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.

Sources:

Posted by Ashley Scales.

On February 22, 2018, Palantir was ordered to open their books to an investor who was seeking U.S. fraud probe.  The judge ruled, “Data analytics and security company Palantir Technologies Inc. must open its books to early investor Marc Abramowitz.”  Abramowitz wants to investigate possible fraud and misconduct at the esteemed private U.S. Company.  He sued the firm after a 2015 falling out with the company’s chief executive officer, Alexander Karp.  The lawsuit claims that Palantir prevented Abramowitz as well as many others from selling their stock in the privately owned company, while allowing sales by Karp and Chairman Peter Thiel.

Judge Joseph Slights of the Delaware Court of Chancery said that Abramowitz showed “a proper purpose of investigating potential wrongdoing and a credible basis to justify further investigation.”

Through the KT4 Partners LLC fund he manages, Abramowitz invested an initial $100,000 in Palantir in 2003.  According to Judge Slights’ 50-page opinion, Abramowitz’s investment is now estimated to be worth about $60 million.

Abramowitz and Karp had a close relationship until their falling out in 2015.  Karp “verbally abused” Abramowitz and accused him of taking intellectual property from the company.  Soon after their falling out, Abramowitz tried to sell his stock in Palantir, but he claimed that the company blocked the deal by making an offer of newly issued stock to the potential buyer.  According to Slights, Abramowitz began pursuing information from Palantir while he considered suing the company for blocking the sale of his stock.  In September 2016, in response to the potential claim against the company, Palantir sued Abramowitz for supposedly stealing trade secrets.  In a comment, Palanti said that they plan to continue to pursue their case against Abramowitz.

Abramowitz brought his case to Delaware in March 2017.  Palantir claimed that Abramowitz “should be denied information because he was likely to use it to build his lawsuit over the blocked sale”.  Judge Slights ruled, “Abramowitz could investigate Palantir’s lack of annual meetings, corporate amendments that limited KT4’s rights and the company’s sales of stock”.  However, Abramowitz would not be allowed to investigation Palantir’s value or Karp’s compensation.

Ashley is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Noah Stanton.

On the 16th of October, the Supreme Court has made the decision to proceed on the dispute between government authorities and technology companies like Microsoft, who are being forced to give emails and other digital information “sought in criminal probes but stored outside the U.S.” According to the article, justices intervened in a case of federal drug trafficking investigation where they needed emails that Microsoft had on its servers but were beyond the search warrant being that the servers are in Ireland. The Supreme Court decision is impeding investigations, according to the Trump Administration and 33 states. Cases regarding terrorism, drug trafficking, fraud and child pornography are all being delayed because courts are waiting on the ruling regarding obtaining information that is kept abroad.

This case is among many that tech companies like Microsoft about digital privacy that might relate to crime and extremism. This Supreme Court case is an example of finding the balance between older laws and recent technological developments. Microsoft is saying, “Congress needs to bring the law into the age of cloud computing” where most information is not held in the jurisdiction of current law. Back in 2013, a warrant issued to obtain emails pertaining information about illegal drug transactions. Microsoft cooperated but went to court at the time because the emails held at servers overseas were not handed over.

A Justice Department lawyer stated Microsoft can retrieve emails stored domestically or not with a single click of a button. The simplicity of the action does not change the boundaries the warrant has though. All of these troubles relate back to the 1986 Stored Communications Act, which has minimal use when information is held overseas. The article states, “The current laws were written for the era of the floppy disk, not the world of the cloud.”

The president of Microsoft said Congress needs to act by passing new legislation. This would help put an end to the numerous legal actions that take place about officials trying to obtain private information from U.S. based tech companies because they keep servers around the world. The court is expected to confront the issue of emails from an American citizen or foreigner and where they reside. The Supreme Court Case will take place early next year.

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

Posted by Leandro Iglesias.

The article “There Should be No Special Deal for Tax-Evading Cameco,” written by Murray Dobin describes Cameco, a Canadian based uranium mining colossus, that is currently facing charges in Federal Court by the Canada Revenue Agency for avoiding $2.2 billion in Canadian income taxes. As the article states, this case has been delayed for years and the fact that it has finally made it before a judge is good news. However, as we discussed in class, a lot of these forensic cases end up with companies settling and individuals are usually not held responsible. Because of that, it is important that Cameco’s case does not follow the same path, and that Cameco is held responsible for all its wrongdoings and not allowed to settle for any less. Cameco has been so arrogant in its tax avoidance, that it does not even bother to justify their tax planning and just states that they are following relevant laws and regulations. In order to bring attention to off-shore tax havens and to stop companies from abusing such tactics, Canada needs to make an example of Cameco.

As the article states, Cameco’s tax avoidance started in 1999, where they drafter Cameco drafted a 17-year uranium supply agreement at a fixed price of $10 a pound. In 1999, $10 a pound was the reasonable market value. However, as you can imagine, over the 17-year period it is obvious that price would change. As Dobin notes, “That world price went to almost $140 a pound in 2007 and is now around $35.” In order to understand the problem with the above scenario, we need to mention that the Canada corporate income tax is 27%, compared to the 10% tax rate in Switzerland. By the transfer pricing agreement, Cameco was paying Canadian income tax on revenue up to that $10 threshold, but any revenue above that was being paid in Switzerland, at a much lower 10% tax rate. As stated above, prices increased substantially from the 1999 market value, and so Cameco was benefiting of this transfer pricing agreement. The reason why this is a big deal is because the uranium was in Canada, and most of the uranium was also sold in Canada. Cameco would purposely sell its uranium at a lower $10 price to its subsidiary in Switzerland, and then recognize any revenue above $10 in Switzerland instead of in Canada, in order to avoid paying a higher Canadian income tax rate. However, as noted, an insignificant amount of revenues was actually coming from Europe.

This case sheds light on the intriguing topic of transfer pricing. Although Cameco is not a known company in the US, this case relates to the current news on Apple. Apple is facing a US$15 billion tax bill from the European Commission for its abuse of transfer pricing in Ireland. Many companies use transfer pricing to avoid paying higher taxes, which is not illegal. However, Cameco’s revenue is not generated in Switzerland, and they have no full-time employees or even an office location in Europe. Dobin states, “Virtually all the substantive work was performed in Canada. All of the uranium is mined in Canada, all of Cameco’s sales are negotiated and completed in Canada, and literally all of its profits are generated in Canada. The company’s scheme is pure scam which is why fair-tax activists in Saskatchewan call the company Scameco.”

There are ways in which transfer pricing can legally be used to decrease their tax burden, however companies are not allowed to create operations in foreign countries with the sole purpose of tax avoidance. As the article states, there is no operating business reason for Cameco to be in Europe; they neither mine uranium there or make sales abroad. The sole purpose of Cameco in Europe is tax evasion, and as a result they should be found guilty of tax evasion.

Finally, I found this article intriguing because it relates to topics we discussed in our “Legal Issues” class, and also in our Forensic Accounting class. Transfer pricing is just one of the ways in which corporations are boosting their profits, and loop-holes will always exist, hence why tax law and accounting law is always changing. Because of this reason, I believe the demand for forensic accountants is increasingly growing. Furthermore, when cases like Cameco are brought up, they usually all end up the same way, with corporations settling with the Government. I think it is important for corporations and individuals to be held responsible for their wrongdoings, and until that happens, corporations will keep on believing they can get away with it. Forensic accountants should play a bigger role in discovering and investigating cases like the one described in this article.

Leandro is a graduate accounting student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Research proposal posted by Jessica Page.

Topic

The principle of double effect creates a set of guidelines to “determine when it is ethically permissible for a human being to engage in conduct in pursuit of a good end with full knowledge that the conduct will also bring about bad results” (The Principle of Double Effect). Generally, the principle states that when someone is deciding a certain conduct that has both good and bad effects, the course of conduct they choose is “ethically permissible only if it is not wrong in itself and if it does not require that one directly intend the bad result” (The Principle of Double Effect). The moral criteria for the principle of double effect generally states the action in itself must be good or indifferent, the good effect cannot be obtained through the bad effect, there must be a proportion between the good and bad effects brought about, the intention of the subject must be directed towards the good effect and merely tolerate the bad effect and there does not exist another possibility or avenue (What is the Principle of Double Effect?).

Pros and Cons

The issue with the principle of double effect is that each situation where the principle applies is different. If an act is bad, it cannot become good or indifferent by a good motive or good circumstances. If it is evil in nature, this will not change. That being said, the principle “the end justifies the means” must always be rejected. The idea that needs to be applied to each issue is the fact that a human must never do evil, but they are not bound to prevent the existence of evil. One example we can apply this to is the BP oil spill that was discussed in class. By not mandating a cut-off switch because of how expensive it was, even though the safety benefits were astronomical, when an explosion happened on one of the rigs, eleven workers were killed and seventeen were injured. Not to mention the five million barrels of oil that gushed into the ocean. Had the US mandated these switches like they wanted, even though BP lobbied against them, it could have avoided the deaths, injuries and pollution caused by the exploding rig. In this case, the deaths and havoc caused by the explosion did not justify the fact that BP was trying to save money for their own personal benefit. Another example where the principle of double effect is relevant today is the controversy of euthanasia. It is used to justify the case “where a doctor gives drugs to a patient to relieve distressing symptoms even though he knows doing this may shorten the patient’s life” (BBC). The doctor’s intention is not to kill the patient, but the result of death is a side-effect of reducing patient’s pain. One problem that people argue against this doctrine is the fact that they believe we are responsible for all anticipated consequences of our actions. Another is the fact that intention is irrelevant. A third issue, specifically in the euthanasia issue, is the fact that death is not always seen as a bad thing making the double effect irrelevant. Lastly, the double effect can produce an unexpected moral result.

Ethics and Principles

When looking at the incorporation of Catholic, one of the main issues that concerns this principle and the Catholic religion is that case where a pregnancy may need to end in order to preserve the life of the mother. The example most often given is a woman with uterine cancer. By removing the uterus, it will bring death to the fetus but the death is not “directly” intended and in turn, the mother will live. It is an issue that still is debated today (Soloman). Another similar case having to do closely with Catholic ideals is when a woman has an ectopic pregnancy and must receive surgery to remove the embryo. At a Catholic hospital, it can be questioned whether that specific procedure is considered a direct abortion, going against the Catholic ideals and morals, no matter what the means of the surgery are. “The principle of double effect enables bioethicists and Catholic moralists to navigate various actions that may or may not be morally justifiable in some circumstances” (Kockler). The idea of proportionate reasoning has also been condemned by Pope John Paul II. He categorized proportionalism as a species of consequentialism. This is condemned by the Church because no Catholic moralist would agree that a desirable end justifies any means (Kockler). These are serious issues, especially when considering the principle of double effect from a Catholic standpoint.

Works Cited:

Kockler, Nicolas. The Principle of Double Effect and Proportionate Reason. http://journalofethics.ama-assn.org/2007/05/pfor2-0705.html

“The Doctrine of Double Effect”. BBC. http://www.bbc.co.uk/ethics/euthanasia/overview/doubleeffect.shtml

“The Principle of Double Effect”. http://sites.saintmarys.edu/~incandel/doubleeffect.html

“The Principle of Double Effect”. http://www83.homepage.villanova.edu/richard.jacobs/MPA%208300/theories/double%20effect.html

“What is the Principle of Double Effect?” http://ncbcenter.org/document.doc?id=132

Posted by Kyle Beck.

When someone is looking for an easy target to steal money from, they do not usually decide pick the US military. That is not the case for Alex Wisidagama, the global manager of Glenn Defense Marine Asia, who overbilled the maritime branch of the US military by more than $34 million. He, along with his cousin Leonard Glenn Francis who is the top executive of GDMA, and ten other naval officers have been charged in the case and “all but one has pleaded guilty.” Wisidagama has been sentenced to five years while his lawyer argues that he should only be given thirty months.

The naval officers pleaded guilty to bribery and “diverting ships to Asian ports where the company owned the port or the port had lax oversight, allowing GDMA to inflate prices.”

While GSMA has done business with US naval ships in Asia for 25 years, investigators are still looking into how long the maritime branch has been getting overcharged. Investigators are currently focused on Francis, because he admitted to providing “an exhaustive list of gifts, including payments for prostitutes, concert tickets and luxury hotel stays for Naval officers in exchange for classified information that helped his company carry out the scheme.” This comes as a huge problem for Wisidagama because, according to his lawyer, no one in Wisidagama’s position after this case would be able to pay off the charges, because he is not allowed to ever work on government contracts.

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

Posted by Luis Ferreira, Jr.

Volkswagen, who recently met the goal of becoming the world’s biggest car making company, has gotten themselves into some legal troubles. The accusations stem from excessive amounts of pollutants caused by their cars and using emission cheating software to cover it up. The company has installed the software into 11 million engines worldwide. The software is supposed to limit the amount of a toxic nitrogen oxide that is released from the car, however, the company’s device instead lets the vehicle release pollutants about 40 more times the legal amount. Volkswagen did this because it lets the car have better acceleration and fuel economy. This device is illegal in the United States and in many other countries.

The court gave the company until April 21, 2016 to fix all of their cars. The court told the German car company that if the cars were not fixed by this specific date, then they would a breach trial. The company is also getting fined in all of the countries it sold the cars in and facing many legal suits from car owners that are very upset over this dispute. Everything, including cars fixed, payments to unpleased customers, and timing, must be resolved by April 21^st or the company will be going to trial.

Volkswagen has said they are “’committed to resolving the US regulatory investigation into the diesel emissions matter as quickly as possible and to implementing a solution for affected vehicles.’”

The company has said they are going to follow all of the orders by the judge to be able to avoid trial and get the company out of these legal troubles.

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

Posted by Nikolina Stojkovic.

Insider trading just got a little easier, if you can use the right defense.  Based on the case United States v. Newman, insider trading charges were dropped based on what was considered wrong jury instruction and failure to show sufficient evidence for conviction. The case was tried in a New York district court. New York has joined the cavalry in trying to take down Wall Street crimes.  US Attorney General Preet Bharara took office about six years ago and arrested 100 people for insider trading, of whom 87 have been convicted¹.

A little background of the case will help demonstrate what defense attorneys were able to accomplish in appeals. In January 2012, hedge fund portfolio managers Todd Newman and Anthony Chiasson were charged with securities fraud. In December 2012, they were convicted and, in May 2013, sentenced to lengthy terms: 54 months for Newman and 78 months for Chiasson¹ for using information tipped to them about Dell and Nvidia via an intermediary. Newman earned $4 million and Chiasson earned $68 million as a result of the information received.²  The charges were overturned because the prosecution never linked a personal benefit received by the original tipper, not because Newman/Chiasson denied receiving the information.

According to the defense, their clients did not commit any crime because the tipper received no known benefit of relaying the information, nor did the intermediaries that passed along the information to Newman and Chiasson.  Rather, their actions were part of a business transaction based on information received.  It sure sounds like insider trading without the benefit requirement.

Nonetheless, the appeals court decided otherwise.  Their decision spurred a flurry of review on pending and previously decided cases, where guilty verdicts were found and admissions of guilt were allowed on insider trading matters. Based on the defense attorney’s argument, insider trading cases will become more challenging for the US Attorney General’s office.  In this matter, based on the charges, the defendants are not guilty.  However, had the tipper received quid pro quo in exchange for the information, Newman and the like, would be guilty of insider trading. Quid pro quo seems trivial in the matter, either you acted upon the information or you didn’t.

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

Sources:

¹ http://fortune.com/2015/09/23/supreme-court-insider-trading-newman

² http://www.bloomberg.com/news/articles/2015-10-05/insider-trading-cases-imperiled-as-top-u-s-court-spurns-appeal

Posted by Shakil Rahman.

For a car to be eligible for sale, it has to pass various tests which are placed in order to make sure that the cars for safe for use by the customers. Certain improvements are made to cars to also make sure that during an accident, there are some protections for the customer inside the car. GM motors ignition switch for the some small cars in the late 1990s and early 2000s were defective and it would shut of the engine during driving and this also prevented from the airbags from deploying during a crash. While GM executives and engineers became aware of the defective ignition switch, they did not attempt to fix the problem as it was assessed to be too costly. But by 2012, it was discovered that the defective switch also prevented the air bags from deploying. GM did not disclose the safety hazard to its customers, which led to over 120 deaths and multiple injuries. In 2014, GM started recalling cars with faulty ignition switch in order to fix it, and after the recall, multiple customers filed lawsuits against GM for the injuries caused due to the defective ignition switch. Lawsuits were filed against GM for false advertising due to not disclosing the defect to customer before buying the product. GM came to a settlement with the customers and agreed to pay $575 Million as compensation and also paid $900 million pay to US.

There are various points of interest in the case that are related to corporate responsibility, advertisements and negligence. The lawsuits that were filed against General Motors were for false advertising, and for injuries caused from malfunctioning products created by General Motors. General Motors car’s ignition switch was faulty and therefore sometimes it would shut down the engine while driving and since the engine shut down, the air bags would not deploy during an accident. So the defective ignition switch would cause the car to shut down while driving and therefore causing car accidents and also the air bags would not be deployed which would lead to the injury from the crash to be amplified. Therefore, General Motors is liable for the injuries caused by the defect, because their product is directly causing the accidents and the injuries that are related to it.

The other portion of the lawsuits was about false advertisement by General Motors about their cars. General Motors did not know about their defective ignition switch before 2005 but decided to not recall the cars after a risk assessment about the expense that will needed to fix the ignition switch. Now even if they decided to stop selling cars with faulty ignition switch, they still did not make an effort to fix the ignition switch for cars that were already sold and also did not warn the customers about the product’s defect. This is not only false advertisement but also negligence because the customers were going to be harmed even after using the product as it was intended to be used. So in conclusion, General Motors was liable for the injuries that were caused by their defective products because they did not inform the customers about the hazard of using the product and also for not attempting to fix a defect that could injure the customers.

The irony of the whole situation is that General Motors decided not to recall the vehicles in 2005 to fix the defect because of the fact that they came to the conclusion that it would too expensive. And now in 2015, their insistence on not recalling the cars back for repairs back in 2005 has led to a federal fine of $900 million and settlements of $575 million for the customers who were injured due to the cars faulty switch.

In the business world, when a company is attempting to look at the direction the company is going they need to see how their actions might affect the company in the long term. While paying for the repairs in 2005 may have been expensive, right now they have paid around $2 billion dollars in fine and are predicted to pay around $2.7 billion for repairing the recalled cars. And on top of that, the break of trust between GM and the customers are surely going to affect the company’s progress and profit.

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

Posted by Amber Piskunov.

The well known German car maker, Volkswagen, has made headlines regarding a scandal involving software that cheats diesel emissions testing. This software has affected over 11 million diesel fueled cars creating many lawsuits. The cheating software covered up nitrogen oxide emissions and underestimated greenhouse gas emissions and also fuel consumption. This scandal has created many more lawsuits against the car maker regarding the violations of the US environmental laws. Volkswagen has admitted to installing the software due to the investigation which also involves whistle-blowers of the company. There has been a lack of progress with this lawsuit because there is not a valid explanation as to whom allowed the decision for the cheating software.

The investigation is still ongoing; the EPA has called for the employees of Volkswagen to come forward with any information regarding the matter. They have until November 30th to provide information regarding the truth to the scandal. A statement was made by US law firm Jones Day stating, “Those who come forward before the deadline have nothing to fear from the company in the way of repercussions on the job such as being fired or held liable for damages.” However, this offer is only for those protected by the collective bargaining pact. This is a way for workers to feel less threatened by the scandal and to help the law firm gain information to further reach a decision. Volkswagen has said they have no influence over decisions made by other employees who decide to come forward. Volkswagen is trying to cover up as much information as they can to prevent further actions against them.

Volkswagen has been under the spotlight since the scandal was announced. Following the announcement, Volkswagen has had a drop in sales from all around the world. The company also announced they will begin fixing the emissions problem in January. Not only is Volkswagen beginning to fix the problem, they are also offering gift cards as a form of goodwill in hopes to help maintain their reputation. Compensation to car owners is still being discussed as the lawsuit continues.

The impact this has had on the car maker should have been looked upon before the decision was made to install the software. Volkswagen clearly knew this was an issue and still decided to produce the vehicles in hopes of profits. Not only did they get caught with illegally installing software that goes against the Environmental Protection Agency, they now have a massive lawsuit causing bad publicity and a decline in sales. All in all, Volkswagen has affected many aspects of their company along with the public and environment.

Amber is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2017.

http://www.theguardian.com/business/2015/nov/13/volkswagen-car-sales-fall-october-emissions-rigging-scandal

http://www.wsj.com/articles/volkswagen-to-offer-whistleblowers-impunity-on-emissions-cheating-scandal-1447317337

Posted by Patrick Osadebe 

Do you think the lawyers in America get paid as much as they deserve? How much do you think a lawyer makes in a year? According to a survey conducted in 2014 by the Association of Law Placement, the highest starting salary of one of the largest firm in the US with about 700 plus employee is $160,000. This number may seem to be high based on our present economy situations but the results are accurate.

From the survey, only 27% of firms actually responded and one third actually start their employees with $160,000. According to James Leiplod who is the current NALP executive director, he stated that “it is fair to say that law firm starting salaries are flat.” In contrast to that statement, the starting salaries was much higher before the economic recession and the figure is basically a reflection of changes in large firm market.

Different firms may have different starting salaries based on size and experience but according to the survey, the median starting salary is about $125,000, which has been unchanged since 2012.

Patrick is a business administration major with a concentration in finance at Montclair State University, Class of 2016.

Posted by Giancarlo Barrera.

First it was Target, Home Depot, and now, JPMorgan Chase.  They are the next victim under cyber attack. Chase is the biggest bank by assets in the US. They are also the dominate bank in New York City, where the majority of banks’ cooperate headquarters are located . “JPMorgan Chase has 65.8 million open credit card accounts, and 31.8 million of those accounts with sales activity, according to its most recent quarterly report. Chase also has 30.1 million checking accounts.”  According to what the FBI has been investigating, names, addresses, phone numbers, and emails were taken, but no passwords and social security numbers

It was reported that the hackers did not receive any money from this cyberattack. “The bank’s Chairman and Chief Executive Officer Jamie Dimon said that the company will spend $250 million this year on cybersecurity, but has been losing security employees to other banks with more “expected to leave soon.”

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

Posted by Michael Cappelluti.

It is no surprise that our society is on the brink of a technological revolution. It is projected that “65% of elementary school students will hold jobs that do not exist yet when they enter the workforce” (Frank Diana). By 2029, Ray Kurzweil predicts we will have technology that will allow us to live forever. While these technologies may benefit us, our society will be forced to react to these changes. Ethics and law will be crucial in making these reactions a reality. A more pressing issue, though, is the introduction of autonomous vehicles on the road. The article, “Law & the Problem of Autonomous Cars” by Nicholas Stringfellow, offers a legal perspective on the implications of this new technology.

Autonomous vehicles will disrupt many aspects of law, but the article starts off by discussing statutory law. Stringfellow believes that the state and federal levels of government will have to create a body of law about self driving cars—specifically about what happens when the “autopilot system” fails and the passengers are forced to disengage the autopilot and take control. Four states currently have a statutory law for autonomous vehicles, but they differ in some ways. Some states require a person to sit in the driver’s seat in case something were to go wrong, whereas some are more lax about an “emergency driver.” A huge ethical issue will be whether the car is programmed to defend the passengers at all cost, or, from a utilitarian standpoint, make whatever decision will save the most lives in the scenario.

The article also goes on to discuss Tort law, specifically, products liability law. “Injured persons could bring manufacturing defect, design defect, failure to warn, or breach of warranty claims [to a court]” in the instance of an accident (Stringfellow). Courts will be forced to respond by “adopting a negligence standard, a strict liability standard, or by refusing to impose liability on carmakers.” Essentially, if a car is programmed to protect the most amount of lives in a situation—what happens? For example, if a car spins out of control onto the sidewalk to avoid a fatal accident pile-up on the road ahead, will the pedestrians killed by the disoriented car be able to file a law suit? These questions are unknown, at this point. This topic will be heavily discussed by futurists, ethical analysists, and lawyers in the near future—and this will pave way to the future of how we transport ourselves as human beings.

Michael is a marketing and management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Sydney Kpundeh.

A disgruntled New Jersey father has brought products liability design defect and failure-to-warn claims against The New Jersey Port Authority Transit Corporation to recover for injuries arising out of a take-home asbestos exposure. The case’s premise surrounds the father’s daughter, who started to exhibit signs of mesothelioma, which he claims were a result of secondary exposure to friable asbestos fibers through direct contact with her father and while washing his asbestos-laden work clothing. The father is an employee of the Port as a train operator, yard operator, and supervisor. His job duties included the repair and maintenance of asbestos-contaminated air brake systems on the Port’s multiple unit locomotives. When his daughter’s symptoms started worsening, he filed a product liability design defect and failure-to-warn case against the Port and various manufacturers of locomotives and locomotive brake shoes. He claimed that his daughter’s injuries could have been caused by her exposure to asbestos dust created when he replaced the brakes on cars he worked on after hours.

When the case was put before the court, all parties moved for summary judgment. The Port’s argument was that federal legislation and court precedent preempted state tort claims related to locomotives. The automobile defendants argued that there was no evidence that the father’s contacts with automotive brake dust were sufficiently frequent, regular, and proximate to establish causation.

The Appellate Division of the Superior Court of New Jersey ruled that the injuries were preempted by the Locomotive Inspection Act (LIA) under the doctrine of field preemption. The court ruled in such direction because they examined a number of previous decisions that had been considered in the scope of the LIA’s preemptive effect and found that the only way to ensure uniformity is that they must rule the same way.

The failure-to-warn claims that the father filed against the various manufacturers and sellers of asbestos-containing automobile brakes were dismissed summarily because there was insufficient evidence of medical causation linking their products to second-hand exposure. “[T]he evidence showed that the father replaced brakes shoes contaminated with asbestos on four occasions over a period of eight years.”

When he was asked about these times, he could not recall the names of the manufacturers of the replaced brake shoes nor could he recount the number of times he installed new brakes manufactured by the named defendants. Therefore, “it was clear that even if the father was exposed to one of each of the automotive defendants’ products over the eight-year period in question, this exposure was so limited that it failed to meet the frequency, regularity, and proximity test that is required for this type of case.” Hence, this is why the case was dismissed.

Sydney is a political science major and legal studies minor at Seton Hall University, Class of 2016. 

Posted by Gerald Wrona.

Interesting. That is one word to describe the NY Times report on the pre-trial proceedings of the Libyan Investment Authority’s (LIA) suit against Goldman Sachs (Anderson). Acting as broker-dealer to the sovereign wealth fund, Goldman established a relationship with the fund’s managers in 2007. A year later, Secretary of State Condoleezza Rice was visiting Moammar Gadhafi in Libya’s capital to devise a “trade and investment agreement . . . which will allow the improvement of the climate for investment.” (Labbott). Shortly after that promising convention between the two political heads, Goldman and the Authority finalized the agreement and the bank sold derivative products totaling $1 billion to the LIA. Then the housing market “opened its mouth” and out came the demon of the subprime mortgage crisis.

Understandably, the LIA felt exploited. They bit the bullet. Their lawyers came to the London High Court armed with notions that those managing the sovereign wealth fund were ineffectual in understanding the investments presented to them by Goldman. To add insult to insult, they further asserted that the fund administrators were altered in their judgment by Goldman representatives’ leadership role in incidents allegedly involving the recreational consumption of alcohol and visits paid to what may have been brothels, or some other manufacturer of night entertainment, though a witness statement does not specify. Considering that it would never have been in Goldman’s interest to spend more time carousing then working on the deal with the authority, it is highly unlikely that the time spent in leisure outweighed the hours dedicated to the investigation of the necessary facts of the deal.

Though it is worth noting that Goldman has already been ousted for luring investors into crummy deals and then betting against those deals to increase revenue. This is how Goldman actually made money off the subprime mortgage crisis (Cohan).

Will evidence be disclosed that suggests Goldman dealt with the LIA in a similar way? It’s impossible to know. I believe the judge will find that the heart of the matter is whether Goldman conducted due diligence in their dealing with the LIA. For that reason, Robert Miles, one of the attorney’s representing Goldman, would do well to look to the Securities Act of 1933 for support. It states: “If a Broker Dealer conducts reasonable due diligence on a security and passes the information on to the buyer before a transaction, the Broker cannot be held liable for non-disclosure of information that was not found during the investigation.”  Securities Act of 1933, SEC §§ 38-1-28 (SEC 1933).

The trial is expected to start next year.

Gerald is a Business Administration and MIT major at Montclair State University, class of 2017.

Posted by Xiaoxie Zheng.

Now, more and more countries are beginning to regulate bitcoin and other cryptocurrencies. In this essay, I’ll focus on bitcoin. Unlike the French currency, there is no national credit endorsement behind bitcoin, and no guarantee of legal significance. It is implemented by the rules set by a group of people. Here are the main features of bitcoin:

First, there is no intermediary. The bitcoin publishing process is only controlled by the algorithm, and it is very difficult to control the centralizing mechanism.

Second, there is no inflation. Limited by the algorithm, the total supply of bitcoins is controlled and will never exceed 21 million.

Third, there is openness and transparency. Through technology, transactions are transparent and transaction costs are low.

Bitcoin is thoughtful. But the value of bitcoin is far from stable. The price of bitcoin can rise more than 100%, and sometimes it can collapse overnight. On the one hand, when it comes to determining value, it is difficult to do; on the other hand, the holder of bitcoin may be more speculative in his or her investment, which is not the ideal currency circulation function.

The problem with bitcoin is that hackers are a big threat. On June 19, 2011, a security hole in the Mt.Gox bitcoin trading center caused the price of one bitcoin to drop from $15 to a penny. In August 2011, the bitcoin exchange, MyBitcoin, was hacked, and more than 78,000 bitcoins worth $800,000 were missing.

As for the relationship between bitcoin and the economy, it has theoretically eliminated inflation and brought about deflation. In addition, the openness of technology is the intrinsic “spiritual value” of bitcoin, and therefore the competition of a large number of new virtual assets is inevitable. Its homogeneity itself leads to the risk of impairment of value and internal collapse.

Some countries have adopted a strict ban on bitcoin, such as Ecuador and Bolivia. But prohibition is not the best way to handle the matter. Comprehensively denying the authenticity and financial connotation of bitcoin and digital assets will not detract from its significance in financial transactions.

The lack of oversight of bitcoin can pose a significant systemic risk. The chaos of the digital asset floor and the trading platform can bring systemic risks. For example, money laundering is a public safety hazard. As a result, it is difficult to restrain speculation and the financial risks brought by it. Instead, governments cannot strictly regulate it under the current financial legal framework, nor can it effectively protect financial consumers.

The US Congress is right to impose stricter federal regulations on these emerging asset classes.

Xiaoxie is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source:

https://www.foxbusiness.com/politics/us-congress-sets-sights-on-federal-cryptocurrency-rules

Posted by Giancarlo Barrera.

First it was Target, Home Depot, and now, JPMorgan Chase.  They are the next victim under cyber attack. Chase is the biggest bank by assets in the US. They are also the dominate bank in New York City, where the majority of banks’ cooperate headquarters are located . “JPMorgan Chase has 65.8 million open credit card accounts, and 31.8 million of those accounts with sales activity, according to its most recent quarterly report. Chase also has 30.1 million checking accounts.”  According to what the FBI has been investigating, names, addresses, phone numbers, and emails were taken, but no passwords and social security numbers

It was reported that the hackers did not receive any money from this cyberattack. “The bank’s Chairman and Chief Executive Officer Jamie Dimon said that the company will spend $250 million this year on cybersecurity, but has been losing security employees to other banks with more “expected to leave soon.”

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

Posted by Ahmed Alzahrani.

In this article, the rapper DMX is accused of evading tax. The rapper pleaded not guilty to any of the charges against him.  He was later released in prison after spending one day in jail; this was after he paid $500,000 bond. The persecutor asserts that Earl Simmons also known as DMX evaded an estimated $1.7 million in tax in the peak of his profession between 2002 and 2005.

He purportedly avoided paying taxes, including establishing accounts on other names and paying most of his expenditure in cash. This was a violation of the law whether you are a celebrity rapper or not; paying taxes is necessary to all Americans. The prosecutor also indicated that DMX failed to file his returns in the period between 2010 and 2015; the prosecutor added that the accuser filed a fake affidavit in the US Bankruptcy Court (LIBBEY, 2017).

The bail postulated that DMX to be restrained in New York City. However, his lawyer reported that he would ask for permission for the accuser to travel for a show performance in summer. After the hearing, Mr. Simmons (aka DMX) told the journalist that his faith played a significant role in coping with a legal issue. It gave him the courage to face the situation.

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

Reference:

LIBBEY, P. (2017, July 16). DMX Pleads Not Guilty to Tax Fraud. Retrieved from The New York Times: https://www.nytimes.com/2017/07/16/arts/music/dmx-pleads-not-guilty-to-tax-fraud.html?rref=collection%2Ftimestopic%2FTax%20Evasion&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collect.

Posted by Mladen Trajkov.

Uber has become really successful and has grown and increased its market share tremendously in the last four years. The company is operating worldwide, and is valued around $62.5 billion. Their increase in presence can be seen in various places, especially in New York City. However, not everything looks so perfect with Uber. The drivers are not employed with the company, but they are self-employed and just sign contracts with Uber for the time period of work. Therefore, Uber is not entitled to pay them the minimum wage required by the state. “Research by Citizens Advice has suggested that as many as 460,000 people could be falsely classified as self-employed, costing [millions] a year in lost tax and employer national insurance contributions”, is written in the Guardian. Uber can`t classify its drivers are self-employed, therefore it has to provide the necessary benefits. This is based on two drivers in the UK who were employed by Uber. They were pressured to work long hours, instead of really working for themselves and make their schedule of working hours. Therefore, Uber was accused of “Resorting in its documentation to fictions, twisted language and even brand new terminology.”

This is going to have a bigger impact, because Uber is not the only business that does the self-contracting principle. Looking at Uber, a lot of other companies follow what Uber does, implements similar principles, and traps their employees in the self-employment scheme, which of course is not ethical. “The effect of this judgment is that those kinds of business may owe a lot more to their workers, such as paid holiday and minimum wage, than they had bargained for,” is said in the Guardian. This is an opportunity for those workers to enjoy the same privileges as regular workers do, for which they were previously denied and not entitled for.

A self-employed driver for Uber means that they do not qualify for health insurance, holiday pay, or the national minimum wage. On the other side, being self-employed means that you get to choose your hours of work and how much you work; basically you are your own boss. There are drivers who agree with this model, however some drivers are still disappointed. Drivers who agree are happy mostly because of the benefits of health insurance; however, they believe they are going to make less money now if they work less hours and make only the minimum wage. Other drivers who disagree, don`t really see themselves being employed. They prefer the freedom of choosing the hours of work and having their flexible schedule.

Mladen is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2017.

References:

https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status

http://www.bbc.com/news/business-37802386

Posted by Giancarlo Barrera.

First it was Target, Home Depot, and now, JPMorgan Chase.  They are the next victim under cyber attack. Chase is the biggest bank by assets in the US. They are also the dominate bank in New York City, where the majority of banks’ cooperate headquarters are located . “JPMorgan Chase has 65.8 million open credit card accounts, and 31.8 million of those accounts with sales activity, according to its most recent quarterly report. Chase also has 30.1 million checking accounts.”  According to what the FBI has been investigating, names, addresses, phone numbers, and emails were taken, but no passwords and social security numbers

It was reported that the hackers did not receive any money from this cyberattack. “The bank’s Chairman and Chief Executive Officer Jamie Dimon said that the company will spend $250 million this year on cybersecurity, but has been losing security employees to other banks with more “expected to leave soon.”

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

Posted by Ashley Scales.

On February 22, 2018, Palantir was ordered to open their books to an investor who was seeking U.S. fraud probe.  The judge ruled, “Data analytics and security company Palantir Technologies Inc. must open its books to early investor Marc Abramowitz.”  Abramowitz wants to investigate possible fraud and misconduct at the esteemed private U.S. Company.  He sued the firm after a 2015 falling out with the company’s chief executive officer, Alexander Karp.  The lawsuit claims that Palantir prevented Abramowitz as well as many others from selling their stock in the privately owned company, while allowing sales by Karp and Chairman Peter Thiel.

Judge Joseph Slights of the Delaware Court of Chancery said that Abramowitz showed “a proper purpose of investigating potential wrongdoing and a credible basis to justify further investigation.”

Through the KT4 Partners LLC fund he manages, Abramowitz invested an initial $100,000 in Palantir in 2003.  According to Judge Slights’ 50-page opinion, Abramowitz’s investment is now estimated to be worth about $60 million.

Abramowitz and Karp had a close relationship until their falling out in 2015.  Karp “verbally abused” Abramowitz and accused him of taking intellectual property from the company.  Soon after their falling out, Abramowitz tried to sell his stock in Palantir, but he claimed that the company blocked the deal by making an offer of newly issued stock to the potential buyer.  According to Slights, Abramowitz began pursuing information from Palantir while he considered suing the company for blocking the sale of his stock.  In September 2016, in response to the potential claim against the company, Palantir sued Abramowitz for supposedly stealing trade secrets.  In a comment, Palanti said that they plan to continue to pursue their case against Abramowitz.

Abramowitz brought his case to Delaware in March 2017.  Palantir claimed that Abramowitz “should be denied information because he was likely to use it to build his lawsuit over the blocked sale”.  Judge Slights ruled, “Abramowitz could investigate Palantir’s lack of annual meetings, corporate amendments that limited KT4’s rights and the company’s sales of stock”.  However, Abramowitz would not be allowed to investigation Palantir’s value or Karp’s compensation.

Ashley is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Michael de Andrade.

Volkswagen, one of the European auto giants, admitted to “installing defeat device software in 11 million cars.” These “defeat device software” lets carmakers to change performance settings of the engines before a pollution test. These software would not only switch the performance settings of an engine but also detect when “they were being tested for nitrogen oxide emissions.” The installation of such defeat device rose a huge debate as to whether or not Volkswagen’s “emissions-test trickery” is a violation of European testing rules. The question at hand as described by Paul Willis, top Volkswagen official in Europe, was “whether the software officially constituted a defeat device” under European Union regulations.

The Volkswagen scandal, not only questioned whether Volkswagen is cheating or not, but questioned strongly Europe’s permissive testing practices and the compatibility of American and European auto regulations. This scandal led to Trans-Atlantic trade talks to rapidly increase so the United States and European nations can agree to a mutual auto regulation rules. In Europe “the setting of the engine and of the vehicle’s controls shall be those prescribed by the manufacturer;” making Volkswagen alteration of engine settings not a clear cut violation of European rules. But what makes the debate become such a big issue is that roughly 11 million Volkswagen vehicles carry the software, which about 500,000 are in the United States alone. This can cause Volkswagen to lose billions of dollars despite the penalty enforcements by auto regulators in Europe are very passive and rare.

Volkswagen came out by stating they are “committed [themselves] to fixing the vehicles.” Volkswagen is being comprehensible and trying to fix the issue that they commenced. As stated by Ms. Caudet, “European legislation implies that a vehicle must use the same engine setting during the regulatory emission test and in real driving,” which would make Volkswagen’s actions a violation against European auto regulations. The situations at hand continued to cause tension when the Environmental Protection Agency discovered that Volkswagen used another defeat device in some larger cars and sport utility vehicles that had not previously been implicated” making the cost to fix the issue grow substantially. In the end, the European system is known for its loopholes, for “allowing automakers to test preproduction vehicles that will never be sold” but actions need to be done so auto regulation rules in Europe and the United States, through the Trans-Atlantic agreement, can become more enforced. The “phony system of testing” as described by Gerben-Jan Gerbrandy, a Dutch member of the European Parliament, must be improved and by “simply making the road emission tests easier to pass,” is simply not the right step by the European government.

Michael is a sports management major at the Stillman School of Business, Seton Hall University, Class of 2018.