Posted by Faris Alzahrani.

On June 20th Christiano Ronaldo was accused by the government prosecutor for evading tax four times amounting to $16.5 million. Ronaldo was investigated and was expected to appear before Pozuelo de Alarcon court No. 1 on July 31. His summoning accorded with the same prosecutor who indicted Mourinho for evading tax two times. The prosecutor reported that there was enough evidence that Christiano Ronald used a shell firm to hide the cash she had acquired from the team image rights. However, Ronaldo pleaded not guilty.

It believed that Ronald had to move out of the country and join another football club because of the accusations against him. It was alleged that Mourinho committed tax deception in a period between 2011 and 2012; this is according to Madrid’s prosecutor. All of the evidence was based on the facts delivered by Spain Tax Office that indicated that Mourinho also hides money from profit rights and avoided to pay tax (Fox, 2017).

Everything was left in judges hands. It is crucial to note that these individuals are not the first to be accused of tax fraud. Last year a Barcelona striker, Lionel Messi was indicted for tax fraud on three counts that amounted to $4.6 million, this mainly from the income made from image rights. He was given a 21-month jail sentence, but he was not expected to serve in prison, since it was his first offense and his sentence was below two years.

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

Reference:

News, F. (2017, June 20). Cristiano Ronaldo, Jose Mourinho caught up in Spain tax scandal. Retrieved from Fox News: http://www.foxnews.com/sports/2017/06/20/cristiano-ronaldo-jose- mourinho-caught-up-in-spain-tax-scandal

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 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 Kelly Shaw.

Morris Zukerman, age 72, plead guilty in June 2016 to obstructing the IRS as well as tax evasion. He was sentenced to 70 months in prison for his criminal offenses in March 2017. Morris sold a co-owned petroleum products company, which was owned by a subsidiary of his investment firm M.E. Zukerman & Co., and then proceeded to mask the income he received from the sale. By doing so, Morris was able to evade taxes on his $130 million in income in 2008.

One may wonder how Morris was able to hide such a large profit from his accountants and receive clean audits over the years. The cover story that was given stated that in 2007, Morris transferred ownership of the subsidiary to a trust account. He even went as far as creating false documents to support his story such as a promissory note. By not reporting the $130 million sale, M.E. Zukerman & Co was able to avoid paying $33 million in corporate income taxes.

To add to Morris’s list of crimes, he also claimed a $1 million charitable contribution deduction in 2009  and 2011, which he was not entitled. Morris was registered to purchase a property on Black Island that the Maine Coast Heritage trust (MCHT) was preparing to purchase and use for business purposes. After contemplating about whether he would make a charitable contribution or not, he ultimately purchased the land for himself through his new LLC for $1 million. On his personal tax return, he convinced his accountant that the purchase should be stated as a charitable contribution to MCHT which was incorrect.

A quote from the US Attorney John H. Kim, “While amassing a personal fortune through, among other things, the $130 million sale of his company, Morris Zuckerman cheated on his taxes for years, illegally scheming to evade almost every one of his tax liabilities. Through his criminal schemes, Zukerman deprived the public of over $45 million in taxes he rightfully owed.” It is evident that Morris Zukerman’s actions were motivated by pure greed with little regard for the consequences of his actions.

Kelly is an MBA student with a concentration in accounting at the Feliciano School of Business, Montclair State University.

Reference:

https://www.justice.gov/usao-sdny/pr/manhattan-energy-investor-sentenced-70-months-prison-evading-over-45-million-income-and

Posted by Mohammed Almanqari.

Uber Company is always thought of being sued now and then for one or two issues. Apparently, the company has sued an advertising company called Fetch Media. Uber has taken to court Fetch Media accusing it of click fraud. The company had improperly billed Uber for online advertisements, which were not genuine. Fetch Media took advantage of the same and benefited from application downloads that did not belong to it. Fetch Media is owned by Dentsu, one of the largest advertising company in Japan. The case was filed by Uber on 19^th September 2017 in the US District Court in San Francisco.

After placing the charges, Uber said that it expected not less than forty million dollars as compensation for the damages caused by Fetch Media. However Uber is not fond of taking to court most of the issues it faces; in fact, according to report prepared by Bloomberg, Uber has been a plaintiff twice but has been accused in more than 250 cases. Ever since the internet became a money-making platform, fraud related to online advertising has been on the rise. “One of the biggest challenges we face as digital marketers is to reduce mobile ad fraud.” This was according to the chief executive of Fetch Media, James Connelly. According to the head of media at Fetch Company, Steve Hobbs, a big percentage of downloads from Fetch`s system are noted as invalid or not genuine.

Uber became aware of this fraud during a period when it was putting efforts to shut down and avoid a scandal that was different. Uber Company then requested Fetch Media not to post any advertisements on a certain website called Breitbart news which was being run by the former chief strategist of President Donald Trump. However, ads stills appeared on that site. Fetch canceled the running of ads from any network that was related to Breitbart but this did not reduce the number of application downloads. There is a specific fee paid to Fetch by Uber when a customer downloads the company`s application. From the years 2015 to 2017, Uber had paid close to $8.4m for ads regulated by Fetch Company.

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

Reference:

http://www.fin24.com/Tech/Companies/uber-goes-on-rare-legal-offensive-suing-ad-agency-for-fraud-20170919

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 Ahmed Alhadaith.

Embezzlement is an illegal activity which several business owners have found themselves in over the years. One of the most recent cases in the United States involved one Jonathan Todd. He was an entertainment manager and through his dealings; he allegedly embezzled funds from some of his clients. Some of the clients sued him in a civil court and on January 18^th 2017; he accepted that he had embezzled funds amounting to more than 6.5 million.  He had done this by taking “Clients money for himself and Falsifying Account records to conceal the embezzlement.”

In the case, the judge sentenced him to six years in prison ruling that his actions were plainly “insidious’, ‘audacious’ and they brought about ‘grave economic and psychological harm to his victims’” (Robb, 2017). From the case, Schwartz had stolen money from multiple clients. In one instance, he had said that. His admission to the claims levied against him brought him to the seven year sentence. However, he agreed that he had made the mistake and took full liability for his actions.

In his actions, he had broken the law and hence met the full force of the law. In another article on the same site, the judge said that money managers hand responsibilities, both moral and fiduciary, to preserve the assets of their clients without using the money for their own gain. On top of this, He had evaded taxes by filing false tax returns for the year 2012 ,and the Judge noted that he would face ‘serious consequences’ as a result. His case was taken especially to serve as a lesson to other financial professionals and deter them from engaging in fraudulent activities as he had (Robb, 2017). Through these articles, the Deadline Blog sheds light into Business Forensics accounting and the application of commercial law in indictment of embezzlers and fraudsters.

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

References:

Robb, Davi. Alanis Morissette’s Business Manager Sentenced To Six Years In Prison After Stealing $7 Million. 04 May 2017. .

Robb, David. Manager Admits He Embezzled $4.8M From Alanis Morissette. 18 January 2017. .

Posted by Alexander D. Bakogiannis.

Earlier this year the SEC reported that a medical device company named Orthofix was being charged with improperly booking revenue and making improper payment to doctors and government owned hospitals in Brazil.

They improperly recorded revenues as soon as a product was shipped before securing payments. When a company makes revenues from its operations, it must be recorded in their ledgers and then reported on the income statements every reporting period. According to GAAP, there are two criteria the company must meet before it can record revenues. First there must be a critical event that triggered the transaction process, and the amount collected from that transaction is measurable within a certain degree of reliability.  These wrongdoings cost the company over $14 M to settle charges.

One specific instance involved Orthofix recording revenue even when they gave their customers significant extensions of time to make payment. A company can recognize revenue from a transaction when the buyer of the company’s good or service agrees to a purchase, and the amount that the customer is going to pay is determined. By giving their consumers all this time to make their payments, the payments are fully determined, thus all the revenues should not have been recorded yet. These accounting failures make the company misstate data on their financial statement from 2011 to 2013. “Their accounting failures were so widespread that it caused them to make false statements to the general public regarding their financial condition”.

Orthofix violated the FCPA (Foreign Corrupt Practices Act) when their associates in Brazil used high discounts and made improper payments through third parties to solicit doctors employed by the government to use their products; fake invoices were used to facilitate this. All of this could have been avoided or contained if Orthofix had the proper internal controls in place and to ensure that proper payments were being made on their behalf to the correct individuals, and the right data was being recorded at the times times. Unfortunately, this was not the case. As a result, their sales were inflated.

Alex is an MBA with concentration in Accounting, and a Forensic Accounting Certificate, Class of 2017.

Reference:

https://www.sec.gov/news/pressrelease/2017-18.html

Posted by Basil Almubaddil.

On July 14, 2017, a renowned rapper by the name DMX pleaded not guilty to 14 charges against him concerning tax fraud. This was after he had spent a night in jail and later posted a $500,000 bond and he was released. According to the prosecutor, DMX whose real name is Earl Simmons had evaded $1.7 million in taxes during the peak seasons of his career from the year 2002 to 2005. “DMX allegedly went out of his way to evade taxes, including by avoiding personal bank accounts, setting up accounts in other`s names and paying personal expenses largely n cash.” The prosecutor clearly stated that no one  has the right to evade taxes regardless of title or fame. “Celebrity rapper or not, all Americans must pay their taxes.”

In addition, DMX was charged with failing to file tax returns from 2010 to 2015 in the United Bankruptcy Court. The bailed agreement argued that DMX is confined to the New York City area. However, his lawyer, Murray Richman, said that he was going to request permission for DMX to travel and perform his shows during the summer season that followed.

Mr. Simpson is quite a wealthy man.  This is because between 1998 and 2003, five of his albums ranked No.1 on the Billboard 200 chart. Mr. Simpson has also acted in various films like “Romeo Must Die” and “Belly” among other films. After the hearing on the charges against him, DMX told the reporters that his religious faith had been so helpful to him in dealing with legal troubles. “It`s allowed me not to be scared of the situation and face it head-on.” In addition, DMX told the reporters that his life was in God`s hands.

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

Reference:

Posted by Abdullah Aljammaz.

Two brothers have formerly owned a Pennsylvania defense contractor in Pittsburgh was sentenced to  prison after their involvement in a $6 million fraud was revealed. These two brothers planned to overcharge the U.S. Defense Department for Humvee window kits.

The two brothers paid the $6 Million back to the U.S government and another $6 Million to settle a lawsuit that the American government filed against the Buckners. Not just that, the brothers paid around one million dollars in interest and income tax losses.

According to Judge Arthur Schwab, they have different sentences. The older brother Thomas Buckner received the more laborious penalty, because he was more active in everyday business and more active than the other brother John, especially in 2007 after Buckner retired from the company’s management. The brothers owned half the company where the crimes happened. At the current time, the company was sold in February to new investors who had nothing to do with Buckner’s fraud.

Thomas Buckner, 68 years old was sentenced to two years and a half prison and a fine that he has to pay of half a million ($500,000). The other brother, John Buckner, 66 years old was sentenced to two years in prison and fined $300,000.

Assistant U.S. Attorney Nelson Cohen and defense attorneys agreed that it is possible to sentence the brothers below the forty-one to fifty-one months in prison. That sentence will be given to them due to their cooperation, and charitable works and their record of civic. On the other hand, Schwab rejected arguments by Alexander Lindsay Jr. Thomas Buckner’s attorney, who wanted probation.

Based on the article above, here are some quotes from the original article:

“A non-prison sentence is a bridge far too far in considering the defendant’s conduct,” Schwab said. “You don’t want to stand in front of a judge with a pile of money in the bank and the victim not paid in full,” Cohen told the judge. “Paying back the money is just the cost of doing business.”

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

Source:

http://www.foxbusiness.com/markets/2017/10/10/brothers-who-owned-defense-firm-sentenced-in-fraud-scheme.html

Posted by Katelyn Scott. 

Equal pay has been an ongoing issue with women in business in society today. Equal weekly earnings for full time workers did not improve from 2016- 2017 in the United States (Hegewisch). For some reason women can do the same job as men, yet their pay is not always the same. A female today could have the same qualifications as a male and still get paid less. Recently a gender equal issue was uncovered at the University of Denver. It seems that it has been a topic brought up before at the University, but the University turned a blind eye to fixing the reoccurring issue. At the University of Denver, seven law professors realized they were doing the same work as their male colleagues, but were getting paid almost $20,000 less than the male professors (Flaherty). When will women get justice in the workforce?

Furthermore, Lucy Marsh a longtime professor apart of the law school at the University started noting the pay gap. Stated by Colleen Flaherty, “Marsh told the EEOC in 2013 that she was paid less than all of her full-time, male colleagues — even those who were hired long after her” (Flaherty). This means it took 5 years to settle this case. The EEOC sued Denver for violating the Equal Pay Act and Federal non-discrimination laws. The EEOC also found evidence of pay gaps dating back to the 1970s and were even informed about these issues (Flaherty). Obviously the University did not fix the on-going issue. This lawsuit would not occur if the University fixed the pay gap when informed years ago, but unfortunately these seven professors had to face unfair compensation. Flaherty states “the university employed nine female full time professors whose average annual salary was about $140,000, compared to about $159,700 for male full professors” (Flaherty). The gap between a female and male professor with the same role is approximately $19,700. That’s not a small pay gap. It is unfortunate these woman had to fight for equal pay and were not getting the compensation or justice deserved with their time spent at University of Denver.

In addition, the University of Denver had to pay $2.6 million in a gender discrimination lawsuit involving the University’s Sturm College of Law (Rose). The University is also going to make significant changes to its law faculty compensation policies. This is great news considering the women finally get the justice they deserve. As a woman, I hope in the future gender discrimination is no longer existent. There are laws that grant gender equal compensation, but they should be taken more seriously and be closely watched in order to create a truly equal environment. Each of the women involved worked just as hard as the others there, where they were competing against men or other women. Some measures to improve the quality of jobs held by women are to tackle occupational segregation, enforce equal pay, and come up with more opportunities in the work place for women (Hegewisch). Hopefully one day gender equal compensation will one day be consistent.

Works Cited:

Flaherty, Colleen. “U. Of Denver Settles with EEOC, Agreeing to Pay $2.66 Million to Seven Female Law Professors Who Alleged Gender-Based Pay Bias.” Esports Quickly Expanding in Colleges, Inside Higher Ed, 18 May 2018,

www.insidehighered.com/news/2018/05/18/u-denver-settles-eeoc-agreeing-pay-266-million-seven-female-law-professors-who.

Hegewisch, Ariane, et al. “The Gender Wage Gap: 2017 Earnings Differences by Race and Ethnicity.” Institute for Women’s Policy Research, 7 Mar. 2018,

Rose , Johnathan. “DU Settles Unequal Pay Lawsuit, Will Pay $2.66 Million to 7 Female Professors.” Bizjournals.com, The Business Journals, 17 May 2018,

Posted by Justin Cunha.

The federal government’s rollback of many different rules has been a highly discussed topic throughout media, however one of the topics that is truly standing out currently is net neutrality. Net neutrality is a principle in which internet services have to treat all data equally and not charge consumers for any specific data. This was put in place by the Obama administration but was removed last year. The event created a lot of outrage as “more than 20 states” have challenged this decision in court (Kang). On Friday August 31, 2018, California lawmakers passed a bill that guaranteed full and equal access to the internet and is the fourth state to create a new net neutrality law.

The state put the bill in place in order to block internet services from slowing down, blocking, or charging for specific services. The bill not only reinstates net neutrality, but it is also even stricter than the one put in by the Obama Administration. The bill would prohibit promotions of free streaming for apps, something that telecommunication companies are pushing to endorse. Prohibiting the promotions would put businesses on a more even playing field, as there are many business who simply do not have the resources to put out these promotions. The change would also ensure that streaming websites all put out the same speed and quality without charging an extra price. These changes are all in an attempt to restrict the amount of power these services have over consumers and the industry. This would be California’s second major internet law in the last year, recently creating a privacy law that allowed users to ask companies such as social media platforms what data they are collecting on them. California is very influential to the rest of the world, with New York already considering a bill similar to this one. One example of the influence the state has was its auto emission laws which inspired many other states to follow in their direction, and in turn giving telecommunication companies worry that something similar will follow.

Though telecommunication companies are attempting to challenge this decision. The companies feel that having these strict rules put on them would hinder their ability to grow and develop. For example, the strict rules will hinder these companies from trying out different business models and thus hurts innovation. Such is the example with the promotion of free streaming for apps, as this was one major experimentation that these businesses wanted to try out. President of US Telecom even argues that, “The internet must be governed by a single, uniform and consistent national policy framework, not state-by-state piecemeal approaches” (Kang). This quote emphasizing that these telecommunication companies want to flow the singular federal law and that these states are simply complicating their business. The companies even went out to promise that they would not slow down or block any websites, a major concern that many consumers had. Telecommunication companies, just like California, do have a lot of influence and power that could possible stop this bill from being implanted. In 2017 they blocked a state broadband privacy bill and are looking to do the same with this bill.

Governor Brown has until the end of September to make his final decision on the matter, and sign his name on the bill. The bill is heavily consumer friendly attempting to give everyone equal access to the internet. This does restrict some freedom of these telecommunication companies, however some restrictions need to be put in place. Power can corrupt and promises can be broken, thus giving these companies too much power can be a scary prospect. So even though there are some flaws with this bill, since it is one of the strictest net neutrality bills, I do believe that California is making the right decision.

Source: https://www.nytimes.com/2018/08/31/technology/california-net-neutrality-bill.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business&region=rank&module=package&version=highlights&contentPlacement=1&pgtype=sectionfront

Justin is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2021.

In class, we discuss trademark and trade dress.  Ever open a can of Play-Doh and smell that distinct scent?  Well, now Hasbro has trademarked that scent.

“‘The scent of Play-Doh compound has always been synonymous with childhood and fun,’” said Jonathan Berkowitz, a senior vice president of global marketing for the Play-Doh brand. “‘By officially trademarking the iconic scent, we are able to protect an invaluable point of connection between the brand and fans for years to come.’”

Posted by Samantha Staudt.

One in five Americans have reported that they have skipped medicine doses or failed to fill a prescription each year because of the cost of the medicine.  This statistic is outrageous and states have to start doing something about it because the federal government will not.  Certain states, like Nevada, have passed a new law that manufactures must disclose more information about why drug prices are rapidly increasing.  In the past few year, prices in Nevada have increased as much as 325 percent, so this law will help regulate the prices of prescription drugs.  Maryland provides another example of steps that must be taken in an order to regulate drug companies.  The attorney general sued generic drug manufacturers whose prices rose more than fifty percent in a year.  States are partly responsible for the funding of the Medicaid program, spending more than 20 million dollars a year on prescription drugs for public employees and prisoners.

Drug manufacturers have recently pushed opioids while denying and misunderstanding their addictiveness.  This may be enough to cut the political power of the pharmaceutical industry.  This statistic is not settling well with anyone and more than 100 states have filed lawsuits against pharmaceutical companies related to tobacco.  This is in an effort to recover the costs of dealing with the epidemic of addiction and overdoses.  Oklahoma’s attorney general, Nolan Clay, is making strides to fixing this rising issue by refusing to accept donations from drug companies.

Of course, pharmaceutical companies fight the big changes that would affect the company.  The industry has been at the top of the lists for lobbying expenditures and campaign contributions at the same time managing to block reform proposals.  During Nevada’s fight to lower drug prices, drug companies hired more than seventy lobbyist to descend on the bill.  When state drug pricing bills pass, the drug industry challenges them in court.  There have been several lawsuits filed, but none have succeeded yet.  In order to prevent drug companies from overpricing prescription drugs, states must enforce regulation laws immediately.

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

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 Johnny A. Guerrero.

This article was published by the New York Times on 26 November 2017 and was written by Stacy Cowley.  The article illuminates the tension between a high-ranking government civil service official, Ms. Leandra English, and the President of the United States, Mr. Donald Trump.  To further understand this dilemma, one has to first comprehend what is “the Consumer Financial Protection Bureau” and what do they do.  For starters, the Consumer Financial Protection Bureau, “was created six years ago to oversee a wide variety of financial products, including mortgages, credit cards, bank accounts and student loans” (Cowley).  With this in mind, one can say that the bureau was a regulator created in the aftermath of the global financial crisis that hit the New York Stock Market Exchange harshly.  The “Regulatory Agency,” also referred to as (CFPB) was created by the Obama Administration to protect consumers from the tyrants of Wall Street.  Thus, the agency is charged with overseeing financial products and services, as noted.

The tension raised because Ms. English, the deputy director of the bureau, was not willing to step down from her post because she believed that the President could not fire or replace her.  So, she “filed a lawsuit late Sunday night on 26 November 2017 to block Mr. Trump’s choice of someone else from taking control of the agency on Monday morning, 27 November 2017” (Cowley).  Ms. English was defending her cause because Congress gave the agency infrequent independency and autonomy to protect it from political interference.  Thus, the bureau’s director “is one of the few federal officials the President cannot fire at will” (Cowley).  However, the President nominates the agency’s director, who is subject to the approval and confirmation of the United States Senate.  Ms. English was not nominated by former President Obama; she was appointed director by the agency itself because the director, Mr. Richard Cordray, brusquely stepped down on Friday 24 November 2017.

To add more fire to the already burning wood, Ms. English, a seasoned agency veteran who rose progressively through the agency’s ranks, was being replace by Mick Mulvaney, Mr. Trump’s budget director.  Paradoxically, Trump wanted someone who saw the bureau as “sad, sick, a joke” (Cowley), and who openly supported legislation to eliminate it, as the agency’s new director.  Ethically this is not right.  Why appoint someone who speaks harshly about the agency to be its head?  Mulvaney, a white-collar professional, many believed would undo what the bureau had achieved since its conception, which was to protect consumers from the abusive debt collectors and politics of Wall Street Financiers.  This notion becomes eloquent with Senator Dick Durbin’s, a Democrat from Illinois, metaphor: “Wall Street hates it (the Agency) like the devil hates holy water” (Battle for Control of Consumer Agency Heads to Court, New York Times Article).

However, even though one may think that the President’s choice is ludicrous, he as the Head of the United States Government has the authority to appoint whoever he wants as the head of any Federal Government Agency.  Ms. English did not have the grounds to veto the President’s decision; after all the actual director, Mr. Cordray, was the one who resigned.  Therefore, it is the President’s duty to appoint a new head leader for the agency.  The law regarding Presidential Nominees is clear, “not grey.”  One must hope that Mr. Mulvaney does a good job protecting the American People from the Wall Street Tyrants, as he swore to do.

Johnny is in the dual B.A/M.B.A program at the College of Arts and Sciences (political science, minor in history) and the Stillman School of Business (management and finance), Seton Hall University, Classes of 2018 and 2019.

Source:

Posted by Ryan Simoneau.

The National Law Review recently posted an article on February 20, 2018 discussing the impact of the N.Y. Court of Appeals decision in Forman v. Henkin, a personal injury case. Forman, the Plaintiff, claimed she suffered spinal and brain injuries when she fell off the Defendants horse. Before the accident, the Plaintiff admitted to having an active Facebook account on which she posted pictures of her active lifestyle. After the accident, she claimed her life changed and she could no longer continue her active lifestyle and could barely type coherent messages. During discovery, the Defendant asked the court to compel the Plaintiff to provide full access to her Facebook account, regardless of whether it was public or private. At trial court level, the discovery (or electronic discovery) request was limited to photos before and after the accident and those relevant to her difficulty to type. When appealed, the appellate court limited the photographs provided in court. The court based its decision on another case, Tapp v. New York State Urban Development Corporation, in which it decided, “[t]o warrant  discovery, defendants must establish a factual predicate for their request by identifying relevant information in plaintiff’s Facebook account- that is, information that contradicts or conflicts with plaintiff’s alleged restrictions, disabilities, and losses and other claims.” The Court of Appeals, however, disagreed. They determined that public versus private did not matter in regards to social media and reinstated the trial court’s ruling.

The Court of Appeals did not grant full access to the Plaintiff’s social media to protect her privacy, yet does not see a difference between public and private Facebook posts. Typically in personal injury cases, the Defendants will ask the court for full, unrestricted access to social media which is oftentimes unwarranted and called a metaphorical fishing expedition. The Court of Appeals held that the information compelled has to be “appropriately tailored and reasonably calculated to yield relevant information.” What this means is that the request cannot be overly broad and burdensome, but relevant. This ruling mimics Federal procedure, specifically Federal Rule of Civil Procedure 26.

I am torn on the fairness of treating all Facebook posts the same regardless of whether it is private or public. In the 21^st century, social media is becoming more and more popular. People utilize Facebook and Twitter as if they are personal diaries. Sometimes a physical diary could be relevant to a case, I’m sure, but it seems like an invasion of personal privacy. On the other end, social media utilizes the internet and the internet is not private so it should all be treated the same. I believe that in social media discovery (Facebook, Twitter, Instagram), the court should use this appeal as a precedent and continue to limit requests to what is relevant but privacy settings should not matter.

Ryan is an undecided business major at the Stillman School of Business, Seton Hall University, Class of 2020.

Link: https://www.natlawreview.com/article/ny-court-appeals-no-difference-between-private-and-public-posts-discovery

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 Wasif Rahman.

Voters in Washington, who have taken on a role to guarantee paid sick leave to those working in the state recently, brought the Paid Sick Leave Act into play. The new law calls for employers to give workers an hour of paid sick leave for every 40 hours that they have worked. It also restricts when employers would be able to demand medical documentation from employees. While the new law may seem ideal for those working in the State of Washington, it poses a major problem specifically for airlines and its passengers. The problem was first pointed out by Airlines for America earlier this month.

Requiring airlines to conform to the Paid Sick Leave Act for their flight crewmembers is problematic since they are already subject to employment laws of their home state. This new law would enable those same crewmembers to also take advantage of Washington’s employment laws, including the Paid Sick Leave Act, if they are to pass through the state during their shift. Airlines for America filed a lawsuit against the State of Washington in the U.S. district court and subsequently released a statement noting, “airlines cannot operate their nationwide systems properly if flight crews are subject to the employment laws of every state in which they are based, live, or pass through”[1]. The defendant, the Department of Labor and Industries for the state of Washington, made no remarks on Airlines of America’s statement. Airlines for America suggests that Washington’s law promotes, to some degree, more crewmembers calling in sick as the airlines would have certain limitations to when they would be able to demand medical documentation to verify whether a crewmember is actually sick or not. They claim that if it gets to a point where enough crewmembers are calling in sick, it would lead to flights either being cancelled or delayed since there wouldn’t be enough flight crewmembers to serve the passengers. This would lead to severe disruptions not only at Sea-Tac International Airport in Washington but across all airports through out the country. From the airlines standpoint, it would be detrimental to their business having to tell their customers & passengers that they cannot serve their needs. Airlines also claim this new law violates the constitution.

Ultimately, this law is unfavorable to airlines as their passengers would have to face an increase in cost & time for their travels. On top of that, passengers are not purchasing these tickets for the flights to be cancelled or delayed. This isn’t only a major inconvenience for airliners but also for passengers. As of now, a few of the other airlines that have sued Washington State include JetBlue, United and Southwest.

Source:

[1] http://www.foxbusiness.com/markets/airlines-sue-over-new-washington-state-sick-leave-law

Wasif is a mathematical finance major at 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/

Donald Trump’s tax plan will make it more simple to pay the government. There are four tax rates under the plan: 25%, 20%, 10% and 0%, eliminating most deductions. The death tax will be eliminated.

According to the website, “The Trump plan eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page form saving them time, stress, uncertainty and an average of $110 in preparation costs. Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money.”

Small business should see some relief. Under the new proposed law, all businesses will be paying the same rate. “No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes. This lower rate makes corporate inversions unnecessary by making America’s tax rate one of the best in the world.” A corporate inversion occurs when a U.S. company incorporates in another country to avoid paying high taxes here on income not earned in the U.S.

The Ninth Circuit affirmed a ruling against Gotham Garage, a maker of replica automobiles from movies and television shows. Gotham Garage sells a “Batmobile,” which looks like the original. DC Comics claims it owns a copyright in the Batmobile and the design is protected intellectual property. The Ninth Circuit ruled the Batmobile’s appearance and other distinct attributes make it a “character” that cannot be duplicated without permission from its owner. “As Batman so sagely told Robin, ‘In our well-ordered society, protection of private property is essential,’” 9th Circuit Judge Sandra Ikuta, writing for a unanimous three judge panel stated in her opinion.

Larry Zerner, an attorney for defendant, said he was disappointed in the ruling. He argues the law states that automobile designs are not subject to copyright. “My client just sells cars,” Zerner said. “The car is not a character. The car is a car.”

The replica automobiles sell for $90,000 each.

The Justice Department may soon reveal the details of a criminal settlement with GM over its failure to recall vehicles with defective ignition switches. The deal will require GM to plead to wire fraud and pay a penalty of approximately $1 billion. “GM is expected to enter a deferred prosecution agreement under which the government will eventually seek to dismiss the case if the company abides by the deal’s terms, according to the people familiar with the matter.”  Corporations, even though they are not natural persons, can be found guilty of crimes and be fined.

The claim is over the ignition switch, which can slip out of the run position and disable airbags, power steering, and brakes. The Justice Department alleged GM failed for over a decade to warn drivers of the safety issue even though GM knew about the problem. In one estimate, more that 100 people died and more than 200 were injured as a result of the switch failing.

A federal court has ruled that the House of Representatives, collectively, has standing to sue the Executive Branch over a provision in the Obama-care legislation dealing with cost-sharing subsidies. These subsidies are intended to help lower income people with their deductibles and co-pays. “Many legal observers expected the lawsuit to fail on standing: that Congress wouldn’t be able to show a way in which the Obama administration had harmed legislators, a prerequisite for a court challenge.”

House Republicans argue these subsidies are being illegally paid by the Treasury to insurers and claims the House “never appropriated” the funding. The House alleges it “has been injured, and will continue to be injured, by the unconstitutional actions of defendants . . . which, among other things, usurp the House’s legislative authority.”

Courts hear cases and controversies, and unless a plaintiff has sustained some type of injury, courts cannot take the case and will dismiss it for lack of standing. But here, the court found the House has standing to sue because they are allegedly harmed as an institution, not as individual members. The court held, “The Congress is the only body empowered by the Constitution to adopt laws directing monies to be spent from the U.S. Treasury. . . . Yet this constitutional structure would collapse, and the role of the House would be meaningless, if the Executive could circumvent the appropriations process and spend funds however it pleases. If such actions are taken . . . the House as an institution has standing to sue.”

Posted by Dana Domenick.

A four year old boy was riding in his aunt’s 1999 Jeep Cherokee when it was rear-ended in 2012. He was killed when the SUV burst into flames. The gas tank on this Jeep Cherokee model is located behind the rear axle which means when the truck is hit from behind, it will likely trigger an explosion. The location of the gas tank is a major flaw in the truck and caused over 75 deaths. Fiat Chrysler took action on this issue in 2013, by recalling over 1.56 million Jeep Cherokees manufactured from 1993-1998 (Associated Press).

Judge J. Kevin Chason in Decatur County, Georgia ordered $40 million in damages to the child’s family. Three fourths of the damages were given to the family for his death while the other portion was given for pain and suffering. Fiat Chrysler requested a new trial, claiming that the jury acted irrationally and their prejudice tainted the verdict. Their motion was denied by the judge (Associated Press).

I agree with the court’s decision. The engineers who built these Jeeps should have had enough knowledge to place the car’s parts at locations in which they were protected. Extensive road testing should have been conducted on every vehicle to play out every possible collision scenario to ensure that the quality of the vehicle met the highest efficiency and safety standards. This death, as well as the many others caused by this issue, could have been prevented had Fiat Chrysler took their road testing more seriously and therefore, the verdict was correct.

Dana is a psychology major with a legal studies in business minor at Seton Hall University, Stillman School of Business (minor), Class of 2017.

Posted by Kevin Pereira.

This past Thursday, the F.B.I. arrested Benjamin Wey at his home located in Manhattan. He was charged for “securities fraud, wire fraud, conspiracy and money laundering in an eight-count indictment unsealed in a federal court in Manhattan.” In addition, Mr. Wey had already been arrested for sexual harassment a couple months prior to this incident. Mr. Wey was making Chinese companies public in the United States using a process known as a reverse merger. To explain, a reverse merger is a way for private companies to go public by buying the “shell” of a public American company.

Mr. Wey fulfilled this fraud by involving his family members and close friends. He portrayed the Chinese companies he was taking public to be mature and prosperous so that inventors were fooled into thinking that they were successful corporations in the NASDAQ stock market. Therefore, many clueless investors were investing into these masked corporations, which were being upheld by his family members. In addition, Mr. Wey’s banker, Seref Dogan Erbek, was helping falsify the “sales, volume, demand and price of the shares of the companies they took public.” The SEC in a civil complaint charged Mr. Erbek, Mr. Wey’s wife, his sister, and two lawyers as being part of the fraudulent matter.

Mr. Wey was inflating the prices of the shares by trading them between his family and friends. By doing this, the sudden increase in price attracted many eager investors. Once Mr. Wey had an audience, he would sell the inflated shares and generate millions of dollars. The money he was making would be sent to bank accounts offshore in Japan and Switzerland. Mr. Wey’s family members would then transfer the money back into the United States, stating it was a gift.

Kevin is a marketing major at Seton Hall University, Stillman School of Business, Class of 2018.

Fox News’ Harris Faulkner, co-anchor of the daytime show Outnumbered, sued Hasbro toy company for $5 million. Hasbro sold a toy hamster named the “Harris Faulkner Hamster Doll” as part of their “Littlest Pet Shop” product line.

In the complaint, Faulkner alleges unfair competition under the Lanham Act and common law violation of right to publicity. She claimed she is “distressed” that her name would be associated with a toy that indicates it could be a potential “choking hazard” to children, and that portraying her as a rodent is demeaning and insulting.

She further claimed that since as a journalist she cannot be connected with a commercial product, “Hasbro’s use of her name in association with the Harris Faulkner Hamster Doll creates the false impression that Faulkner would impugn her own professional ethics by agreeing to have a commercial product named after her.”

Bank of America (“BofA”) recently settled with the U.S. Consumer Financial Protection Bureau and Office of the Comptroller of the Currency for deceptive credit-card practices.  BofA is ordered to pay $727 million in refunds to customers and $45 million in penalties.

The allegations were BofA induced customers to purchase certain add-ons, such as identity-theft protection, debt cancellation, credit monitoring and credit reporting services.  Some services were superfluous since they were already mandatory under federal law. Others were never received by the customer.

The allegations included BofA defrauded 1.4 million customers through “deceptive marketing” practices, and about 1.9 million customers were illegally charged for credit monitoring and credit reporting services that were not provided.

Richard Cordray, Director of Consumer Financial Protection Bureau, stated, “Bank of America both deceived consumers and unfairly billed consumers for services not performed.  We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

Posted by Kesha Patel.

In 2012, four employees of tech giant Apple filed a lawsuit against their employer in San Diego. Apple allegedly failed to give their employees proper meal and rest breaks in addition to not paying them in a timely manner. In 2013, the case became a class action lawsuit that included about 21,000 employees who had worked at Apple between 2007 and 2012.

California law states that any employee that works for five hours or more must get a thirty-minute meal break; any employee that works for four hours is required to get a 10 minute rest break.

Jeffrey Hogue, an attorney representing the class action said the $2 million verdict had came but Apple could owe more. Although Apple made scheduling changes in 2012, the aura of secrecy keeps its employees from discussing the company’s working conditions.

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

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 Brennan Smith.

A judge, a deputy constable, and a supervisor of all police, fire, and emergency operations walk into a bar…

Although a common play on the setup of a hysterical joke, the indictment of John I. Waltman, Robert P. Hoopes, and Bernard T. Rafferty is not something the members of Bucks County and Lower Southampton Township are laughing about. The three men named are the judge, supervisor, and deputy constable—respectively—referenced above, who just got indicted for money laundering.

Here’s what happened: “The trio conspired to launder about $400,000 in funds represented by investigators to be the proceeds of health care fraud, illegal drug trafficking and bank fraud, according to a federal court indictment unsealed Friday morning, a statement from the U.S. Attorney’s Office said. The men allegedly took laundering fees of $80,000,” (theintell.com). In order to launder the money, the trio went through a series of processes. One source of revenue, and by far the most prominent one, was through Raff’s Consulting LLC—a company with which Rafferty had full control—with which the three used “bogus documents” in order to turn a profit.

To understand how they did this, the facts of the case must be examined. Per the research done by theintell.com, Robert P. Hoopes would arrive to an office building in an unmarked Lower Southampton Township Police car, exchange the false documents for $100,000 cash, and bring the money back to the car (where John I. Waltman and Bernard T. Rafferty would be waiting). From there, Waltman and Rafferty would go to the Philadelphia Credit Union to deposit the money—after paying Hoopes and pocketing their own cuts—into the Raff’s Consulting LLC accounts. The operation lasted from June 2015 to November of 2016 with the trio laundering $400,000 between June and August of 2016—earning $80,000 in laundering fees (Philadelphia.cbslocal.com).

Because of their crimes, the FBI was forced to get involved and finally caught them in an undercover sting. The three will each face one count of conspiracy to commit money laundering, and three counts of money laundering. District Judge John I. Waltman has been suspended without pay, with the other two removed from their positions.

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

Sources:

http://www.theintell.com/news/crime/bucks-county-district-judge-constable-lower-southampton-public-safety-director/article_f23e17b6-f07a-5e1b-8abb-6edf11a47ecc.html

(Article)

http://philadelphia.cbslocal.com/2016/12/16/authorities-judge-director-of-public-safety-deputy-constable-charged-with-conspiracy-money-laundering/

(Article)

Posted by Carlos R. Rodriguez.

The article “Ex-U.S. Tax Court Judge, Husband Indicted in Tax Case” written by The Associated Press mainly discusses the topic of how a former U.S. Tax Court Judge, Diane Kroupa and her husband, Robert Fackler have been charged with conspiracy to defraud the United States, tax evasion, making and subscribing false tax returns and obstruction of an IRS audit, U.S. Attorney Andrew Luger announced. The charges were brought in Minnesota and allege that the couple conspired to evade at least 400,000 dollars in federal taxes. In a statement, U.S. Attorney Andrew Luger stated that “Tax laws apply to everyone, and those of us appointed to federal positions must hold ourselves to an even higher standard.”

Diane Kroupa was served as a tax court judge by then-president George W. Bush in 2003 and retired in 2014. The charges brought on her and her husband allege that between 2004 and 2010, the couple understated their taxable income by about $1 million and they owe at least $400,000 in taxes. Also, federal prosecutors accuse Kroupa and Fackler of fraudulently deducting at least $500,000 of personal expenses they listed as expenses at Fackler’s consulting firm, and another $450,000 in purported business costs for which clients had reimbursed Fackler, the Star Tribune reported. Kroupa also failed to report about $44,520 that she received from the sale of land in 2010 in South Dakota instead of claiming it as an unrelated inheritance which was stated in the court documents.

In my opinion, as a Tax Court judge, Diane Kroupa should be held to a higher standard of ethics. Also, any tax cases for which she was present should be investigated because Diane’s judgment is clearly out of line if she is found guilty for these charges. Given her comprehensive understanding of tax laws, it should be obvious to her that reporting personal expenses as business expenses is a way to defraud the IRS and it was done intentionally in order to evade taxes. Going forward, a solution to an issue of this nature should be that government officials should be checked for things like tax evasion more often because if their moral judgment is incorrect, their decisions can be detrimental to the country as a whole.

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

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 Joseph Locorriere. 

The fundamentals of business, something that America has practiced for decades and which was proven to be the correct way of managing a business, include running an ethical business, such as taking proper care and recognition of employees and customers as well as the surrounding environment. However, as America continues to stray farther from these values, businesses continue to find themselves in situations which is tantamount to malpractice. It is no longer as common to see businesses acting ethically as it was like years in the past, mainly due to short run profit maximization. Morgan Stanley, one of the top banks in the country has once again acted unethically towards customers. Like many instances, this business was focused on volume of sales and not ethics, also considered short-run profit maximization, due to the sole fact of making as much money as possible without concern of the public good.

Similar to the 2008 occurrence of selling faulty loans such as NINA loans (No Income, No Asset) or sub-prime mortgages that intentionally fooled the buyer into thinking they would afford their mortgage, Morgan Stanley sold Security Based Loans (SBLs) to customers, allegedly breaching their fiduciary duty. Brokers were incentivized by a $5,000 bonus for meeting loan quotas, which was intended for boosting the companies’ volume of sales. By incentivizing the employees with a bonus they disregarded customers overall satisfaction; instead they focused primarily on volume. Although Morgan Stanley boosted their profits by $24 million in new loan balances, they are being taken to a court of law for business malpractice. Morgan Stanley states that, “The securities-based loan accounts were opened only after discussing the product with each client and obtaining their affirmative consent” (Zacks.com). Although this may stand true, it still violated Morgan Stanley’s fiduciary duty to customers of informing them of their investment.

It is unfortunate to see businesses continue to perform unethically towards customers, as well as employees. Longevity, reputation and long-run profit maximization are no longer commonly displayed. Morgan Stanley in this case should have stayed with giving a bonus, but should have not forgotten about the fundamental values they hold as a broker, which is to inform clients on investments, whether it be positive or negative news. Sadly enough, this is another example of America’s current business strategy that fails to be aware of the public good.

Joseph is a finance student at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Matthew Rachek.

One of the biggest issues that industries of all kinds deal with constantly is being able to filter out counterfeits from their marketplace. Counterfeits and other forms of knock-offs are not good for the market because they drive profits away from those that deserve the reward and often times fund criminal organizations.

The music industry has dealt with counterfeits since its existence. With the continued growth of technology and new ways for consumers to listen to their favorite artists, it has become harder and harder for the in the industry to regulate how the money is coming in. In fact often times, counterfeit CDs or knock-off streaming services do not compensate the artist at all.

In an article published in the Wall Street Journal on October 30, 2016, it explained how these music “pirates” have been flooding online retailers such as Amazon.com, “with counterfeit CDs that often cost nearly as much as the official versions and increasingly are difficult to distinguish from the real goods.”

The good news is that Amazon.com has recognized the problem an is making the right ethical decision by making sure that their stakeholders all receive the product they are expecting to receive at checkout. By doing this they are also trying to ensure that the artist and producer of the music receive proper compensation for their work so that the money does not make its way into the hands of the music pirates.

In a statement released by Amazon.com they wrote, “We are constantly innovating….to improve the ways we detect and prevent counterfeit products from reaching our marketplace. We work hard on this issue every day….” One of the ways they ensure that customers, a stakeholder, is satisfied with their product is by offering refunds for any product that is not as advertised. While this may initially hurt Amazon.com’s bottom line this is an essential moral decision because in the long-run consumers will be more likely to trust Amazon.com and buy other products off the site.

As technology continues to find new innovations it is almost certain that counterfeits and pirates will new be completely taken out of the market place, especially in the music industry. However it is very reassuring for a large company like Amazon to take nope of the issue and try to take steps to solve the issue.

Matthew is an accounting student at the Stillman School of Business, Seton Hall University, Class of 2018.

Sources:

http://www.cbsnews.com/news/amazon-struggling-to-keep-counterfeits-off-market-retailer-says/

http://www.wsj.com/articles/boost-in-online-pirated-cd-sales-deal-another-blow-to-music-industry-1477867243

Posted by Emanuel Sanfilippo.

On Monday the 28^th, Diane Backis, a corporate accountant in New York, admitted to stealing at least $3.1 million from Cargill Inc., an agricultural business giant. In doing so, Backis caused $25 million in losses to Cargill’s grain shipping operations at the Port of Albany according to the Associated Press. Diane Backis pleaded guilty in federal court in Albany to mail fraud and a false income tax return. According to U.S. Attorney Richard Hartunian, Backis diverted customer payments to her own accounts over a 10 year period and caused $25 million in losses to Cargill Inc.

“Backis, 50, was an accounting department manager at Cargill’s Albany grain elevators at the port whose duties included creating customer contracts, generating invoices and processing payments.” Backis admitted in court that she sent customers invoices for animal feed prices much lower than what her employer paid, in doing so, she caused the company millions of dollars in losses in inventory. She tricked consumers into sending the payments directly to her bypassing Cargill’s corporate controls. In an essence, Diane Backis basically used her ability to access inventory and money from Cargill to sell their inventory privately for personal profit.

The Associate Press states how the tax fraud charge refers to Backis’s 2015 individual income tax return on which declared $61,208 in income and omitted more than $450,000 she received that year from stealing Cargill customer payments. In accordance with Backis’s guilty plea, she has to pay $3.5 million in restitution to Cargill and she has to forfeit her house, an investment brokerage account and her pension benefits from Cargill. According to Pete Stoddart, a Cargill spokesperson, Cargill has audited its controls and trading systems and confirmed that it was an isolated incident only affecting that one location and Cargill customers were not adversely affected. Diane Backis faces up to 20 years in prison when she’s sentenced on March 28^th.

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

Members of organized crime, drug dealers, and terrorists transact their “business” in cash to hide their tracks. As part of a scheme to launder money (make it look it was earned legitimately), criminals will deposit their ill-earned cash in bank accounts. In response, Congress passed the Bank Secrecy Act, requiring banks to assist the government in catching money launderers.

Under the Act, banks are required to report any cash transaction or combination of cash transactions in excess of $10,000 to the IRS.  Knowing this, criminals resort to structuring. Structuring is the deliberate parcelling of a large cash deposit into a series of smaller transactions in order to avoid detection by regulators. When bank officials suspect structuring is occurring, they are required to file a suspicious activity report, or SAR, and notify regulators of what they believe is happening.

In Ratzlaf v. United States, 510 U.S. 135 (1994), the Supreme Court found that government had to prove that defendant acted with knowledge that structuring is unlawful. As a result, Congress removed the “willfulness” requirement making it easier for the government tor prosecute structuring cases. The IRS, however, has been seizing assets of legitimate businesses and individuals without any proof or any charges filed. Small business and individuals can be a target. In one case, the IRS seized $66,000 from an Army sergeant’s college savings account, even though the sergeant was told by the bank teller to make smaller deposits in order to avoid taxes. Removing the “willfulness” requirement makes structuring a strict liability crime.

In a written statement, Richard Weber, the chief of Criminal Investigation at the IRS, said, “After a thorough review of our structuring cases over the last year . . . IRS-CI will no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of field operations (D.F.O.) level.”

Posted by Deena Khalil.

There are two sides of every story. According to Kelly Wallace who works for CNN, “It’s a case of she said versus they said.”

Rachael Cunnings, a young girl from New Jersey, accused her parents of throwing her out of their house when she turned eighteen. They refused to pay for her private school tuition, and so she sued them for expected future expenses, such as transportation, bills, college tuition, and living expenses.   The teen’s parents argue “that she was not kicked out of the house. Instead, they say she left on her own back in October because she didn’t want to abide by their rules.” There were many claims against each side, such as Rachael’s parents not liking her boyfriend, missing curfews, getting suspended, and apparently the teen’s parents were abusive.

The judge in the New Jersey Superior Court denied Cunnings request for high school tuition and living expenses. “The judge sounded skeptical of some of the claims in the lawsuit, saying it could lead to teens ‘thumbing their noses’ at their parents, leaving home and then asking for financial support.” There was another hearing that took place the following month about other issues in the case including her college expenses. Before the hearing, Rachael dropped the case; she was accepted by Western New England University with a $56,000 scholarship. In the end, the teen did not end up empty handed.

Deena is a finance major at Montclair State University, Class of 2017.

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.

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 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 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 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.

The United States Supreme Court granted certiorari in Equal Employment Opportunity Commission v. Abercrombie & Fitch Stores, Inc.  Abercrombie allegedly denied a muslim woman a job at a Tulsa, Oklahoma store during an interview.  She was wearing a headscarf, which Abercrombie determined violated its “look policy.”  The “look policy” at the time was classic East Coast collegiate style.

The 10th Circuit Court of Appeals sided with Abercrombie ruling the muslim woman never indicated she needed a religious accommodation as required under federal law.  The EEOC argued Abercrombie was on notice that an accommodation was warranted because the woman was wearing the headscarf at the interview.

Under Title VII of the Civil Rights Act of 1964, a business operating with less than 15 employees (religious institutions exempted) must provide an accommodation for an employee’s religious observances, unless doing so is an undue burden for the company.  Examples of undue burdens could include, but are not limited to, costing the company more than ordinary administrative costs; workplace efficiency diminished in other areas of the business; infringing upon another employee’s job rights or benefits; impairing workplace safety; adding burdens on co-workers by forcing them to carry on the accommodated employee’s share of potentially hazardous or burdensome work; or conflicts with another law or regulation.

The High Court will decide the case next year.

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.

The Securities and Exchange Commission charged three software company founders with insider trading and forced them to disgorge $5.8 million in illegal profits, penalties and interest.  Insider trading occurs when people in high levels of management trade company securities based on non-public information.

Lawson Software’s co-chairman, Herbert Richard Lawson, tipped his brother and a family friend (both retired from the company in 2001) about the probable sale of the company to Infor Global Solutions, a privately held software provider.  While negotiations were occurring, the media learned of a possible merger.  Lawson Software’s stock price began to climb based on analyst reports of a possible bidding war with more than one company considering acquiring Lawson Software.  The reports were predicated on an article indicating that Lawson Software conducted a “market check” through its financial advisor to see if there were any other companies interested in a merger.

But Infor Global was the only company interested in buying, as the market check produced “little-to-no interest.”  Lawson Software notified the public that Info Global offered to pay $11.25 per share, however, the media was still reporting incorrectly that other companies were interested in acquiring the company and that the merger would likely be for $15-16 per share.  Those companies listed in the media reports were actually the same companies that declined purchasing Lawson Software in the market check investigation.

The SEC charged defendants both knew the reports were false and Infor Global would not increase its offer any more than $11.25.  But in face of that knowledge, Lawson, his brother and his friend sold shares of the company for approximately $1 over Infor Global’s price, pocketing millions.  Defendants agreed to disgorge the profits and “to the entry of final judgments enjoining them from future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5.”

An associate director in the SEC’s Division of Enforcement stated, “Richard Lawson conveyed material information that was contrary to what was being publicly reported, and his brother and friend made a windfall when they subsequently sold their company shares at inflated prices.”  He further stated, “When news surfaces about the possibility of a merger and details of the media reports are incorrect, it is illegal for insiders who know the true facts to trade and profit.”

One of the causes of action a plaintiff can bring in a product’s liability lawsuit is a defective design claim. General Motors is facing multiple lawsuits over faulty ignition switches installed in the following vehicles: Chevy Cobalt (2005-2010) and HHR (2006-2011); Pontiac G5 (2007-2010) and Solstice (2006-2010); Saturn Ion (2003-2007) and Sky (2007-2010). More than 2.6 million have been recalled.

A Georgia couple who settled a lawsuit with GM for their daughter’s death is suing again on the grounds that GM’s lead design engineer lied when he testified he had no knowledge of any design “changes” to the switches. Their daughter was killed when her 2005 Cobalt slipped into accessory mode, cutting off the engine and causing her to collide with another vehicle. Her family settled based on this information.

But in recent disclosures to the National Highway Traffic Safety Administration and Congress that testimony appears to be false. The company apparently knew about the problem for years. Now, the family has filed another lawsuit claiming they would not have settled if they had known that evidence was concealed. GM denies the accusation.Settlements are contractual, and therefore, considered final once the parties agree to the terms.  Like all contracts, there are certain situations where a settlement agreement would be deemed void.  In this case, plaintiffs would have to convince a judge that they were somehow misled or defrauded by what GM did or said in order for the settlement to be void and the case to proceed.

Criminal law is certainly an important part of the study of business law, and Fourth Amendment questions always seem to come up in class.  Students are very interested in learning about when the police can search a person’s car, office or home, or when and where can they arrest someone. Generally, police need a warrant either to search a person’s property or to arrest, unless it falls within a constitutional exception.

Most students do not know that there is a difference between an arrest warrant and a search warrant.  An arrest warrant is an order by the court directing a sheriff, constable or police officer to find and arrest a person who is wanted for a crime.  In contrast, a search warrant permits a law enforcement officer to search a person’s place of residence or other location for evidence of a crime.  An arrest warrant, however, does not permit the police to search a home or building for a person where the police reasonably believes the person named in the arrest warrant may be found without the consent of the owner.  The question then becomes whether there are any other times police may enter certain areas of a third-party home and search for a person even though they are only acting pursuant to an arrest warrant.

In the New Jersey Appellate Division decision, State v. Craft, 425 N.J. Super. 546 (App. Div. 2012), Judge Graves held that exigent circumstances permitted the police to enter a bedroom of a third-party home to arrest defendant for a shooting even though they were operating solely under the authority of an arrest warrant.  The facts are as follows.

The Newark Police Department’s Fugitive Apprehension Team is responsible to dispatch officers to certain addresses where fugitives may be found based on certain intelligence.  James Craft was wanted for a shooting.  Officers arrived at the location noted in the arrest warrant.  It was a three-family dwelling located on South 13th Street.  The police believed that defendant was residing there with family on the second-floor.

The front door to the residence was open, and the police proceeded to the second floor.  The officers were in plain clothes, but at least one of them was wearing a badge around his neck. Defendant’s mother opened the door and permitted the police to enter.  The officers told defendant’s mother that they had a warrant to arrest her son. Defendant’s mother told the police that her son was not there, but offered to call him on her cell phone.  Upon dialing the number, the police heard a phone ringing behind a bedroom door. The officers believed it was defendant’s cell phone ringing and that he would most likely be in the bedroom.

When they opened the bedroom door, they found defendant attempting to escape.  The police testified they saw defendant drop a handgun as he climbed through the window.  They also discovered five vials of cocaine in plain view on the top of a dresser.  Defendant was arrested and charged.  The trial court suppressed the evidence finding that the “coincidence of a phone ringing” was insufficient evidence to justify entry into the bedroom without a search warrant and that the police did not have an “objectively reasonable belief” that “defendant both resided at and would be found at” his mother’s apartment.

On appeal, the court reversed, holding that “there was no constitutional violation by the police, and it was error to suppress the items that were seized. The arrest warrant provided probable cause for defendant’s arrest; the officers entered the apartment with [defendant’s mother’s consent]; and [the police] had reason to believe defendant was present in an adjoining room when a cell phone began ringing after [defendant’s mother] called her son.  In addition, the officers knew the arrest warrant was for ‘a shooting’ and, therefore, defendant was potentially dangerous.  Under these circumstances, there was a compelling need for immediate action to apprehend defendant, and it was impracticable for the officers to obtain a search warrant.  Thus, their entry into the bedroom was objectively reasonable, and the items seized were in plain view.”

Here, the exigency to protect persons inside the home from being shot by a potentially armed individual excused the police from failing to consider the possible “coincidence” of the phone ring. According to one of the officers, upon hearing the phone ring at the time defendant’s mother dialed, he reasoned since people generally stay close to their cell phones, he would find defendant next to his.  As a result, the search into the bedroom was reasonable.

Posted by Katie Kim.

On Thursday, Martin Shkreli, a 32 year-old pharmaceutical executive, was arrested by the federal authorities on securities and wire-fraud charges stemming from an alleged Ponzi scheme he ran as a hedge-fund manager. What the young executive was doing was taking out loans from investors to start a new pharmaceutical company and using that money to pay off his debt from his hedge-fund. Martin Shkreli committed “fraud in nearly every aspect of hedge-fund investments and in connection with his stewardship of a public company,” said the director of enforcement at the Securities and Exchange Commission, Andrew J. Ceresney.

Shkreli was already notorious for price-gouging during his time at Turning Pharmaceuticals. His idea was to acquire decades old drugs and raise the price of it to $750 from $13.50 per pill. The current charges are not related to Shkreli’s work as chief executive of Turing Pharmaceuticals.

The federal authorities say that Shkreli was running three schemes that had connections to one another, he defrauded investors and used stock and cash from an unrelated pharmaceutical company to cover up the money he lost. The Brooklyn US attorney filed a seven-count criminal indictment and the Securities and Exchange Commission filed a related civil complaint on alleged securities fraud against Shkreli. Federal officials painted Mr. Shkreli’s business dealings as “a securities fraud trifecta of lies, deceit and greed.”

Shkreli was released on a $5 million bail, secured by a bank account and his father and brother. The authorities also arrested Evan L. Greebel who served as an outside counsel to Retrophin, the company Shkreli previously worked for. Shkreli treated Retrophin like his “personal piggy bank” where he used $11 million to pay back shareholders of MSMB funds.

Katie is an accounting/finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Katie Kim.

In the technology industry, two leading companies may be heading to the Supreme Court over the design of smartphones. There is no confirmation of whether or not the case will be accepted, but the Supreme Court has not taken a design patent in over a century.

A few weeks ago, Samsung agreed to pay Apple $548 million in damages over a design patent but did not agree to it as part of a settlement. Apple took Samsung to court on the grounds that Samsung intentionally and knowingly copied Apple’s iPhone designs. Apple prides themselves on their innovation and when the threat of copycats infringe on their innovations it takes away from their profits. Apple submitted evidence that showed the evolution of the Samsung product increasingly resembled the Apple iPhone

At trial, Apple convinced the jury that some of the designs Samsung used on their smartphones, like the rounded rectangular corners and touch screen made of smaller icons, were taken from and patented by Apple.

On the other hand, Samsung argued that the law under design patents was misapplied. The law is meant to protect “ornamental” features that are not part of the products intended function. Samsung lawyers feel that this should have been made clear to the jury.

On Monday, Samsung filled an appeal to the Supreme Court. The company argues that the legal framework behind designed patents is flawed and out dated for the modern digital world. “The law was written for a time long before the smartphone was invented,” said Mark A. Lemley, a law professor and director of the Stanford University program in law, science and technology. If Samsung is left to stand with a sweeping rule against it then it will “lead to absurd results and have a devastating impact on companies.”

Katie is an accounting and finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Stephen D’Angelo.

Just six hours after New York Attorney General placed a temporary injunction, which would stop sites like Fanduel and DraftKings from doing business in New York, an appellate court saved them by issuing an emergency temporary stay that will allow New Yorkers to continue to use Fanduel and Draft Kings until further notice. This stay will last at least till the end of the year which is likely when a permanent decision will be made, “Eventually, both sides will go before a panel of four or five appellate judges” Randy Mastro said, from an outside council for DraftKings.

The State of New York is likely to win the case because of the wording of their law on gambling. Fantasy football gambling sites commonly use the defense that they don’t take wagers, they take entry fees. In many states, this allows them to continue to do business. But, New York is stating that their penal law does not refer to “wagering” or “betting.” Instead it states that a person, “risks something of value.”

Although New York has the upper hand, the laws in place are very vague. The statement regarding risking something of value had no relation to online fantasy sports gambling when created. It was worded this general because that would include gambling bookies in a gambling law. I personally do not believe that Fantasy sports gambling will be shut down in New York. The NBA, NHL, and MLB all own equity in Fanduel and the likelihood of the 600,000 New Yorkers who play daily fantasy to not be able to in the New Year is very slim.

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

Posted by Stephen D’Angelo.

Friday morning, two days after the judge presiding the Uber class action lawsuit decided that drivers attempting to arbitrate can be included in the law suit, Uber sent drivers a new agreement. The document undermined the judge’s ruling by revising the arbitration clause.

Liss-Riordan and her team are filing an emergency motion that will be heard in front of Judge Edward Chen next Thursday; it asks the court to block Uber from enforcing this new driver agreement. “Uber has tried to fix the problem that Judge Chen ruled made the agreement unenforceable,” Liss Riordan told TechCrunch in an email.. The Private Attorney General Act gives “a private citizen the right to pursue fines that would normally only be available to the State of California. It also allows that private citizen to “seek civil penalties not only for violations that he personally suffered” but also for violations of “other current or former employees.”

According to Chen’s Wednesday ruling, the Uber driver agreement of 2014 and 2015 illegally waived drivers’ rights under PAGA, which informed Judge Chen’s decision that the arbitration clause could not be honored because it contained an illegal provision. This was the reason for the provision of the agreement, to quickly remove the illegality and include new provisions to the agreement.

The Private Attorney General Act protects uber drivers from what uber has tried to prevent, a large action against the company. Uber has agreed to resolve any claim against the company but only on an individual basis. Uber’s driver agreement provision also attempts to prevent workers from participating in any class collective or representative action against the company. Uber also rewrote the agreement to remove a requirement that arbitration between a driver and the company remain confidential. The language makes it clear that the agreement goes into effect only when a driver accepts it  not when a revision is published, therefore, protecting drivers who previously signed the agreement.

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

Posted by Dan Udvari.

On December 3, 2015 Donald L. Blankenship – the CEO of Massey Energy, Co. – was convicted of a single misdemeanor for conducting a conspiracy to violate safety rules in his coal mines just before the Upper Big Branch Mine disaster that occurred on April 5, 2010.

Massey Energy was the fourth largest publicly traded coal extractor by revenue ($2.69 billion) in the United States. It was founded in 1920 by the Massey family and operated in Richmond, Virginia. The company consisted of approximately 5800 employees right before Alpha Natural Resources acquired the company for 7.1 billion dollars. Interestingly, 99% of the shareholders voted in favor of the acquisition, which shows how poorly the company was governed by management. Don Blankenship took control over the company in 1992 and created a culture that favored profits over safety. In total, the coal extractor giant had around 369 citations and orders, which totaled a staggering 10.8 million dollars.

On April 5, 2015 a massive explosion in the Upper Big Branch Mine in Montcoal, West Virginia occurred that killed 29 people. This tragedy was the worst since the 1970 Hyden disaster. Massey Energy operated the Upper Big Branch Mine and later turned out that they operated the mine in a manner that was against several rules set up by the MSHA. The investigation later determined that the ventilation system in the mine did not work properly and failed to get rid of the toxic gases that caused the explosion. Massey intentionally neglected all the safety rules and citations issued by the MSHA for the purpose of increasing profits. However, this case goes deeper than one thinks. According to reports, Massey Energy is very influential on political figures and officials in West Virginia. Using this power, they were able to bribe and manipulate MSHA regulators so they look the other way when inspecting the mines.

In November 2014, Don Blankenship, was indicted by a federal jury on four criminal counts including conspiracy to violate safety laws, securities fraud, defrauding the federal government, and making false statements to the SEC. Even though he was charged with these, he was only found guilty of one on December 3, 2015. Had he been convicted of all four, he could have been sent to prison for approximately thirty years. Now, he is only serving one year in jail.

I do not believe that Blankenship should only serve one year in jail. It seems unfair to those who had lost their lives because of profits. It baffles me that people as greedy as him get away with conspiracy and murder charges. It seems that money can literally buy your freedom in the United States. All you need is a good lawyer or lawyers.

Dan is a graduate accounting student with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2016.

Research project posted by Rafael Gabrieli.

Eminent Domain

Part I:

Eminent domain is the power to take private property for public use by a state or national government. There would be just compensation for the private property seized, however, many problems arise from this act. The way that eminent domain works is that it is backed by the Fifth Amendment to the US.  Constitution, which is that your state government has power over all property in the State, even private land. The land can be taken without the consent of the owner, as long as he or she is justly compensated. The purposes for which eminent domain vary, however, it has to be used for a public good somehow. This means that roads, courthouses, schools, or any other infrastructure that can benefit the public will come into place of the land that the government took using eminent domain. The state government or national government is able to use eminent domain for large-scale public works operations or even growing freeway systems.

Part II:

Pros:

In Houston, Texas, land was obtained by the use of eminent domain in order to create the Minute Maid Park baseball stadium, which has benefitted the surrounding community immensely. The baseball stadium brings millions of people each year to downtown Houston. What is amazing to see is to compare it with the Houston community before the stadium was built, which was very barren and unsocial.

The I-85 widening project in Concord, North Carolina will reshape the way inhabitants travel around Concord. The inhabitants are being justly compensated, and some are even getting 5%-10% more than the initial appraisal value. This new freeway widening will allow traffic to be lessened during rush hours, which posed a big problem for the city during the past couple of years. It is a necessary and responsible use of eminent domain.

Cons:

Private property could have sentimental value, like a house that has been in the family for generations. This is the case with the Keeler family from Claverack, New York, who lived in their house for four generations and were being forced out due to the state’s plan to expand power lines. Another problem with eminent domain is that the price that the owner feels he deserves is more than what is being offered to him. This happened to Rich Quam, owner of a house in Fargo, North Dakota since 1997. The town stated that his backyard could become structurally unstable, so the city offered him an amount to buy the property from him. Rich Quam declared it an insult however, because the amount did not reflect the years of hard work he put into renovating the house, adding a second level and a garage. A third problem is the simple desire to not want to abandon a profitable business, which almost occurred a couple years back to Perry Beaton, property co-owner of a Burger King that the city of North Kansas City was attempting to seize from him.

Part III:

In Economic Justice for All, it is stated that the common good may sometimes demand that the right to own be limited by public involvement in the planning or ownership of certain sectors of the economy, which is essentially the basis for eminent domain. Catholic support of private ownership does not mean that anyone has the right to unlimited accumulation of wealth, rather, it states that “no one is justified in keeping for his exclusive use what he does not need, when others lack necessities.” Thus being the Catholic Social Teaching stance on Eminent Domain: if it is for the public good, an individual should be more than willing to give up his property that is not essential to his well-being in order to further the development of society and his surroundings.

Works Cited

Clayton, Adam. “Family Rallies to save Farmland from Eminent Domain.” Columbia-Greene Media. N.p., n.d. Web. 10 Mar. 2016.

“Economic Justice for All.” Wall Common Good Selected Texts. N.p., n.d. Book. 10 Mar. 2016.

Lewis, David. “Eminent Domain: Still A Useful Tool Despite Its Recent Thrashing.” Planetizen. Planetizen, 5 Sept. 2006. Web. 10 Mar. 2016.

Messina, Ignazio. “City Threatens Eminent Domain.” Toledo Blade. N.p., 26 Jan. 2014. Web. 10 Mar. 2016.

Reaves, Tim. “Making Way for the Freeway: Eminent Domain Claims Homes.” Independent Tribune. Independent Tribune, 7 June 2015. Web. 10 Mar. 2016.

Ross, John. “Hands Off! North Kansas City Loses Eminent Domain Case « Watchdog.org.” Watchdogorg RSS. N.p., 23 Jan. 2014. Web. 26 Jan. 2014.

Posted by Sydney J. Kpundeh.

The famous over the counter drug Tylenol was at the center of a case that was brought before a Pennsylvania federal district court in early November. The case involved a lady who had taken Extra Strength Tylenol for many years to treat various conditions. In Mid-August of 2010, she underwent lumbar laminectomy surgery and afterwards she was instructed by her doctor to take Regular Strength Tylenol in conjunction with Lorcet, a prescription drug containing acetaminophen, but not to exceed 4 grams of acetaminophen in a 24-hour period. For approximately two weeks, she used the Regular Strength Tylenol, as instructed, until the bottle ran out, after which she began using Extra Strength Tylenol. At some point, she stopped taking the Lorcet due to its side effects. On August 29, she unfortunately was diagnosed with acute liver failure and died two days later.

After her passing, her sister filed a products liability lawsuit, “including claims for defective design and negligent failure to warn against McNeil, which manufactures the drug, and Johnson & Johnson, McNeil’s parent company.” Her sister insisted that the defendants knew that Tylenol could cause liver damage when taken at or just above the recommended dose. Also, she claimed defendants were liable for the her sister’s death because they had failed to warn her of the “risks of injury and/or death.” The defendants moved for summary judgment on the ground that the sister had not offered sufficient evidence to support her failure to warn claim.

Under the Alabama Extended Manufacturer’s Liability Doctrine, there are two factors that must be shown to find the scope of a manufacturer’s legal duty. The first is that there is some potential danger and the second is that there is a possibility of a different design to avert that danger. In this case, sufficient evidence was presented to show that the manufacturers knew or should have known that Extra Strength Tylenol could cause liver damage. The facts also showed that the manufacturers were working to find a substitute. Finally, the evidence also showed that the plaintiff’s sister died of acetaminophen-induced liver failure after taking Extra Strength Tylenol as directed.

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

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 Melissa Nomani.

Lawsuits filed against Lumber Liquidators claim that homeowners who put certain laminate flooring into their home are being exposed to high levels of formaldehyde. This puts them at risk and also lowers the value of their property. As of this July, the number of lawsuits filed against the company has gone up from only a mere ten in June. Many lawsuits began being filed after a 60 Minutes episode that aired on March 1, 2015, exposing the high levels of formaldehyde in laminated flooring made in China. Formaldehyde is a known carcinogen and has been linked to cancer and respiratory problems. A study done by 60 Minutes showed that 30 out of 31 of the tested flooring samples (all of the sample were Lumber Liquidators products).

According to a study conducted by 60 Minutes, 30 of 31 flooring samples from Lumber Liquidators did not meet formaldehyde emissions standards. It is estimated that thousands of people have Lumber Liquidators flooring in their homes. Some lawsuits claim that homeowners have suffered from respiratory problems after installing the laminate flooring.

Another issue that has risen is that Lumber Liquidators is being accused of false advertising and selling products comprised of particles that come from endangered habitats and trees. The US Department of Justice is investigating the company for their alleged use of wood. The wood was illegally cut down from Russia–this directly violates the Lacey Act. The Lacey Act does not allow for the importation of products made from woods that are illegally logged.

Furthermore, this past May, Lumber Liquidators CEO, Robert Lynch, resigned. During this month the company also announced that it would be suspending the sale of flooring from China. The company offered homeowners free  indoor air quality screening, if they had purchased laminate flooring from China.

The number of lawsuits against Lumber Liquidators continues to grow.

Melissa is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Melissa Nomani.

Farmers across the United States are filing suits against Syngenta. As stated in the article, “The lawsuits allege the biotechnology company’s genetically modified Agrisure Viptera and Duracade seeds contaminated US corn shipments, making them unacceptable for export to China.” China does not allow the importation of GMO products that it has not tested. In February of 2014, China learned that the corn shipments from the U.S. contained Viptera. Agrisure Viptera is a seed that is genetically modified (known as MIR162) to prevent damage to crops by earworms and cutworms. As a result, China has rejected corn imports from the U.S.

Over 1,800 suits have been filed. Lawsuits filed against Syngenta state that the company put seeds on the market even though there was no approval from foreign markets. This has led to some farms having great financial losses. Even farmers who do not use GMO seeds could be affected due to accidental contamination from other fields. Syngenta has tried to refute the lawsuits by stating that they are not responsible for protecting farmers from GMO seeds. This arguments were rejected in September by Judge Lungstrum, who refused to dismiss the suits.

It has been estimated by The National Grain and Feed Association that as of April 2014 almost $3.0 billion worth of losses were caused by Syngenta’s Agrisure Viptera MIT162 corn seed.

The first of the lawsuits are expected to go to trial in June 2017.

Melissa is a finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

The rivalry between Alphabet Inc.’s Waymo and Uber has intensified as Google’s parent sued Uber on grounds of patent infringement and trade secret misappropriation in February. Anthony Levandowski, a former employee of Google, has allegedly stolen 14,000 files worth of trade secrets to create his own self-driving truck company, Otto, acquired by Uber last year. Bloomberg Technology claims that the design and construction of the laser-scanning system to guide the autonomous cars took Waymo about seven years to build, while Uber supposedly accomplished the task in a mere nine months.

According to the suit, Mr. Levandowski allegedly registered the company Otto mid-January of last year and left Alphabet twelve days later, but not before downloading 9.7 gigabytes worth of classified information from Waymo’s design server. The suit further claims that he took the time to meticulously conceal his activities by attaching “an external hard drive to his laptop for eight hours, before erasing the history of his computer,” and never using it again. A few months after Mr. Levandowski left Alphabet and received his last compensation check, Otto was bought for $680 million in stock by Uber.

The article reveals that Anthony Levandowski is not the only former employee accused of stealing confidential data from Waymo’s self-driving car project, which has led to approximately $500 million for Otto employees. Waymo explains that Uber unfairly used this stolen information as a shortcut to create a strikingly similar laser sensor system to their own. When confronted with this complaint, Uber spokeswoman Chelsea Kohler claimed, “We take the allegations made against Otto and Uber employees seriously and we will review this matter carefully.” Despite this statement, Mr. Levandowski has been unavailable to comment.

Danielle is a finance and ITM major at the Stillman School of Business, Seton Hall University, Class of 2019.

Sources:

https://www.wsj.com/articles/alphabets-waymo-sues-uber-over-self-driving-car-secrets-1487894378

https://www.bloomberg.com/news/articles/2017-02-23/alphabet-s-waymo-sues-uber-for-stealing-self-driving-patents

Posted by Courtney McCardle.

Johnny Depp, a very famous and popular actor filed a lawsuit in the beginning of 2017, as he believed the issue is costing one of his homes. He filed a lawsuit against his own business managers for more than $25 million in a jury- seeking suit. Depp is alleging fraud in breach of contract and professional negligence. The complaint also alleged that the management firm was attempting to foreclose on Depp’s primary home through a loan that was claimed to be from the management company. “In essence, TMG treated Mr. Depp’s income as their own, available to either TMG or third parties to draw upon as desired.”

Depp’s first step was to ask for a restraining order to stop the process of foreclosing the home. When the attorney for TMG was notified of this issue, he sent out a statement saying “For 30 years, Joel and Rob Mandel, and their company The Management Group, have been trusted business managers to some of the most successful individuals and companies in the entertainment business. For 17 of those years, they did everything possible to protect Depp from his irresponsible and profligate spending.” He also said Depp faced financial ruin in December 2012 with a $5 million bank loan. The Mandels loaned him the $5 million and Depp promised to repay by January 2014. By October 2016, Depp allegedly owed $4.2 million and as a result, the Mandels non-judicial foreclosing on some of Depp’s properties.

This lawsuit is an attempt to ruin the foreclosure by changing the actions of his managers. He ended up keeping all of his real estate holdings and was forced to pay back the loan to the Mandels.

Courtney is a business major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source:

http://people.com/movies/johnny-depp-fraud-lawsuit/

Posted by Gen Nagai

A law passed on 2015 that eggs sold in California have to come from hen that have enough room for them to stretch in their cages. This may also be known as “free-ranged eggs”. The purpose of this is to not only let the hen live a better life but studies have found that not giving them the ideal way of living increases the chances of getting salmonella from the eggs that they produce.

This may sound good, however, bad news come with it. Firstly, consumers will have to expect prices of the eggs to rise. Secondly, there may be a shortage of eggs may occur as 90% of eggs come from places where it is not acceptable to sell according to the California Law.

Today, over a dozen states have filled a law suit directly to the U.S. Supreme Court on Monday (Dec.04, 2017) to block this law as it violates the U.S. Constitution’s interstate commerce clause and are pre-empted by federal law. Although, a similar case has been rejected 6 different times by 6 different states, Missouri Attorney General Josh Hawley is confident in the new lawsuit as he has economic studies to back his case up.  He has mentioned that California’s egg law has cost consumers nationwide up to $350 million annually as a result of higher egg prices.

States that are backing up this case include Alabama, Arkansas, Indiana, Iowa, Louisiana, Nebraska, Nevada, North Dakota, Oklahoma, Texas, Utah, and Wisconsin.

Gen is a business information technology management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source: https://www.cnbc.com/2017/12/04/the-associated-press-the-latest-13-states-challenge-to-california-egg-law.html

Distractions can cause auto accidents and smartphones have been identified as one.  Many states have laws that limit the use of smartphones while driving. Lawyers generally do not pursue distraction cases if there is evidence of some other cause, such as speeding or reckless driving.

There has been an increase in motor vehicle fatalities across the country and they include those involving pedestrians and bicyclists. The studies, however, do not seem to attribute the increases to speeding or driving under the influence.

Many speculate smartphone use is a major cause of the spike in fatalities, but none of the studies show any causal connection. Part of the difficulty in collecting data lies in the reporting forms used by police.  “Only 11 states use reporting forms that contain a field for police to tick-off mobile-phone distraction, while 27 have a space to note distraction in general as a potential cause of the accident.”

In Torts, we discuss defamation and the strict limitations surrounding public figures when pursuing claims against people who say things that hurt their good reputation. Bill O’Reilly, a former prominent news commentator, filed a $5 million-dollar lawsuit against a former politician who posted statements on Facebook regarding his former girlfriend’s treatment by Fox News after she made harassment accusations.

The complaint states: “‘Plaintiff [O’Reilly] seeks damages for the public hatred, ridicule, disgrace, and permanent harm to his professional and personal reputations as a result of Defendant Panter’s publication of knowingly defamatory statements about Plaintiff, which were made with actual malice, as well as Defendant Panter’s intentional infliction of emotional distress upon Plaintiff.’”

Claims made by public figures are difficult, but not impossible, to prove because they require a showing of malice.  Here, the complaint alleges defamation and intentional infliction of emotional distress.

The United States Supreme Court dismissed cases involving President Trump’s executive order blocking people traveling to the United States from certain countries. A September order replaced the March order expanding the restrictions. Since the March order expired, the cases pending before the High Court were moot.

The Supreme Court also vacated the underlying Ninth Circuit opinion blocking the order.  The effect is now there is no precedent, which the district court in Hawaii relied upon to block the September order. The Justice Department will be asking the district court to revisit his ruling now that the Supreme Court has acted.

Posted by Divina Tanamal.

An unnamed telephone marketing company was recently brought to trial by the Department of Labor. The company was accused of unfair treatment of its employees for not allowing them to be financially compensated while taking breaks in between working hours. Although the sales representatives were able to log off their computers and take breaks in any frequency or duration that they desire, once they become inactive for more than 90 seconds, their wage hours are placed on pause. Essentially, they are not paid for their break times. The Department of Labor implicated that Title 29, Part 785.18 of the Code of Federal Regulations stated that, “rest periods of short duration, running from 5 minutes to about 20 minutes, are common in industry” and that they “promote the efficiency of the employee, [therefore] are customarily paid for as working time.” This portrays the company’s unwillingness to pay its employees’ break times as incompliant with federal regulations.

Nonetheless, the company retaliated by claiming that another segment of the Code of Federal Regulations (29 C.F.R. § 785.16) states that when “an employee is completely relieved from duty which are long enough…to use the time for his own purposes,” that time is to considered as “hours worked.” In essence, the company has a loose break time policy that allowed its employees to leave their computers whenever or however often they liked, liberating their employers from any obligation to pay for the breaks taken.

In my opinion, the company’s institution of its break times policy was merely a stratagem to minimize the employees’ incentive to take breaks. Since it is expected for most places of employment to allow their workers to take brief paid breaks, this company should not be exempted from that same expectation. It is only just for employees to be able to take breaks in between hours of working without the deterrent.

The case was brought in the Eastern District Court of Pennsylvania. The court claimed that 29 C.F.R. § 785.18 is a more widely accepted rule compared to the more specific 785.16, illustrating its disagreement with the company’s appeal.

Divina is a business administration in the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Connor O’Reilly.

On October 15th California Governor Jerry Brown signed several employment related bills into effect. These bills have been crafted and designed to change laws regarding the state’s employers. “The newly-enacted laws address a range of topics, including criminal conviction history, salary history and sanctuary immigration policy.”

The governor’s first major law bans inquiries regarding salary history when applying for a new job. “California will now prohibit all employers from inquiring about or relying upon salary history information of an applicant as a factor in determining whether to offer employment or an applicant’s salary.” This law was created in order to deter pay inequalities in regards to gender, race and ethnicity. This bill adds a completely new section to the Labor Code which applies to employers on both a state and federal level.

Next, California just passed a “Ban the Box” law which prohibits pre-application questioning regarding criminal records. In an effort to thwart discrimination and promote equal opportunity employment, “California will now prohibit all employers with five or more employees from inquiring into or relying upon an applicant’s criminal conviction history until an applicant has received a conditional offer of employment.” Further, if an applicant has a criminal record, employers are required to conduct individualized assessments on the conviction history including severity of the offense, the time that has passed and the nature of position sought. Their decision must be calculated, explained to the applicant, and be in compliance with California’s Fair Pay Act.

Additionally, California now declares itself a Sanctuary State and will prohibit employers’ compliance with newly passed federal immigration laws. This controversial law makes it illegal for employers to voluntarily permit federal immigration agents from searching private workplaces without a warrant. There are also several other regulations regarding time requirements before searches and harder requirements to obtain Employment Eligibility Verification from already employed workers. The penalties are extremely harsh for disregarding these laws which range from $2,000 to $10,000.

Without a doubt, California is creating laws that give more power and rights to workers. By eliminating salary history in the application process, each applicant will be given a salary solely based on their skills. California’s “Ban the Box” laws also promote equality in hiring and negate discrimination towards people with criminal records. Yet the new law prohibiting businesses from complying with Federal laws is extremely concerning and shocking. This is clearly a backlash at President Trump and his harsh crackdown on illegal immigrants, yet it will prove to be very taxing on the business owners of California. Overall, I believe California is creating important laws to give rights back to the working class, but creating laws that go against federal law will cause issues down the road.

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

Source:

https://www.natlawreview.com/article/recent-deluge-california-legislation-imposes-new-requirements-employers

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 Daniel Szatkowski.

According to Chris Bruce in a Bloomberg article dated October 17, 2017, Wells Fargo was found charging costumers fees to lock interest rates on mortgages and other loans made with the bank. The lock rate fees earned by Wells Fargo are up to $98 million in the period of approximately four and half years ending February 2017. Wells Fargo incorrectly claims that their clients are behind and/or missing payments, which would lead to increased interest rates. Instead of increasing the rate, Wells Fargo tells them to pay rate-lock fees to keep the rate where it is.

The manner in which Wells Fargo is charging lock-rate fees is unethical. First of all, many of the Wells Fargo clients were not actually behind on their loan payments. According to Brian Brach and other mortgage applicants, “Wells Fargo employees wrongfully blamed customers for loan processing delays and made them pay fees to maintain a lock on interest rates that might otherwise expire.” The delays were caused by Wells Fargo, which triggered the rate-lock fees; therefore, no fees should have been issued to the clients.

Wells Fargo wanted to unethically increase their profit by charging these rate-lock fees even though they did not apply to the situation. The company’s reputation will drop due to the new unwanted press and the clients are putting Wells Fargo on trial. The first of the reimbursement will be sent out during the final quarter of this year.

Daniel 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 Charles Bond.

My article is about the people who feed millions of Americans, farmers. Specifically, a ruling the USDA first tried to implement, but then decided to rescind. This ruling would have offered more protection for farmers who raise cows, pigs, and chickens for the largest meat producers in the United States. The USDA’s plan would have made it easier for farmers to sue those meat producers they are in contract with for unfair, discriminatory, or deceptive practices. This was a policy that was set to be enacted at the end of the Obama Administration but was put on hold until the Trump Administration took over; the USDA under the new administration decided to drop it. “Currently, several court rulings have interpreted federal law as saying a farmer must prove a company’s action harm competition in the entire industry before a lawsuit can move forward.” The farmer’s cannot just say they believe a company is aiming to cause harm; they must prove the company said this was their intent.  Passing the new rule would ease the burden of finding proof.

This new rule would have been extremely beneficial for chicken and pork farmers. “Chicken and pork producers must enter long-term contracts with companies like Tyson Foods and Pilgrim’s Pride that farmers allege lock them into deals that fix their compensation at unprofitably low levels and forces them deeply into debt.” Farmers are unaware of the repercussions of these deals until it is too late to do anything about them. The National Chicken Council President was strongly against this rule and thought the rule would have “opened the floodgates to frivolous and costly litigation.” Politicians are split on the ruling. Senator Pat Roberts was pleased with the rule being dropped stating, “It demonstrates the Trump administration’s commitment to promoting economic prosperity and reducing regulatory burdens in rural America.” Meanwhile Senator Charles Grassley criticized the rule being shot down saying ,“The USDA is the U.S. Department of Agriculture, not the U.S. Department of Big Agribusiness.”

This is a complicated issue, with reasonable arguments on both sides. However, it seems unreasonable not to have this rule. It is proven that meat producers exploit farmers across the board just so they can maximize profit and keep the farmers reliant on them for business. An argument made against the rule was that it opens the floodgate for farmers to bring cases against the companies, whether they have sufficient evidence or not. If the companies really were doing no wrong than they would not care because the cases would always go there way and secondly the ruling is only being implemented because so many farmers are claiming the companies are doing wrong and they have means to bring them to court. It really is a dicey issue, but ultimately the farmers should be allowed to take the companies court and have the law settle the disagreement.

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

Source:

https://www.nytimes.com/aponline/2017/10/18/us/ap-us-farm-rules.html