bank is now in financial trouble as it tries to cover all of the direct and indirect costs relating to the scandal. However, the Janet Yellen and the Federal Reserve is not done disciplining the bank. Due to their “widespread customer abuses and compliance breakdowns,” the bank is now restricted from growing any more than its total asset size in 2017.  Along with this, the bank will remove some of the senior ranking executives in the company.  This is done to ensure that Wells Fargo will have sound business practices before it can grow again.

Personally, I believe that punishments handed down by the Federal Reserve were suitable for Wells Fargo. It provides a clear message to all banks that business malpractice is unacceptable and will be punished by harsh penalties. No bank should be able to get away with using client money and creating unauthorized accounts for personal gain. I wish the American legal system were stricter with companies so it would deviate them from doing illegal acts like this in the first place. What I did not like about this case was the fact that there are still plenty of people who have been long time officials of the company and are still employed by Wells Fargo. If you keep many of the same old pieces in place at a company, something like this is bound to happen again.

Brandon is a finance major in the Stillman School of Business, Seton Hall University, Class of 2020.

Source:

Link: https://www.usatoday.com/story/money/2018/02/02/fed-limits-wells-fargos-growth-citing-consumer-abuses/302973002/

Posted by Alex Coyle.

This article is about U.S. regulators monitoring the oversight of bitcoin and other types of “cryptocurrency.” Regulators want more regulation for this kind of trade, due to the fact that “cryptocurrency trading has outgrown the state-based regulation that covers many platforms.” The goal is to create better laws to further protect anyone purchasing bonds and stocks in cryptocurrency form. In order for this to happen, the Securities and Exchange Commission might need some legislation help from the Treasury and the Federal Reserve.

The SEC Chairman, Jay Clayton, is mainly concerned with the lack of regulation, due to the fact that the “ability to manipulate the prices goes up significantly.” With prices for this type of currency being able to change so quickly, it is not fair to future investors. Many scandals have occurred in the past with other investments, and in order for this to stop, this market has to be carefully regulated.

I do not know a lot about Bitcoin and cryptocurrency, but I agree with the information in this article. It seems like cryptocurrency is an easy target for corruption, and innocent investors could get financially hurt from it. If I was investing in any type of market, I would want to be sure my money is protected and not just getting taken from me. I believe that the agencies should take care of this problem before it becomes worse.

Alex is an economics major at the Stillman School of Business, Seton Hall University, Class of 2018.

Source:

https://www.wsj.com/articles/patchy-bitcoin-oversight-poses-hazards-for-investors-regulators-say-1517913001

Business law students study the corporate entity and learn from the beginning that since corporations are legal persons they can be charged with crimes.  Corporations cannot be imprisoned, because they have no physical body, but they certainly can face monetary penalties. Such was the recent fate of Credit Suisse.

Credit Suisse pled guilty to one count of “intentionally and knowingly” helping many U.S. clients prepare “false” tax returns.  For decades, Credit Suisse bankers fabricated “sham entities” to help hide the identities of U.S. clients who did not claim the Swiss accounts on their tax returns. They also failed to maintain records related to those accounts, destroyed documents sought by the U.S. government, and helped U.S. clients draw money from those accounts in ways that would not raise a red flag to the IRS. Out of the $2.6 billion, $1.8 went to the Treasury Department, $100 million to the Federal Reserve, and $715 million to the New York State Department of Financial Service.

The monetary penalty is the only punishment levied on the bank, as government officials feared anything further, such as ceasing operations, would have had a detrimental effect on the global economy. Moreover, top bank officials who were involved in the scheme will keep their jobs, even though there were calls for them to resign by their own statesmen.

Reportedly, the Department of Justice is looking to bringing charges against France-based BNP Paribas for similar offenses. But without some officer or director accountability, there will be no deterrence.

Posted by Abdullah Almohammadi.

51-year-old Steven Croman is a landlord with more than 141 apartment buildings in Manhattan. In 2016, was arrested for the allegations of obtaining loans fraudulently and committing tax fraud. Croman pleaded guilty for giving false business records, grand larceny, and criminal tax fraud. He was sentenced to one year jail and a five million fine.

The case came from the investigation of the allegations that Mr. Croman was harassing his tenants. He was alleged that he pushed rent-regulated out of their apartments. He also withheld the state payroll taxes to earn a bonus for forcing the rent-regulated tenants.

He was taken to court on Tuesday but declined to address the court. Justice Jill made a judgment stating that he was given time in jail to think about the people he has harmed. As he left the court in handcuffs heading to prison, an elderly tenant, Carol, stated that his apartment was in bad condition since Mr. Croman had refused to clean the apartment. Another elderly tenant by the name Cynthia suggested that the public ought to be protected from such a person as Croman forever. This indicated that Mr. Croman should have life jail term. On the other hand, Mr. Croman lawyer believes that Mr. Croman will behave appropriately in jail which will make him be released after eight months instead of one year.

Abdullah is a graduate accounting student at the Feliciano School of Business, Montclair State University.

Source:

http://www.foxbusiness.com/features/2017/10/03/nyc-landlord-sentenced-to-year-in-fraud-case.html

Posted by Muhammad Azeem.

Playing the role of a forensic accountant can be a fundamental one as it will influence various individuals whether in a business valuation or in a fraudulence sense. This article talks about how forensic accountant can play an indispensable part in perceiving issues and working up new tradition proceeding, irrespective of facing issues during the trial.

When in doubt, forensic accountants will join money related and legal capacities in choosing the proximity of a wrongdoing. Also, they can use their skills and expertise in recognizing those factors that should be considered in a business valuation. The arranging of using a forensic accountant could in like manner ask for quick and excellent results that oblige relationship with existing clients.

Whether it is for the inspirations driving business valuation or diverse examination of data, an accountant can be a fundamental part in recognizing issues. Observation is one of the biggest issues that forensic accountants face. If you are estimating a business or attempting to choose something that requires examination of a huge amount of data, an expert accountant might be the individual you require at the end.

Muhammad is an undergraduate student in accounting at the Feliciano School of Business, Montclair State University.

Article Link: http://ezinearticles.com/?What-Are-the-Biggest-Issues-Facing-Forensic-Accountants&id=9240899

Posted by Abdullah Aldahmash.

As the article begins, “to survive in this age of austerity and fraud,” there is a requirement for a more quick-witted and more refined arrangement of accountants, prepared to offer experiences and answers for all methods of business. This incorporates not just representing legitimate direct of business and reinforcing inbuilt process controls, yet in addition techniques for the discovery and avoidance of extortion and unfortunate behavior. In the beginning of the financial downturn, the accounting profession had experienced radical changes because of accounting catastrophes, e.g. Enron and WorldCom. Forensic accounting is an integration of accounting, auditing, and investigative skills. There is interest for it as general society is compelled to manage financial downfalls, and an ascent in desk violations and misquotation of money related data. Financial misstatement is one of the highest constituents of fraud today. It is the “deliberate misrepresentation of the financial condition of an enterprise, accomplished through purposeful misstatement or oversight of amounts or disclosures in the financial statements to fool users.”

According to the article, corruption, asset misappropriation, and fraudulent financial statements are the main reasons for the financial misstatement. Corruption includes fraudulent situations in the nature of conflict of interest, bribery, illegal gratuities and “economic extortion.” Asset misappropriation includes “skimming and larceny of cash, fraudulent billing, payroll and reimbursements, and misuse and larceny of assets.” Finally, fraudulent financial statements includes inappropriate representation of liabilities and expenses, inappropriate disclosures in financial statements, inappropriate valuation of assets and inventory, inappropriate realisation of revenue, and “timing differences.”

To prevent fraud in the future, a forensic accountant should keep in mind many key rules that absolutely will help them to be more efficient regarding handling the fraud. These keys are:

Improper composition of the Board of Directors or Audit Committee; improper oversight or other neglectful behavior by the Board of Directors or audit committee; weak or non-existent internal controls or process controls, including an ineffective internal audit function and improper conduct of external audits; unusual  or extensively complex transactions; financial  statements requiring significant subjective judgment by the management; rapid growth or unusual profitability, especially when compared with industry peers; recurring negative cash flows or inability to generate positive cash flows; significantly high transactions with related entities not in the ordinary course of business; inappropriate disclosure of related-party transactions; uncommon changes in the relationship between fixed assets and depreciation; uncommon increase in gross margin or profitability compared with industry peers; immoral standards: recurring  attempts by the management to justify marginal or inappropriate accounting on the basis of materiality; sophisticated organisation structure involving uncommon legal entities or managerial lines of authority; central administration; significant operations in places considered tax havens, with no clear business justification.

Abdullah is a graduate accounting student at the Feliciano School of Business, Montclair State University, Class of 2017.

References:

Anand, D. Elementary, my dear retail investor. The Hindu BussinessLine. Retrieved from: –

http://www.thehindubusinessline.com/news/education/elementary-my-dear-retail-investor/article4960231.ece

Posted by Chelsea Macchione.

Earlier this year in Beverly Massachusetts, Nick’s Roast Beef, a family owned sandwich shop, was found guilty to tax evasion during the years of operation, 2009 to 2013. The sandwich shop, at this time, was an all-cash business and would understate their income by splitting up excess cash between the two owners, Nichols Kaudanis and Nicholas Markos. By understating their income, Nicks Roast Beef got away with paying taxes on not even half of their actual income during those 5 years. The company found a way to manipulate their receipts so that it reflected only the cash that had been reported on and not any of the other cash that was earned and distributed to the partners. Between the years of 2009 to 2013 the investigating auditors claim the company got away with not paying around $1,000,000 dollars in taxes.

Tax evasion can happen within any type of business. If there is a way to manipulate income, there is a company out there is doing it to try to get away with paying fewer taxes for one reason or another. In this example, it was very easy for the business to get away with type of fraud because at the time they were strictly cash based. Cash is hard to audit and keep track of within a business, like the sandwich shop, because the only form of evidence there is are receipts from cash register transactions or customers. It is not difficult in a situation like this to either not record cash collected or generate fake receipts to report. Nicks Roast Beef took full advantage of this type of fraud and then suffered the consequences of jail time served by all of the owners and parties involved within the sandwich shop.

In my opinion, this type of fraud is probably existent within many different types of businesses due to similar circumstances in this case. Cash plays a huge factor with understating income because, like stated before, its very hard to keep track of it. Any type of business that can get away with cash transactions for goods or services that are usually paid for on account, can easily get away with not reporting it with no questions asked. Nicks Roast Beef was also a family operated business, which is sometimes what fuels fraud to occur within a business, having trust in everyone involved to not report the illegal activity. In circumstances like this, I believe it will always be a challenge as an auditor to know if the business is stating their cash income correctly. More evidence and questioning should be exercised in cases where family owned businesses are in charge of reporting their income and more of a consistent monitoring of the business finances should be put into place.

Chelsea is a MS accounting student at the Feliciano School of Business, Montclair State University. 

Posted Layla Alzahrani.

Embezzlement is money stolen by an unethical person. According to the article, 40 percent of small businesses in the United States will be targeted for average loss of $ 140,000,00.00, but embezzlement is only reported two percent of the time. Most of the embezzlers are trusted and long-term employees or family friends, or relatives. Victims’ trust usually is shattered after embezzlement happened, especially if embezzlers are their friends or relatives. According to forensic psychologists, victims have lack of judgment to discover the perpetrators before embezzlement happens.

It is difficult to discover employees who follow no pattern and offer no outward signs. Embezzlement sometimes is committed by people who do not have previous criminal records and and may have reputations beyond reproach. There are warning signs, however, that can show as evidence of employees’ behavior before the theft is uncovered, such as: enthusiastic employees who ask questions about business processes and procedures; employees who have excessive debt because of divorce or drug abuse; and employees who refuse to take time of their job, and who want to work when no one is around. Usually embezzlers have a hostile attitude if they get questioned about financial transaction.

Moreover, there are three factors must be present before a person can commit fraud; they are need, opportunity, and rationalization. Some examples of need are addiction to drugs, alcohol, and gambling. Rationalization appears when an employee believes that his/her illegal action fits within a personal code of conduct or ethic, which means that an embezzler steals because they see that as situational fraud. However, embezzlement can be discovered if accountants find amounts of expenses that are not consistent with historical norms or budget, documents are missing or incomplete, problems of bank reconciliations, and documents are adjusted without adequate support.

Preventing embezzlement can be difficult because there is no sure-fire method that can prevent it. Some examples that make it difficult to prevent fraud are issuing fictitious checks, invoking products that a company does not need it, issuing cashing checks for return products that not actually returned, forging checks and destroying them, and charging patients more than a duplicate invoice. There are some precautions that clients can take to prevent fraud such as doing an extensive background check before hiring an employee, tracking a person’s checks and verifying them, making bank deposits nightly, reconciling the bank and credit card statements, and requiring vacations. Those handing funds must be closely and routinely monitored in a company to insure that all profit within the practice and not in someone’s pocket.

Layla is a graduate accounting student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University.

Source:

Tranyor, Robert M. (2016) Embezzlement Could it Really Happen to You?, Audiology Today, Vol. 28. No. 4.

Posted by Nick Farkas.

A McDonald’s’ franchise in California has repeatedly gotten into legal trouble throughout the past few years because they were not paying and recording the overtime of their employees correctly. The Smith family owns the franchise and have around 800 employees working for them. They initially settled the claims for $700,000 but did not learn from their mistakes.

McDonald’s is not entirely liable because it is a specific franchise involved; however, they are going to pay the $1.75 million in damages and $2 million in legal fees to protect the brand. McDonald’s has also agreed to train the Smith family on the use of corporate software designed to ensure compliance with California’s distinctively strict employment laws.

This is not the end of McDonald’s’ lawsuits and it is certainly not the beginning. Earlier this month, a union-backed group filed sexual harassment complaints on behalf of workers. McDonald’s has to decide which cases are worth fighting, and which cases they should automatically plead guilty. These decisions are based on risk and image.

Nick is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by Navjoat Aulakh.

PepsiCo’s famous ‘healthy’ beverage line, Naked Juice, is being stripped down and exposed for it’s misleading marketing tactics.  The line of beverages features images of various fruits and vegetables, and claims to be ‘all natural’.  The CSPI (Center for Science in the Public Interest) has argued that “a single 15.2-ounce container (the smallest option) contains 61 grams of sugar, about 50% more sugar than a 12-ounce can of Pepsi”.  The American Heart Association’s suggested sugar intake is 37.5 grams a day, PepsiCo’s Naked Juice almost doubles this suggested amount.

Although the lawsuit is less than two months old, it is expected to make impact in due time.  CSPI is asking that the company be more transparent in the ingredients of the drink, and to compensate monetary damages to customers.  Although the compensation of damages is not likely, PepsiCo will most likely have to change it’s marketing tactics.  The CSPI has a strong history of exposing the misleading marketing of products, and has even caused changes in rival companies such as Coca-Cola.

Navjoat is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2019.

Posted by Johanna Ortiz.

An ex-executive Andrew Caspersen at New York investment bank was declared guilty to securities and wire fraud. He admitted defrauding investors of more than $38 million, and the judge gave him four years in prison because the defendant’s attorney asked him for leniency for gambling addiction.

Caspersen was a good worker. He graduated from Princeton University and Harvard Law School. Unfortunately, for his addictions, he defrauded investors’ money including his family and friends. “I lost their money” he said “I abused their friendship. I destroyed my family’s name” (news.findlaw.com).

He used to go to an organization which helped him with his alcohol and gambling addictions; however, he never finished his treatment. He always quit. His attorney used this as an excuse to let the judge know that he is not under control and he is unable to think or act as a normal person. The judge declared him with a very real gambling disorder and for that reason he gave him short-term prison sentence. He said to the judge that he learned from this and he is going to retake the treatment.

His defense attorney said his client was very ill with his addictions that he did not care about money, and he just wanted to play. At the end of the day, he lost over $100 million. He had hope that no matter how many times he lost, he would win and take the money back.

In my opinion, Caspersen acted without values, morals, and respect to investors. He knew his addictions and he was irresponsible and quit the treatments. All his irresponsibility were not investors’ fault and he had to pay for his mistakes.

Johanna is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by Rafaela Andrade.

Costco wholesale store is now using new Visa credit cards and no longer American Express after fifteen years.  Under a new contract, Citigroup, Inc. will now be the issuer for their credit cards along with Visa, Inc. Early this year, Costco reported that their earnings were not met and the stock price had dropped. The reason why the wholesale store left and would not renew the contract with American Express is due to economic reasons. When the news of this broke to the public, the “credit- card company’s stock fell 6.4%.”

Costco only accepted American Express for the past fifteen years. The wholesale store represented around $80 billion of their business and just on interest it was about $14 billion. This was clearly a major hit for American Express. AmEx is also limited in certain retail stores. It is said that even though AmEx offers great rewards it is costly for the merchants, costing the retailer about 3.5% where Visa and MasterCard have a cost around 2-3% or less. Costco members will have rewards and allowing them to use their new Visa cards where they are accepted.

American Express provided deals to the members such as 3% cash back on gas, 2% cash back on restaurants and even when traveling, 1% on Costco purchases and other purchases. Visa offers 4% cash back on gas, 3% cash back on restaurant and eligible travel purchases, 2% cash back on purchases from Costco, and 1% on all other purchases. This deal is great way to get extra cash and there is no annual fee for the credit card. Many Customers are happy with the results while others are not as happy. Costco had to do what is best for the company (enter a new contract) in order to keep generating business.

Rafaela is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Sources:

http://www.latimes.com/business/la-fi-costco-visa-20150302-story.html

http://www.marketwatch.com/story/5-things-to-know-about-the-costco-and-amex-breakup-2016-02-11

Posted by Francesca Mecionis.

The owners of America’s Test Kitchen filed a 39-page lawsuit against Christopher Kimball, and some of his other associates, on November 3. According to the suit, Kimball and his accomplices “conspired to literally and conceptually rip off” the Boston TV show. The reason for his actions were said to be for his personal benefit in order to help launch his new brand, Milk Street. There are accusations of “stolen customer lists and trade secrets, sneaky tactics to secure a radio deal, and new office space.” Kimball had a fiduciary responsibility to the show. However, the owners believed he had stolen their entire business model, “right down to how recipes are written,” and also had worked on his own project while still being employed by America’s Test Kitchen.

Kimball, in response to the suit, claims it is “absurd” and “was meant to generate publicity and to shore up the America’s Test Kitchen brand.” Yet, there is proof of his actions in writing. There was a forensic search of his emails, which showed “Kimball’s scrambling to set up his new business before he left the old one, securing copies of his work contacts and packing up his belongings.” In another email, Kimball wrote to his assistant, “Want to get ahead of the partners!” in regards to using the America’s Test Kitchen name to find a new office space for his business.

The lawsuit was issued in the Superior Court of Suffolk County of Massachusetts. The owners are hunting for “unspecified monetary damages, repayment of some of the compensation that America’s Test Kitchen paid Kimball and the people who left with him, and asks the court to prevent him and his new company “from exploiting information, assets and opportunities stolen from America’s Test Kitchen.” Lawyers are arguing that Kimball’s motivation to steal secrets from the show stemmed from when the board and investors pushed him out. In 2013, America’s Test Kitchen’s rating decreased dramatically, and the show responded by hiring a new set of employees. By 2015, a new CE whom outranked Kimball had taken over, and eventually he stopped showing up to work, telling his coworkers “he had been fired.” “Kimball, in an interview Wednesday, cautioned not to read too much into the allegations, saying most were false or twisted interpretations.” His legal team is preparing to go against these accusations, within this month. Hopefully, the truth will be revealed and both parties receive what they deserve.

Francesca is an accounting major at the Feliciano School of Business, Montclair State University.

Posted by Abier Mustafa.

Stryker Corp., a device maker company, recalled its Rejuvenate and ABG II hip implant devices in July 2012 after warning surgeons they could harm tissue around the hip and cause other health problems to its patients. Patients have complained of severe pain, unusual swelling and excessive metal debris in their blood, blaming all these symptoms on the Stryker devices. There are at least 1,800 cases Stryker consolidated before U.S. District Judge Donovan Frank in St. Paul, Minnesota. After facing more than 4,000 suits consolidated in the New Jersey state court and federal court in Minnesota alone, Stryker will pay a base amount of $300,000 per patient’s case. This settlement to patients who had the devices surgically removed prior to November 3^rd.

Stryker Corp. has reported more than $9 billion in revenue in 2013 on the advertisement of their hip implants lasting for years. After the devices failed patients within a short amount of time, the company has now agreed to pay more than $1 billion to resolve these lawsuits. However, “the company said that it set aside more than $1.4 billion to cover costs of handling cases over the recalled hips so the settlement fell into the “‘low end of the range of probable loss.’” “This settlement program provides patients compensation in a fair, timely and efficient manner,” Bill Huffnagle, a spokesman for Kalamazoo, Michigan-based Stryker, said in an e-mailed statement. A source also reveals that a majority of the payments will be made by the end of 2015.

Abier is a finance major at Montclair State University, Class of 2016.

Posted by Abier Mustafa.

Cell phone Company, AT&T, has agreed to pay back $105 million in what is being called ”the largest cramming settlement in history.” AT&T has been adding unauthorized charges to tens of thousands of customers’ monthly bills. The charges are usually for the amount of $9.99 per month, coming from third-party services, including trivia, horoscopes, and love tips.  ”AT&T is accused of keeping at least 35% of the fees, as well as obscuring the charges on bills and preventing customers from securing full refunds.”

There have been previous lawsuits against other cell phone providers besides AT&T.  For example, the Federal Trade Commission has filed a similar lawsuit against T-Mobile in the past also due to unethical charges to customers.  “For too long, consumers have been charged on their phone bills for things they did not buy,” Wheeler, the Federal Communications Commission chairman, said- “It’s estimated that 20 million consumers this year are caught in this kind of trap, costing hundreds of millions of dollars.”

AT&T has released a statement saying that they have provided customers with “Premium Short Messaging Services” in the past. However, they have discontinued third-party billing.  To resolve all claims, $80 million of the settlement has been set aside for customer refunds, along with $25 million in penalties due to regulators.

So if you’re an AT&T customer and have been wrongfully charged, you may be eligible for a refund!

Abier is a finance major at Montclair State University, Class of 2016.

Posted by Elizabeth Win.

Dollar bills might as well be worth as much as computer paper now. Cryptocurrency has been on the hot seat for the past few months because of its financially growing nature and easy accessibility. Now, as we are starting to see a slow downfall of people investing in Bitcoin; the I.R.S. is starting to detect serious problems with the millennial choice of currency. One of their main concerns is that this cryptocurrency fad has created another giant, financial bubble. If this bubble were to burst, this Bitcoin “bust” could wipe out millions of spectators leading to a huge loss in tax revenue.

A main contender to this potentially huge loss is Bitcoin’s anonymity. For those unaware, Bitcoin’s underlying technology, blockchain, thrives on anonymity. When a person makes a transaction, the transaction only links through an electronic address, making blockchain more attractive to buyers. Now, the I.R.S. has many problems with this missing identification of creative transactions. The anonymity fuels the underground economy, a significant factor in the source of lost tax revenue. Most of the underground economy is conducted through cash transitions; however, what the I.R.S. fears is that cash will slowly transition to cryptocurrencies because of its convenience. An anonymous buyer of bitcoin can easily pay fewer taxes by cheating the cryptocurrency system – also known as major tax evasion. The solution? The government might have to accept the hardships of directly taxing cryptocurrencies and raise tax rates in order to offset the loss of revenue. Understand that the public would highly disagree with this solution, they generated a smarter response: a switch from taxing income when it is received to taxing income when it is spent. Although this switch would require a “major overhaul of the tax code,” many economists support this decision and believe it is future of the economy.

On the contrary, the I.R.S. understands cryptocurrencies offer major reductions in the cost of financial transactions, making it very appealing to the lower classes. There would also be less reliance on banks, which would increase the power of the Federal Reserve to control money. However, the opportunities are too great for tax evasion and illegal operations that the I.R.S. cannot continue to allow it. Although the cryptocurrency economy is growing steadily, it will need to find a way to prevent tax evasion while preserving anonymity in order for it to survive and stay attractive to buyers. For cryptocurrencies to be successful, societies will have to learn to trust the government, a very difficult task for many to grasp. With the rise of extremely advanced technology, it is inevitable that the economy will eventually transition to the cryptocurrency movement. Figuring out how to smoothly transition from worthless green pieces of paper to slick, glassy pieces of technology worth thousands of dollars each, the challenge to adjust will be difficult by eventually necessary.

Elizabeth is a marketing and information technology major in the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Nicholas Lillig.

On October 20^th, a judge tossed out a $417 million jury award to a woman who claimed that she developed ovarian cancer by using Johnson & Johnson talcum-based powder for feminine hygiene. The lawsuit is continuing even after the woman, Eva Echeverria, has died. Her attorney released a statement saying, “We will continue to fight on behalf of all women who have been impacted by this dangerous product.” Under clear scrutiny for their product, Johnson & Johnson has most recently been hit with a multimillion-dollar jury verdict. Los Angeles County Superior Court Judge Maren Nelson granted the company’s request for a new trial, saying there were errors and jury misconduct in the previous trial that ended with the award two months ago.” She also ruled that there was not enough convincing evidence that Johnson & Johnson acted with malice and that the award for the damages was far too excessive. This was the fourth time that Johnson & Johnson had to go to court in order to address this matter.

The product, Johnson & Johnson’s Baby Powder, uses a talcum based powder in which is used to treat diaper rashes. It is commonly found in soap, antiperspirant, toothpaste, makeup and even bath bombs. Many people use this powder to fight inflammation on their skin or for personal hygiene. The reason as to why this company is brought under the microscope is to debate whether the talc based powder can cause ovarian cancer in women. There is evidence on both sides of the argument for how it can effectively cause ovarian cancer. A report that was released in May of 2016 determined that 63 percent of women with ovarian cancer had used talc. Another previous study reports, “In 1971, four OB/GYNs found talc particles in more than 75 percent of the ovarian tumors they investigated”. Scientific studies and the juries involved point to yes, this product is liable to cause ovarian cancer. Evidence against the case states that the exact relationship is unclear as tumors can develop regardless of whether talc is applied in the situation.

The issue is that for over 100 years, Johnson & Johnson has been marketing their baby powder to treat diaper rash and as a daily feminine hygiene product. In the most recent cases, juries are pointing towards the evidence that it does cause ovarian cancer. Eva Echeverria and her attorney believe Johnson & Johnson failed to warn the public about “talcum powders potential cancer risks”. A spokeswoman for J&J said, “Ovarian cancer is a devastating disease – but it is not caused by the cosmetic-grade talc we have used in Johnson’s Baby Powder for decades. The science is clear and we will continue to defend the safety of Johnson’s Baby Powder as we prepare for additional trials in the U.S.” The company has decided that it will continue to fight for their product in further trials.

Nicholas is a finance major at the Stillman School of Business, Seton Hall University, Class of 2020.

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The regulatory process and its role in the legal system is a fundamental concept in business law. Federal, state and local governments received the authority to regulate activities from Article 1 Section 8 of the U.S. Constitution. Article 1 Section 8 also referred to as the Commerce Clause or Necessary and Proper Clause dictates the enumerated powers of Congress in professional and private settings.

The regulatory process is performed by administrative agencies. Some commonly recognized administrative agencies are the Central Intelligence Agency (CIA), the Environmental Protection Agency (EPA), and the Food and Drug Administration (FDA). The recent GlaxoSmithKline bribery scandal focused on the Securities and Exchange Commission (SEC) administrative agency. The mission of the SEC is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” (Securities Exchange Commission)

The SEC recently alleged that GlaxoSmithKline’s Chinese subsidiary had engaged in bribery activity for four years, 2010 to 2013. The SEC accused GlaxoSmithKline subsidiary of violating the Foreign Corrupt Practices Act. According to the SEC, GlaxoSmithKline’s subsidiary had been providing foreign officials and health-care professionals with gifts incongruous to the law. These gifts included shopping trips, cash, travel, entertainment, etc. for the purpose of boosting sales. Further, the SEC suspected that GlaxoSmithKline’s subsidiary deceptively recorded these payments as expenses. The bribery scandal investigation eventually captured the attention of a second agency, the U.S. Department of Justice.

GlaxoSmithKline has not admitted nor denied these bribery charges, but has agreed to pay $20 million to settle the matter. Nonetheless, this is not GlaxoSmithKline’s first bribery settlement. In 2014, the company paid $491.5 million and several managers were convicted with charges and suspended imprisonment for a similar matter. Since the 2014 bribery controversy, GlaxoSmithKline stated it “installed several reforms, including shifts to the compensation of sales representatives and the end of payments to health-care practitioners for advocating for Glaxo products to other prescribers.” (Minaya)

My opinion on the matter is that GlaxoSmithKline was rightfully accused by the SEC and DOJ, specifically for violating the Foreign Corrupt Practices Act. The Act has a firm anti-bribery provision that GlaxoSmithKline and its Chinese subsidiary had a legal and ethical responsibility to follow. The fact that GlaxoSmithKline and its subsidiary’s records were not a true representation of its payments is a clear piece of evidence suspecting its violation. In addition, having read the SEC order and learned that GlaxoSmithKline had engaged in this activity before, I believe that the company and the subsidiary did participate in bribery.

Melissa is a marketing major with dual minors in public relations and legal studies at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Nicholas Rizzi.

Product liability cases are far from straight forward; recently the Sinclair v. Merck & Co., Inc., 195 N.J. 51 (2008) celebrated its ten year anniversary.  Within this complex case, the court misinterpreted the product liability statute, in which it “decided that economic losses were barred by the act and, furthermore, ipse dixit that Consumer Fraud Act claims were likewise barred (Law Journal Editorial Board).

The court decided that the definition of “harm” was to be interpreted as physical injury or damaged property as opposed to being harmed economically.  The main reason this is brought up again, is because the case was being celebrated, when in fact it should be considered for reevaluation.

“The UCC’s warranty claims in non-“harm” cases still stand . . . numerous courts still apply the CFA, notwithstanding Sinclair” (Law Journal Editorial Board).  The courts left no explanation for their decision to define harm as they did, and for this reason, it should be reconsidered.

Overall, I believe that just like in this situation, product liability cases are not clear cut, but especially in this situation, courts should reevaluate cases as times change.  It’s unfortunate for those who may have been excluded from a fair ruling in the past, but it is better to reevaluate and get it correct, than to continue issuing unfair rulings.  People have the right to be protected from product liability, and in order for that to occur, the court should have to elaborate on what caused them to interpret the word “harm” in the way they chose to do.

Nicholas is an undecided major in the Stillman School of Business, Seton Hall University, Class of 2020.    

Posted by Jessica Page.

General Motors Co. has recently been in the news for its faulty ignition switches in over 2.6 million of the company’s Chevrolet Cobolts and other models that were recalled in 2014. The faulty ignition switches were found to “slip out of the run position and disable features including air bags.” This product defect has been connected to over 100 deaths and over 200 injuries. In September, the U.S. Justice Department brought a criminal case against GM. They agreed to pay $900 million to settle and a $35 million fine for not reporting the defect.

On Monday, Judge Robert Gerber stated that it is possible GM will also face punitive damages to compensate consumers who were harmed by the defect, even though the company sought to block plaintiffs making these claims. Judge Gerber has suggested the punitive damages could amount to billions of dollars if the legal claims are settled or successful. This is partially due to the fact that GM admitted in the original settlement that they “[mislead] regulators about the defective switch and [failed] to recall millions of vehicles.”

Another interesting factor for this case is the bankruptcy restructuring GM went through. In the restructure, they assumed responsibility for “future product-liability cases involving older vehicles.” Since this is so broad, it is likely that GM could be held responsible for claims on both compensatory and punitive damage because of its knowledge of the defect and conduct, but only to the extent that the “New GM” holds. GM has agreed to spend over $500 million to settle these cases and over the next few months, the company is expected to face even more death and injury cases that have yet to be settled.

Jessica is a finance and marketing major at the Stillman School of Business, Seton Hall University, Class of 2016.