In class, we discuss the American legal system’s doctrinal foundation of presumption of innocence, based on Blackstone’s formulation, and even deeper, its Biblical roots. A Kansas man was recently released from prison for a crime he did not commit. His brother confessed to killing his niece and then committed suicide.

Kansas has no law helping those who are released from prison.  Other states, such as Texas, would have given him $1.8 million, or $80,000 for every year lost, “not including a yearly compensation afterward.” Colorado would provide $70,000 for each year, and Alabama, $50,000 per year.

As a remedy, it is possible to sue state officials under federal law. Section 1983 of the code in part states, “Every person who … subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law.”

These cases are difficult, but not impossible, to prove. Police have “conditional immunity” from prosecution, and prosecutors have absolute immunity, where a case can go forward if there is evidence of intentional misconduct.

Posted by Dan Lytle.

David Ganek, the former owner of a hedge fund in Greenwich, Connecticut, had lost his business in 2013, three months after an FBI investigation took place for alleged insider trading. Two years later, in 2015, Ganek attempted to sue the FBI for $400 million, citing “lost income and lost business reputation.” The reason Ganek went through with the lawsuit is because he did not believe it was fair to investigate his office when he was not involved with insider trading. However, the Second Circuit panel disagreed, saying, “there was at least a fair probability to think that his office was a place where evidence of an insider trading scheme would be found.” While some evidence was found to hold against Ganek, he was not ultimately charged for anything. Ganek still does not believe this was right to do, since it cost him his business. He said of the situation, “’this is a dangerous day for private citizens and a great day for ambitious, attention-seeking prosecutors who are now being rewarded with total immunity even when they lie and leak.’” Just recently, it was announced that Ganek had lost this case against the FBI.

In my opinion, the FBI was acting both legally and morally in searching the office of David Ganek for insider trading evidence. From a legal perspective, the FBI searched the office because they had reason to believe there was evidence present in order to uncover a larger insider trading scheme. Furthermore, morally, the FBI acted correctly, as their search aimed to crack down on insider trading. While I do believe that it is not right that FBI agents can be rewarded with immunity when investigating businesses, this is an exception, as the investigation of this “hedge fun and others sent shockwaves through Wall Street’ and led to the indictment of investment bankers and traders.” Therefore, while Ganek was not necessarily guilty of insider trading, the FBI was able to use information found throughout the raid of his hedge fund that led to the arrests of others, which is a crucial factor as to why Ganek lost this lawsuit.

Speaking legally, the FBI was protected under Amendment IV of the Constitution, which protects citizens against unreasonable searches and seizures. However, in this case, the FBI had probable cause to search Ganek’s hedge fund, as they believed that Ganek’s hedge fund was involved with an insider trading scheme. While the Fourth Amendment states that nobody can be unreasonably searched, it also mentions that “upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, persons or things [can] be seized.” In short, while Ganek did not agree with the ruling because he believed the FBI was granted “immunity” for searching his office and causing his hedge fund to fall apart, the reality is that the FBI acted legally according to Amendment IV.

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

Sources:

http://news.findlaw.com/apnews/53ca32d894c44c5ea64185ab462b6e72

https://www.billofrightsinstitute.org/founding-documents/bill-of-rights/

Posted by Sandra Mucha.

Rio Tinto, one of the world’s largest mining companies, is under investigation for allegedly overstating the value of a mine in Africa by billions of dollars. Rio Tinto Plc’s CEO Tom Albanese and CFO Guy Elliott were accused of performing fraudulent activities within their business on October 18, 2017. The accusation included claims about the unlawful concealment of critical information regarding the company’s multibillion-dollar failure. The two former top executives were suspected of inflating the coal assets in Mozambique in order to hide the ordeal. By concealing information they violated company policies and failed to follow the proper accounting standards to accurately record the assets. To settle the claims given by the U.K. Financial Conduct Authority the company agreed to pay $35.6 million. By hiding the true value of a coal mine in Mozambique and making misleading public statements, the company was able to raise $5.5 billion from U.S. Investors from 2011-2012.

Although the company is based primarily out of London the company’s stocks and shares are traded by U.S. investors on the New York Stock Exchange thus granting the U.S. with the rights to pursue the case. The SEC claims that the public bond offerings harmed U.S. investors. Guy Elliot claimed that the allegations were invalid, and promised to vigorously dispute the charges. The SEC forced him to resign from the board of Royal Dutch Shell and is seeking to have Albanese and Elliott barred from acting as officers or directors of any public company.

I believe that the executives were fully aware of the low monetary value of the mine, understanding that it was worth significantly less within a year of purchasing it. Because the men but did not share that information with investors until 2013, nearly two years after people had already purchased $5.5 billion worth of shares, they should be charged with fraudulent activity for their inability to comply with the rules and regulations. They distributed false information to individuals who follow the stock market. While it is acceptable to refrain from releasing information to the public too early because it can cause misunderstanding and panic, it is wrong and illegal to record inaccurate asset values. The executives were dishonest and deceitful and should be punished accordingly.

Sandra is a business major at the Stillman School of Business, Seton Hall University.

Reference Link:

https://www.cnbc.com/2017/10/18/reuters-america-update-5-u-s-sec-charges-rio-tinto-former-top-executives-with-fraud.html

Posted by Aristea Selmani.

In recent years, the operating role of business executives amid law firms has risen to a new high. Bloomberg law reporter Casey Sullivan, argues in his article Should Business Managers Run Law Firms this mere notion of as to “what degree should business executives oversee operations at law firms as opposed to lawyers who do what they do best — practice the law” (Sullivan). The growing number of business executives present in the field of law, seems particularly peculiar given the fact that a lot of these executives have no previous experience in law practices or simply do not hold any law degrees. Nonetheless, they are still entrusted with the subtle responsibility of “telling lawyers how to manage their work”, when in truth, such a role could be more effectively performed by lawyers who essentially practice law and understand how law firms operate. Throughout this article, Sullivan attempts to incorporate the opinions and thoughts of several business executives, which primarily concern their roles in the department of law.

Sullivan begins his article with an introduction detailing the influence of business executives in one particular law firm by the name of Katten Muchin Rosenman of Chicago. According to the report, this establishment just recently declared that it “has no plans to scale back managerial oversight of its 600-lawyer firm” (Sullivan). On the contrary, they are hiring longtime chief operating officer, Craig Courter to manage the daily operations of their law firm. Sullivan declares that Craig Courter is another addition to the list of business executives who “do not practice law … but are [still] charged with the delicate task” of managing lawyers (Sullivan). Their executive roles span from making small everyday decisions to choosing the right clients for the firms to take on. More explicitly, Sullivan also mentions that at Katten Muchin Rosenman Courter will act as a supervisor of marketing, finance, technology, talent management and human resources.

In another case mentioned throughout this article, chief operating officer of the Americas at White & Case, Victor Núñez, plainly stated that “[he] really didn’t know much about law firms and how they operate,” and never went to law school, but was still charged with the important role of “assessing the profitability of client matters, as well as forming strategy around and executing new office openings” (Sullivan).

Furthermore, in Should Business Managers Run Law Firms, Sullivan cites another business executive who is currently met with skepticism known as John Yoshimura, chief operating officer at McDermott Will & Emery. Yoshimura just recently began to implement a business-development team to help lawyers with their clients, however since the McDermott “partners have been “skeptical” of business development staff handling their client relations”, the new development is still in the planning phase. He did however make a strong case regarding the notion that “doing outreach through business development staff … is more cost effective than having partners do it” (Sullivan). Therefore, on the basis of this aspect, and given the statistic that there is a growing number of law firms in the market, business administration roles could consequently be greatly demanded in the recent future.

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

Source:

Article Link: https://biglawbusiness.com/should-business-managers-run-law-firms/

Posted by Justin Trigg.

Northern California homeowners have filed a lawsuit against Pacific Gas & Electric Co. for failing to sufficiently protect power lines before the region’s deadly wildfires. The homeowners Wayne and Jennifer Harvell argue, “[the] drought-like conditions over the summer put fire dangers ‘at an extraordinarily high level’, the homeowners are claiming PG&E failed to trim and remove vegetation within close proximity of power lines.” The California Department of Forestry and Fire Protection are actively “investigating the power lines and equipment as a possible cause of the fires that have killed at least 41 people and destroyed 6,000 homes.”

If the state, fire investigators determine the utility’s equipment as a possible cause, then the California Public Utilities Commission, who regulates PG&E, investigates the issue. In recent years, PG&E has been fined “$8.3 million for failing to maintain a power line that sparked a massive blaze in Northern California that destroyed 549 homes and killed two people” and “$1.6 billion for [a] 2010 natural gas explosion in the San Francisco Bay Area city of San Bruno that killed eight people and destroyed 38 homes”. Moreover, PG&E has reported to state regulators of several accounts of damages to its equipment. However, the report failed to acknowledge whether they might have caused the fire.

In my opinion, because of the evidence of PG&E’s failures to maintain their equipment from causing destruction and damage in recent years, they must increase their efforts to sustain their equipment in order to avoid these tragedies. Meanwhile, California homeowners, who appear to be aware of the danger of vegetation growing close to power lines, must alert the proper authorities to trim and cut down these hazards. With an increased effort from both parties, perhaps the degree of severity from these reoccurring California wildfires can be lessened.

A day following the lawsuit, United States Senators Dianne Feinstein and Kamala Harris of California wrote the Federal Communications Commission expressing their concern of the federal government’s failure, “to adopt rules that would require wireless carriers to more precisely target neighborhoods with orders to evacuate”. This regulation would certainly benefit the residents of neighborhoods in imminent risk, while evading alerting residents, who are in safe areas. The Senators argue, “These emergency services are caught in a bind between notifying individuals in imminent danger and risking mass panic”.

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

Source: http://news.findlaw.com/apnews/b98b3394040d470aa6db2afbdb2ea4dd

Posted by Alexandra Prostamo.

On October 16, the Supreme Court agreed to consider Microsoft’s dispute over the government’s authority to be able to access emails and digital information sought in criminal investigations, but stored outside of the United States. According to the Trump administration and 33 states, the court’s decision is impeding investigations into terrorism, drug trafficking, fraud and child pornography just because the email information is stored in servers in Ireland. This is why they urged the court to take the case, U.S. v. Microsoft.

They believe the decision has implications not only for Microsoft, but also for other technology giants like Google and Yahoo, stating that “a private company has unfettered discretion to shield evidence of crime from law enforcement, simply by electronically sending that evidence out of jurisdiction.”  The issue rises from the fact that data companies have built servers around the world to keep up with customers’ demands for speed and access. This is why the court needs to confront whether the same rules can be applied to the emails of both an American citizen and a foreigner.

What Microsoft is trying to battle is the Stored Communications Act of 1986, which allowed a U.S. law enforcement agency to obtain stored e-mails with a warrant from a U.S. provider if those e-mails are stored abroad. Microsoft president and chief legal officer Brad Smith stated that “the current laws were written for the era of the floppy disk, not the world of the cloud”. Microsoft deeply advocates for the fact that Congress should pass a new legislation, however the result of the dispute could have significant global business and privacy implications.

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

Sources:

https://www.washingtonpost.com/politics/courts_law/supreme-court-to-consider-major-digital-privacy-case-on-microsoft-email-storage/2017/10/16/b1e74936-b278-11e7-be94-fabb0f1e9ffb_story.html?utm_term=.4863bf16975d

http://news.findlaw.com/apnews/fb9b07a2c14940b0977cb35ff01166ff

Posted by Gabrielle Vanadia.

Recently, there has been a lawsuit filed in federal court against three major American corporations for supposedly doing business with the Iraqi government during the Iraq War.  This lawsuit was filed by lawyers from a start-up firm led by Ryan Sparacino and the litigation firm of Kellogg Hansen, on behalf of members of the American military that were killed or injured in attacks during the Iraq War.  General Electric, Johnson & Johnson, and Pfizer are three of the major corporations being accused of providing free drugs and medical devices that funded the Shiite militia.  Other companies accused of contributing are the European drug makers AstraZeneca and Roche Holding A.G. The lawsuit filed provided contracts between these companies and Iraqi government, as well as “leaked diplomatic cables, press accounts, and the testimony of informants.”

The lawsuit claims that the companies knew that the Iraqi health ministry, who they were providing with drugs, had become a terrorist organization.  Upon knowledge of this information, the corporations should have terminated their contracts or changed them to prevent corruption, since it is illegal under United States law to knowingly fund terrorist groups.  However, a Pfizer spokeswoman said that the company “denies any wrongdoing” and that their mission was to “provide medicines to patients to help better their lives;” while Johnson & Johnson has completely declined to comment on this matter.

In my opinion, the actions of these companies are completely unacceptable.  They willingly and knowingly funded a terrorist group that was attacking United States soldiers.  American soldiers were in Iraq to help rebuild and regain the country for the Iraqis after the overthrow of Saddam Hussein.  However, instead of American companies backing and funding their own troops, they helped the enemy.  The militia group that U.S. soldiers were fighting were commonly referred to as the “Pill Army” because their “fighters were often paid with prescription medicines and used hospitals… as staging areas for death squads.”  Many of these death squads funded by drugs from American companies killed American soldiers.  If I was an employee of one of the accused American corporations I would be embarrassed and ashamed of my company’s actions.

Gabrielle is a public relations major with a business administration minor at Seton Hall University, Class of 2019.

Source:

https://www.nytimes.com/2017/10/17/us/johnson-ge-pfizer-terror-iraq.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business&region=stream&module=stream_unit&version=latest&contentPlacement=13&pgtype=sectionfront

Posted by Reganne Camp.

Recently there have been tragic wild fires in Northern California, now killing 41 people and destroying 6,000 homes. Wayne and Jennifer Harvell believe that the Pacific Gas & Electric Company had something to deal with how bad the fires became, which is why they are suing. They believe that the company failed to adequately protect its power lines before the region’s deadly wildfires. The lawsuit in San Francisco Superior Court says drought-like conditions over the summer put fire dangers “at an extraordinarily high level,” particularly after heavy winter rains increased vegetation. It says PG&E failed to trim and remove vegetation as it should have. The California Public Utilities Commission, which regulates PG&E, would investigate only if state fire investigators confirm that that the utility’s equipment was a part of the reason for the fires.

PG & E Co. has been in trouble before. Earlier in the year, the utility commission fined PG&E $8.3 million for failing to maintain a power line that caused a massive blaze in Northern California that destroyed 549 homes and killed two people. In addition, California regulators fined PG&E $1.6 billion for 2010 natural gas explosion in the San Francisco Bay Area city of San Bruno that killed eight people and destroyed 38 homes.

I understand why sometimes a company does not reach out to the public in case of causing mass panic for no reason, but they also need to protect people who could possibly be in danger,  especially, where there is a history of people dying in incidents that cause. The company may not have control of the temperature and how high it gets, but they do have control over their equipment and duties they are supposed to monitor. Companies that commit illegal acts and especially where they also act unethically gives the victims more of a reason to sue.

Reganne is a marketing student at the Stillman School of Business, Seton Hall University.

Posted by Shellian A. Murray.

The basis for this blog will be an Enron story” The Smartest Guys in the Room (2005)” which was retrieved from the documentary listings on Netflix. A 2929 Entertainment, a Wagner/Cuban Company, Magnolia Pictures, HDNet Films. The documentary takes a behind the scenes look at the reliable energy company whose downfall will forever change the scope of business prospects around the globe. The “Jesus saves” notion was embedded with everyone asking the same sets of questions, which include, whether or not one main person was to be blamed, or it is a shared effort, and what mechanisms were put in places to make sure such events will never occur again. The fall of Enron was considered to be the largest bankruptcy in the United States of America history.

Enron, a company that took approximately 16 years to build and with a net worth of over a 100 million in assets took 24 days to go bankrupt.  What everyone thought was a significant investment and a company that was poised to take over the energy section with major gas prices, turns out to be the biggest Ponzi scheme. But in an instructive tale of corporate greed, negligent and diffusion of responsibility, there was no evidence of directors’ fiduciary duty, integrity, and stewardship displayed from those who were the leading players in the Enron scandal.

Jeffery Skilling, the former president and CEO and Kenneth Lay chairman/CEO were both Harvard graduates, the leaders of Enron, and were known as “the smartest guys in the room.”  Skilling and Lay were the captains of the ship; one that they thought was too powerful to go down. The employees that were involved were consumed by pride, greed, arrogance, and intolerance that they fail to realize they were just sinking themselves into a hole: a hole that will be unable to climb back out. The chaos caused by Enron traders in the 2000 California energy crisis left many disgruntled. California was seen as the money pit for Enron. The game was to create blackouts that would then drive-up gas prices significantly.  Many called on the federal government to fix a deregulatory system that Enron officials took for self-interest, but were told that the state was on its own and had to correct the problem by themselves.

On the other hand, Enron’s CFO, Andrew Fastow was still able to continue leaving massive debts off the balance sheets and booking future earnings, producing an illusion of market-to-market profit.  The Security Exchange Commission (SEC) did not have a problem with this accounting method and failed to enforce against companies like Enron. But reported profits were actually losses, even though amounts were not collected or collected, but were supposedly prepayments from clients, where such momentum was created to keep the stock price up.  But after winning the award for the best innovative company six years in a row, many persons started to question, how Enron made its money. A reporter by the name of Bethany Mclean wrote an article, “Enron stock overpriced?”  realizing that the cash flows were not coming together.

Jeffery Skilling the CEO had resigned suddenly, which lead the SEC to launch an investigation.  Enron declared bankruptcy on December 4, 2001, giving employees thirty (30mins) to leave the building. But before such bankruptcy declaration, on October 23, 2001, Author Andersen, the prestigious accounting firm had destroyed thousands of documents which were related to Enron finances.

Opinions and Reactions

The operation of Enron defrauded employees and investors out of millions of dollars, which at the same time the “big guys” who were involved in the game were quietly bailing themselves out, putting millions in personal and offshore accounts including the banks, such as, Chase and Citi Bank. Ken Lay had a high level political figure as a good friend, one that could help Enron to maintain its operation’s practices. Consequently, and if one were to believe it or not, politics is the driving factor for all regulatory and policies within any countries operations.

ArthurAndersen, the prestigious accounting firm, was paid a million dollar per week, denied their awareness of such practices of Enron. Auditors that supposedly gave reasonable assurance that the financials were, in fact, true and fair and free of material misstatements. As a result, many persons questioned the integrity and independence of the accounting and auditing profession. Such questions left a bitter taste in my mouth, within a career that has my interest and aspiration. A profession I held a role as an external auditor, internationally, and now as an accountant, I am in an “aww” moment, as to how people’s greed could allow them to continue embezzling cash or equivalents by any means necessary, no matter what harm may have caused by such actions. The disappointment I have with these people that are involved, by allowing their integrity to be compromised because of the greed of money is very heart rendering, wherein the end, mostly the poor suffer from such harsh deals.

Shellian is a master of science in accounting student at the Feliciano School of Business, Montclair State University, Class of 2018.

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 Yacheng Xu.

Federal Reserve Bank of New York President William Dudley “warned that investing in privately issued digital money such as bitcoin could end in big financial losses for those involved.” He opined, “There is a bit of a, I would say, speculative mania around cryptocurrencies in terms of their valuations, which I view as pretty dangerous, because I don’t really see what the actual true underlying value of some of these cryptocurrencies actually is in practice.”

The Fed’s vice chairman for supervision, Randal Quarles, said, “While these digital currencies may not pose major concerns at their current levels of use, more serious financial-stability issues may result if they achieve wide-scale usage.”

From my perspective, with the gaining popularity of cryptocurrency like Bitcoin, more risks such as hacking and scandals will in crease.  Bitcoin proves to be a highly speculative asset. Nevertheless, the Fed failed to enforce any rules, and the SEC merely issued some warnings regarding Bitcoin and future ICOs. The cryptocurrency is basically free of government regulations, which easily can trigger an investment bubble, illegal fund-raising, and undermining the market economy. Hence, in China, the government has shut down the cryptocurrency exchanges in September, 2017 and prohibit new ICOs.

It is indisputable that the virtual money is a great way to avoid the control by a central bank. Given the pros and cons of cryptocurrency, we should have a compromise solution, allowing the existence of exchanges but setting regulations at the same time.

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

Sources:

https://www.wsj.com/articles/feds-dudley-says-puerto-rico-has-difficult-recovery-process-ahead-of-it-1519311605?mod=searchresults&page=1&pos=8

Posted by Alex Coyle.

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

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

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

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

Source:

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

The craze over cryptocurrencies, particularly Bitcoin, calls into question as to how things are valued in this space. This article and video help shed some light on the issue as to whether Bitcoin is a bubble or something with real world value.

Source:

https://www.forbes.com/sites/nathanlewis/2017/12/07/what-is-the-fundamental-value-of-bitcoin/#6527eb19545a

Posted by Ruowei Peng.

Currently, there is a widespread belief that reaching a trade consensus between countries is an important part to contribute to foreign trade going on wheels. However, it is not easy to reach an agreement. NAFTA, the North American Free Trade Area, is signed by the U.S., Canada and Mexico. The three member states must abide by the principles and rules of the agreement, such as the most-favored-nation treatment and the transparency of procedures to eliminate trade barriers, but recently, there is a controversy about its revision.

According to William Mauldin’s essay, “Canada, Mexico Reject Proposal to Rework NAFTA Corporate Arbitration System”, Canada and Mexico refuse what the U.S. suggests in modifying the NAFTA’s proposal. Canada and Mexico point out that the U.S. aims to quit the organization, while they do not want any country to drop out since it may influence trade between countries. U.S. officials said that it is still negotiating. In the sixth meeting, they talked about anticorruption issues and Canada tried to put up an informal proposal that makes up for the shortfall in the U.S. demand for car production. It seems that everything develops toward a positive direction. However, the U.S. desires to secede from NAFTA, which will lead to problems that American companies would be protected by arbitration but companies in Mexico and Canada are not allowed to use the system to challenge the U.S. government. Large companies are trying to avoid it from happening because of court battles are always more expensive than arbitration. Canada and Mexico are likely to remove the investor’s state provisions and form their own bilateral investor agreement. The Trump administration proposed to shrink the challenges that the company may pose in the system. However, there is no proposal that will not be questioned by the public. Thus, the argument is still going on.

From my perspective, free trade is beneficial to a country’s development. Free trade promotes a country’s economic development, because countries in the free trade zone can circulate and reduce tariffs, while countries outside the trade zone maintain their original tariffs and barriers. To some extent, every member state wants to maximize its benefit though the proposal, but it doesn’t make sense. Thus, conflict produces and countries need to negotiate to find solution. It will be easier to reach an agreement if each of them step back and consider their citizens’ welfare and the economic benefit of all countries in free trade zone. I firmly believe that with joint efforts, they will come to an understanding.

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

Source:

https://www.foxbusiness.com/features/canada-mexico-reject-proposal-to-rework-nafta-corporate-arbitration-system

Published January 28, 2018 William Mauldin

Article’s Title: Canada, Mexico Reject Proposal to Rework Nafta Corporate Arbitration System

Posted by Ziheng Cai (Ricardo).

The crisis intensified in recent LeTv problems from financial problems including layoffs; the ups and downs of LeTv just like drama TV series, as the founder of LeTv, Jia Yueting again and again stood in the forefront. Let us begin with a LeTv internal letter in November 2016.

On November 6, 2016, Jia Yuting, the boss of LeTv, released an internal letter to the whole staff, saying the company is focused on mainly is the mobile phone supply chain problems. According to  statistics, LeTv phones have affected dozens of suppliers and agents, and the arrears amount to billions of yuan.

LeTv phones grab market share sales at lower than market prices; but, LeTv sells at a loss of 200 yuan, less direct costs and a net loss of 4 billion in the past two year. Sales cash flow cannot make up for the cost, therefore, to in order to balance this upstream supply chain is inevitable.

In addition, LeTv subsidiary mobile Hong Kong LTD has purchased an 18% stake in Coolpad for hk $2.73 billion on June 28, 2015, becoming the second largest shareholder of Coolpad. Then, in June 2016, LeTv gave out another 1 billion Hong Kong dollars for “whale swallowed” Coolpad. LeTv mobile owns about 28.90% of the shares of Coolpad Group, which makes it the single controlling shareholder. But maybe not for long, Coolpad mobile phone also because of the transformation of labor issues, capital shortage and other issues. The company’s forecast for 2016 was hk $4.21 billion.

In 2016 at an annual shareholder meeting, Jia Yueting admitted that LeTv Music made some mistakes. And in this event, an audit was rejected by LeTv. This is a violation of Article 33 of the company’s rules. In accordance with the provisions of Article 33, the shareholders shall have the right to consult, to a copy the articles of association, to the minutes of the meeting of shareholders, the resolutions of the board of directors, the resolutions of the board of supervisors, and the financial and accounting reports. The shareholder may request to consult the company’s accounting books. If a shareholder requests to consult the accounting books of the company, he shall make a written request to the company for the purpose.

Shareholders shall make a written request for a written reply within 15 days from the date of the shareholders meeting and explain the reasons. If the company refuses to provide this for inspection, the shareholder may request the People’s Court to request the company to provide for the inspection.

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

Source:

https://www.reuters.com/article/us-leeco-management/chinas-leeco-founder-resigns-as-chair-of-listed-unit-after-public-plea-for-patience-idUSKBN19R0B8

Posted by Masood Mohayya.

In Fall 2015, TaxSlayer, a web-based tax preparation service, fell victim to a data breach, specifically a credential-stuffing attack. Due to a security flaw, the cyber-attackers were able to gain access to almost 9000 TaxSlayer accounts, which provided them the highly-sensitive data (including social security numbers, bank accounts, and credit card information) belonging to TaxSlayer’s customers. TaxSlayer was not aware of this attack until January 2016, when a user complaint mentioned a compromised tax account. The discovery of this credential-stuffing attack resulted in a thorough investigation conducted by the FTC.

The FTC had determined that TaxSlayer failed to meet the standards set by the Privacy Rule and the Safeguards Rule of the Gramm-Leach-Bliley Act (GBLA). Although the GBLA only applies to financial institutions, such as banks or investment advisors, the fact that TaxSlayer partakes in tax return activities made it subject to the GBLA. The Safeguards Rule requires financial institutions to have a “comprehensive written security program”. Furthermore, they need to routinely monitor their cybersecurity programs, and “design and implement information safeguards” to control any risks or flaws identified during security assessments. Had TaxSlayer not violated these requirements, their network security risk could have been identified much sooner, and prevented the endangerment of thousands of customers’ information.

Moving forward, the FTC concluded that TaxSlayer must comply by the regulations set by the GBLA. Failure to do so would subject them to contempt risk. However, this incident opened larger doors for the FTC. One of their largest priorities is enforcing the importance of multi-factor authentication to access sensitive data for all companies, especially those not subject to the GBLA. They believe it is one of the most effective privacy protection tools, and can prevent countless cyberattacks. Although there are still no official legal mandates set in stone by the FTC, companies without robust network security put themselves at severe risk.

Masood is an IT management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source:

https://biglawbusiness.com/cybersecurity-enforcers-wake-up-to-unauthorized-computer-access-via-credential-stuffing/

Posted by Hailey Arteaga.

One of the biggest businesses in America is college sports.  Men’s Basketball is the second highest grossing sport of colleges across the nation.  According to Business Insider, a Division 1 Men’s Basketball teams alone drive-in an average yearly revenue of $7,880,290 (Gaines).  With this much money being streamed to a school each year for a single sport, some critics of the NCAA believe that Division 1 players should receive a salary.  However, some schools took this idea to the next level.  In a recent scandal, the FBI uncovered around 25 D1 colleges committing acts of bribery and corruption in the sport of basketball in an article written by the New York Post (Masisak).  One college under fire for violating the NCAA rule is Seton Hall University.  Recently though, the University has argued that they “have nothing to hide” (Braziller).  So, who is in the wrong?  This post serves as an analyzation of Seton Hall’s past and the basketball allegations that might hurt the business of the athletics department.

The NCAA defines an “eligible” athlete as one that does not accept outside payments because of their athletic status.  This extends to a professional agent bribing players with food, rent, cash, etc.  (Athnet).  Seton Hall was named as one of the schools by the FBI. They reported that the university was paying now New York Nets player, Isaiah Whitehead, extra money to play for the Pirates.  Agents discovered a spreadsheet with players past and present from multiple universities indicating the amounts of money they were being paid to attend and play basketball at their schools.  The spreadsheet revealed that Whitehead in particular received $26,136 his freshman year and was “setting up a payment plan” (Braziller).  This would go against the NCAA rules of amateurism as stated previously.  In more recent news however, The Hall came out and stated that they will be bringing in New York City law firm, Jackson Lewis P.C. to disprove the corruption scandal (Braziller).  Kevin Willard noted regarding the development that “I have a lot of confidence in my staff and ourselves in what we’ve done in the past.  I’m glad the school moved quickly on this so we can move on from it.”  With such a strong assurance of the team’s actions, Willard and the university should be expected to move on from the situation unscathed.

If Seton Hall were to be found guilty of the corruption, it would greatly affect the basketball team and success of the athletic department.  It could potentially risk the Hall’s ability to compete in the NCAA tournament.  The payout for the 2017 NCAA tournament that Seton Hall earned for the Big East Conference last year was $1,711,784 (Kesselring).  This means that not only would an inability to compete in the tournament affect the university itself, but also it would affect the entire Big East Conference.  Some even argue that Seton Hall could risk their 2016 Tournament Champion Title or even Kevin Willard’s position as head coach.  In the end, Seton Hall is risking a lot putting their name in the forefront of one of the biggest, recent scandals to rock college basketball.  If found that they have been giving players money under the table, the university will immediately face heavy financial cuts due to their disobedience of NCAA rules, hurting other sports, other schools, and the entire conference.

Hailey is a student at the Stillman School of Business, Class of 2020.

Sources:

http://www.businessinsider.com/college-sports-revenue-2016-10

https://www.athleticscholarships.net/ncaa-loss-eligibility-payment-agent.htm

https://nypost.com/2018/02/24/analyzing-how-scandal-will-affect-ncaa-tourney-coaches/

https://nypost.com/2018/02/24/seton-halls-plan-to-prove-innocence-in-fbi-corruption-probe/

https://herosports.com/ncaa-tournament/how-much-money-ncaa-tournament-earned-conference-2017-basketball-fund-a7a7

Posted by Claudine Rosca.

Endo International PLC is a generics and pharmaceutical company that delivers medicines to patients in the fields of urology, men’s health, etc. Despite their professionalism, their products allegedly were defective resulting in liability. Product liability is the responsibility that a manufacturer incurs because they sell or create a faulty product. In 2014, Endo “agreed to pay more than $400 milion to resolve lawsuit allegations.”

Their vaginal-mesh implants had eroded in their female patients which cause painful side effects. The devices are used to “support internal organs and treat incontinence,” which is a lack of control over urination or defecation. Officer Rajiv De Silva “said the company way adding $400 million to its $1.2 billion liability reserve for the devices.” The company was blamed for organ damage in women, combining to over 10,000 suits. The issue with the company was their lack of “stricter safety requirements because they are high-risk devices.” As a result of the 2014 issues among companies such as Endo and Johnson & Johnson, the FDA ordered “vaginal-implant makers to study rates of organ damage and complications linked to the devices.”

Following the allegations in 2014, Endo continues to pay millions to resolve the sums of lawsuits against the company’s vaginal-mesh implants. Recently, Endo set aside $755 million for the eroded implants which constitutes almost $2.6 billion that was paid to wipe out cases. Their Dublin-based Endo was shut down after a piling of complaints against their devices. Other previously named companies continue to face thousands of lawsuits from women who argue against their devices. The U.S. FDA continues to increase regulations on mesh inserts but companies continue to manufacture and sell faulty products.

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

Sources:

https://www.bloomberg.com/news/articles/2014-10-01/endo-said-to-pay-400-million-plus-in-vaginal-mesh-accord

https://www.bloomberg.com/news/articles/2017-08-07/endo-sets-aside-775-million-to-settle-remaining-mesh-lawsuits

Posted by He Yin.

Since the beginning of 2017, the combined market value of all encrypted currencies has risen from $17.7 billion to nearly $836 billion on January 5, 2018, more than 4,500% in more than a year. In such a short time, no investor has ever seen a significant appreciation of such an asset class.

China is often seen as one of the biggest battleground states in the secret revolution. Last summer, the Chinese government halted an initial public offering (essentially an initial public offering but used in digital currency) and announced that it would close the country’s cryptocurrency exchange.

Just recently, the Chinese government announced that it would track the facilities of cryptocurrencies such as bitcoin. On January 3rd, a press release issued by the central bank outlined a plan to limit the power supply of some bitcoin miners. Given that China is currently in the currency of mining occupies more than two-thirds of all the processing power of share, the move is an obvious for COINS community, and the evolution of the encryption currency is a whole.

Comment: China has been developing rapidly in the last forty years. Its economy is a well-functioning machine. As for Russia, however, it does not have as much. Its currency, the ruble, has been in turmoil more than once in the past few decades, and its dependence on oil has caused huge swings in its economic growth. So in theory, Russia appears to be the perfect candidate for the bitcoin revolution.

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

Source:

Link: https://www.foxbusiness.com/markets/forget-china-this-country-has-become-the-most-intriguing-cryptocurrency-battleground

Posted by Xin Tao.

“Uber disclosed on Nov. 22 that it paid hackers $100,000 to conceal a 2016 cybersecurity incident in which names, email addresses and mobile phone numbers belonging to some 57 million users around the world were stolen. License numbers of 600,000 Uber drivers were also obtained by outsiders, the company said.”

Now Uber likely to face a barrage of state legal action after breach. Forty-eight states have laws about the breach; they require companies need to inform customers about a data breach, particularly if sensitive customer information was involved. Uber will face different amounts of fines from different states. The charges unsealed by U.S. Southern District of New York were leveled against at an Iranian hacker. The hacker attacked multiple employee accounts, and used the accounts to steal some personal data.

HBO was also a victim of hacking when an attacker released scripts of the popular show “Game of Thrones,” as well as episodes of other shows and a trove of executive emails. In an anonymous email to HBO personnel, the attacker threatened to release more data unless the company paid a ransom of approximately $5.5 million in bitcoin, according to the indictment.

According to Bloomberg News, the attackers accessed a GitHub site used by the company’s software engineers and found login credentials to an Amazon Web Services account. From there, Bloomberg News reported the attackers found a cache of rider and driver information, and later emailed the company asking for money.

When a computer is infected with malicious code, the data on it will be encrypted, until a ransom is paid in bitcoin or another form of cryptocurrency. Personally, I think the most effective way to protect our data is we should not put our personal information on the internet, especially because of the dangers of phishing websites and apps. And we should update our computers regularly to fix vulnerabilities. Also for large companies like Uber, they should take the responsibility to make sure the system is reliable after they receive customer’s information.

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

News links: https://www.wsj.com/articles/hbo-uber-incidents-shed-light-on-ransoms-without-ransomware-1511353574

https://www.wsj.com/articles/uber-likely-to-face-a-barrage-of-state-legal-action-after-breach-1512131094#comments_sector

https://www.wsj.com/articles/uber-hack-fallout-illinois-sues-senators-ask-for-answers-1511825588

Posted by August Pimentel.

President Donald Trump recently had a libel case against him dismissed in the Supreme Court of New York on the basis that his tweets were spreading opinion rather than fact, and therefore could not be held accountable for libel.

The conflict began in February 2016, when Cheryl Jacobus, a Republican strategist who had previously been recruited by the Trump campaign, went on CNN attempting to expose a political action committee which allegedly was partly funding the campaign. Trump responded to the broadcast via his personal Twitter account, saying “Really dumb @CheriJacobus. Begged my people for a job. Turned her down twice and she went hostile. Major loser, zero credibility!” Jacobus sued the then presidential candidate and his then campaign manager Corey Lewandowski for defamation, pursuing damages of $4M. Jacobus stated that after the tweet, she received no more offers to speak and no employment opportunities.

Barbara Ross of the New York Daily News covered this case with an article in October 2016 on the suit, and another released in January 2017 when the case was dismissed.

“Jacobus had appeared 141 times on CNN to discuss the presidential race before the dust up,” said Ross. “But only once on another station after his tweets.”

The hearings in front of Justice Barbara Jaffe of New York revealed that the Trump campaign had indeed recruited Jacobus for a job and discussed terms of the employment, but rejected her after receiving a request for $20,000 per month in salary. Jacobus’ attorney, Jay Butterman, claimed Jacobus’ entire career was destroyed by those tweets, and the Trump campaign lied about her “begging for a job” and “[acting] hostile.” Trump’s attorney, Lawrence Rosen, claimed Butterman and his client to be engaging in “hyperbole” stating: “To a large extent, Twitter is the wild wild West. People say the darnedest things. Everyone understands that when tweets are made, you take it with a grain of salt.”

Justice Jaffe ruled in favor of President-elect Trump and Lewandowski just ten days before inauguration day. In her decision, Justice Jaffe stated that “professional misconduct, incompetence or a lack of integrity may not be reasonably inferred from being turned down from a job.” The judge also commented on the nature of tweets themselves, similar to Rosen’s argument in the case.

“His tweets about his critics, necessarily restricted to 140 characters or less, are rife with vague and simplistic insults such as ‘loser’ or ‘total loser’ or ‘totally biased loser,’ ‘dummy’ or ‘dope’ or ‘dumb,’ ‘zero/no credibility,’ ‘crazy’ or ‘wacko’ and ‘disaster,’ all deflecting serious consideration.”

Butterman and Jacobus plan to appeal the ruling, claiming it a “sad day for free speech.” Reflecting on this case, there may have been some small falsity in President Trump’s tweet in that his campaign did not turn Jacobus away twice. This was not enough, however, to make Trump guilty of libel. That tweet over a year ago, made by the then prominent presidential candidate, can be interpreted as vague. However, if it is true that Jacobus has lost speaking opportunities for which she would have gotten paid because of a crude tweet, it shows that those companies and media outlets did not take Trump’s tweets “with a grain of salt.” The president has recently boasted about the ability of his tweets to obstruct others, citing that no NFL team has signed Colin Kaepernick because they are afraid to get “a nasty tweet from Donald Trump.” Unfortunately for Jacobus’ case, this appears to be an ethical issue rather than a legal one.

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

Sources:

http://www.nydailynews.com/news/national/manhattan-judge-tosses-libel-lawsuit-donald-trump-article-1.2942831

http://www.nydailynews.com/news/politics/cheryl-jacobus-trump-destroyed-career-4m-suit-article-1.2818683

Posted by Anna Fajnorova.

On March 26, a gate agent decided to deny two teenage girls from a flight because they were wearing leggings. The girls were traveling on a company travel pass and their leggings were a violation of the airline’s dress code. United Airlines defended the gate agent’s decision and it led to an uproar with many people on social media after the incident was reported. Now does United, being a privately-owned company, have the right to do what they did?

United Airlines allows customers to fly in leggings, but these girls were “pass rider” users. “Pass rider” is a benefit United Airlines employees receive for working for an airline. Employees are able to travel the world and extend their privileges to relatives or friends as long as they use an airline that follows that policy. Employees and “pass rider” users are considered representatives of United and have a dress code to follow. Because the girls were wearing leggings, they went against the dress code and were denied to fly. Other airlines follow the same policy as United and have a set dress code for relatives and friends that receive benefits from their airline. Southwest Airlines has a “relaxed and casual” dress code, but does not allow “low-cut, skimpy, revealing clothing, short shorts, or gym shorts.” JetBlue also does not allow leggings but finds jogging suits acceptable. Besides leggings, low-cut, revealing attire, and sweats of any kind are not allowed. Employees and pass rider beneficiaries must also have clean shoes as well as cover up their tattoos. Another question that should be asked is does United have the right to tell employees and their families what to wear, especially during their leisure time?

Even though there are critics saying several things such as “how would people know about the policy”, “the policy is outdated and strict”, and “it’s sexist because it singles out attire worn primarily by women”, what United Airplanes did was not wrong according to the article. Many “pass rider” users even agreed with United’s decision and believed the teenage girls were taking advantage of the employee benefit and should have known better. United regularly reminds their employees that when a relative or friend is given the benefits of becoming a “pass rider” user, they need to follow dress code. If this is the case, United only followed policy that employees are regularly reminded of and enforced that policy. Yes, the policy seems outdated because leggings are something that many people currently wear but “pass rider” users represent the company along with employees, so they must follow dress code as well.

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

Source: https://www.washingtonpost.com/news/dr-gridlock/wp/2017/03/27/united-airlines-your-leggings-are-welcome-as-long-as-youre-paying-for-your-flight/?utm_term=.31bfbcfaf365

Posted by Ailinulan Aihemaiti.

Politicians are always prone to controversy, and not even the current President of the United States, Donald J. Trump, is exempt from any of it. In 2010, a class suit was filed against Trump University upon allegations that it defrauded its students. The allegations centered around Trump University engaging in aggressive sales tactics and spreading misleading information. Former students say the university promised to teach Trump’s insider secrets of the real-estate business, but after they paid $35,000 for an education, they said they received no such “secrets.” One such student, Bob Guillo stated the Trump University advertised tricks “included using the real estate website Trulia.com to search for properties and learning about tax deductions on the Internal Revenue Service’s website” (Time).  Many others said they received a great education.

After a seven-year long battle, the Trump University lawsuit finally ended on March 31, 2017 when a federal judge declined the request from a Florida attorney to “opt out of the $25 million Trump University global settlement” (Courthouse News Service). The final settlement of $25 million will be a much better deal for the students, giving back 90 percent of what students invested in Trump University rather than the 50 percent of the November settlement. Class attorney Rachel Jensen provides even more good news, saying that the students should get their checks a few months from now if there are no appeals.

However, if an appeal is filed, the court battle could go on for years, and the settlement payments will also be held up. The prospects are still unclear as Sherri Simpson, former student who spent $20,000 on Trump University in 2010, has made movements to opt out in the March 30 hearing; she has expressed her desire to opt out to file her own fraud case against the University, despite filing an earlier claim to recover damages. Although Simpson’s proposal was rejected by a federal judge, she still has 30 days to file an appeal.

Ailinulan is a management major at the Stillman School of Business, Seton Hall University, Class of 2017.

Sources:

http://time.com/money/4573705/trump-university-lawsuit/

http://www.courthousenews.com/judge-signs-off-25m-trump-u-settlement/

http://www.courthousenews.com/wp-content/uploads/2017/03/Trump-U-Settlement-FINAL.pdf

Posted by Alexandra Entrup.

In December 2016, the United States v. Nosal (Nosal II) case was heavily questioned. David Nosal worked at KFI, Korn/Ferry International, however, in 2004, he made the decision to leave the company. Despite leaving the company, he resumed working as a contractor under an agreement that forbade competition with KFI. Regardless of the agreement, Nosal among additional employees were in the process of establishing a competing business. The company utilized the database, Searcher, to hold “information about over a million executive search candidates” (Harv. L. Rev.). Though Nosal and his colleagues took information from the database for their own use using their own login information, their credentials were rescinded after their decision to leave the company. Upon noticing that their login information no longer worked, they approached Jacqueline Froehlich-L’Heureaux, Nosal’s assistant during his time at KFI. Froehlich-L’Heureaux remained an employee despite Nosal’s absence so they decided to ask her for her own credentials. She gave them her username and password and Nosal and his partners utilized this information on multiple occasions. The article suggests that they accessed the database using her credentials “on at least three discrete occasions” (Harv. L. Rev.). An anonymous tip was sent to Korn/Ferry International and an investigation ensued.

The defendant was convicted and Nosal was accused of “nineteen criminal counts, five of which alleged CFAA violations under the ‘exceeds authorized access’ clause of §1030(a)(4) while Nosal was a KFI employee” (Harv. L. Rev.). CFAA, the Computer Fraud and Abuse Act, discusses computer use, specifically hacking. The act states that the invasion of a computer system is considered a crime. The article further discusses the CFAA and its application to the case stating, “the CFAA imposes criminal penalties on whoever ‘accesses a protected computer without authorization, or exceeds authorized access’ to perpetrate a fraud” (Harv. L. Rev.). This statement is especially important to the case because it dismisses Froehlich-L’Heureaux’s decision to give Nosal and his partners her credentials. Instead, it blames Nosal for using this information in a deceptive manner, perpetrating a fraud. Throughout the case the term “without authorization” was referred to as “an unambiguous term with a plain meaning”, implying that there aren’t any alternate interpretations.

In the Nosal I case, the CFAA nineteen criminal counts previously mentioned were dismissed. However, following the dismissal of these counts, further counts were filed. “In 2013, the government filed a superseding indictment with three CFAA counts resting on accomplice liability for the three times Nosal’s partners, without authorization, accessed Searcher with FH’s credentials after they had left the firm. The government also indicted Nosal on two trade secret misappropriation counts under the Economic Espionage Act and one count of conspiracy. A jury found him guilty on all counts” (Harv. L. Rev.). All arguments that Nosal proposed were rejected by the court. Looking at previous cases, it was certain that authorization much be approved by the computer owner. Nosal was obviously not given authorization, evident through the revocation of access to the system. The importance of authorization is common knowledge which is evident in the article’s statement, “the majority’s view that only the owner of the system has authority to grant access undermines the authorization upon which many forms of commonplace computer access depend.” The article further explains this belief with a comparison to social media, “it could be a crime for an individual to log in to someone else’s Facebook account with that person’s permission, simply because the system owner prohibits it” (Harv. L. Rev.).

Alexandra is a finance and information technology management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source:

http://harvardlawreview.org/2017/02/united-states-v-nosal-nosal-ii/

Posted by Jayce Chavez.

Mark Moskowitz, a 48-year-old Short Hills New Jersey resident, pleaded guilty before U.S. District Judge Katharine Hayden to one charge of wire fraud. He admitted to fraudulently using investment money for his personal use. He ran a trading company and defrauded investors of more than $675,000 and used the money for himself. His company was called Edge Trading which was created in 2012, he, “told his investors that the company invested in equities and contracts and was growing even though it was not.” Moskowitz was fined, separately by the New Jersey Bureau of Securities, for$1 million in civil penalties for the sale of fraudulent unregistered securities and misusing investor’s funds. He will be sentenced July 5, 2017 and could face a maximum of 10 years in prison and $250,000 fine.

Joseph Meli, a 42 year old Manhattan New York resident; and Steven Simmons, a 48-year-old Wilton Connecticut resident were arrested in late January this year, “on charges alleging they enticed wealthy individuals to make multi-million-dollar investments.” These gentlemen were caught by a civil complaint to the Securities and Exchange Commission, claiming that this Ponzi scheme led people in 13 states to invest $81 million. This scheme included investments in businesses that would purchase large sections of tickets for concerts and musicals. The SEC says that at least $51 million of the $81 million was used to pay off other investors and for personal expenses for Meli, Simmons, and other coconspirators. Only Meli was charged with the civil complaint but both men were charged criminally with conspiracy, securities fraud and wire fraud. Both men were then freed on a $1 million bail after a prosecutor’s request for them to be held without bail was rejected.

Both of these cases are similar not only because they were both people scheming investors of their money but large sums of the money were used for personal expenses. These cases had criminals who fraudulently used investors’ money for everything but what they had promised the investors. In the first case, Moskowitz had used most of the $625,000 for himself, while on the second case, the 63% of the $81 million was fraudulently split amongst Meli, Simmons, and other co-conspirators. Moreover, this shows that there are Ponzi schemes that range between hundreds of thousands of dollars to millions of dollars. Thus, we must be careful when investing into corporations which are not well-known or established.

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

Sources:

http://www.nj.com/essex/index.ssf/2017/03/short_hills_man_admits_to_675k_ponzi_scheme.html

http://www.foxnews.com/us/2017/01/28/2-men-allegedly-raised-81m-in-hamilton-ponzi-scheme.html

Posted by Michael Martin.

Six former executives and managers of the pharmaceutical company Insys Therapeutics Inc. were arrested “on charges that they led a nationwide conspiracy to bribe medical practitioners to unnecessarily prescribe a fentanyl-based pain medication and defraud healthcare insurers” (Dep. of Justice). The spray drug, named “Subsys,” is a strong opioid that is typically prescribed to cancer patients suffering from breakthrough pains. Insys bribed doctors to prescribe their drug to patients, many of which did not even have cancer, in high doses. Insurance companies became skeptical of the drug, because it was not prescribed to cancer patients, which resulted in the former executives of the company to mislead providers with the ““reimbursement unit” which was dedicated to obtaining prior authorization directly from insurers and pharmacy benefit managers” (Dep. of Justice).  Employees of this unit were pretending to call insurers from a doctor’s office. “Insys also set up its phone system to block the origin of the calls” (Thomas).

Insys was writing off the bribes and kickbacks to the doctors as speaking fees. The issue with the speaking fees is that the “events” held by Insys were usually entirely fabricated on paper, and were really just a few Insys members having dinner with a “speaker” doctor at a fancy restaurant. On one occasion, Alec Burlakoff, the former vice president of Insys, texted a sales representative about the communication skills of the doctors saying “They do not need to be good speakers, they need to write a lot of” prescriptions for Subsys. In the case of an Alabama doctor, after becoming a paid speaker, his prescription count increased from two a week to about eleven (Thomas).

The actions of the Insys executives are not only illegal, but are also highly unethical. Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, said “[Insys] contributed to the growing opioid epidemic and placed profit before patient safety” (Dep. of Justice). Michael L. Babich, 40, the former CEO and President of the company, “is charged with conspiracy to commit racketeering, conspiracy to commit wire and mail fraud and conspiracy to violate the Anti-Kickback Law.” Burlakoff, Richard M. Simon, 46, former National Director of Sales; and Regional Sales Directors, Sunrise Lee, 36, and Joseph A. Rowan, 43 “are charged with RICO conspiracy, mail fraud conspiracy and conspiracy to violate the Anti-Kickback Law.” And former Vice President of Managed Markets, Michael J. Gurry, 53, “is charged with RICO conspiracy and wire fraud conspiracy” (Dep. of Justice).

The charges for RICO and fraud crimes are “no greater than 20 years in prison, three years of supervised release and a fine of $250,000, or twice the amount of pecuniary gain or loss.” Plus a mere $25,000 fine for violating the Anti-Kickback Law, with a maximum of five years in prison.” This minimal punishment becomes even more disturbing when you realize that the “actual sentences for federal crimes are typically less than the maximum penalties” (Dep. of Justice).

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

Sources:

https://www.justice.gov/usao-ma/pr/pharmaceutical-executives-charged-racketeering-scheme

https://www.nytimes.com/2016/12/08/business/insys-therapeutics-arrests-fentanyl.html?_r=0

Posted by Nicole Boodhoo.

About 6 years ago, Apple first sued Samsung over the design of their Galaxy S series. Apparently, the designs of the phones infringed on a patent that was created over the design of the original iPhone.  The court closed the case in December of 2016, ruling in Samsung’s favor saying they did not need to pay the $399 million to Apple, but it is now reopened. The court case is not going to be about whether Samsung did or did not infringe on the patents created by Apple but rather how damages will be calculated. Originally, Samsung would have had to pay Apple a percentage of each sale. However, the justices disagreed and stated that they only needed to pay for the components that were claimed to be infringed upon.

According to the article written by Julian Chokkattu, he stated,

“In delivering the court’s majority opinion, Justice Sonia Sotomayor wrote that “article of manufacture” — the legal term that refers to both a product sold to a consumer and a component of said product — has a “broad meaning,” and that an “article” could refer to “a particular thing.” In Samsung’s case, an “article” could be an infringing smartphone’s appearance, for instance, or software feature” (1).

The design patents are at question in this case. A design patent is what protects the look of the product and what makes the product unique. In 2012, the court sided with Apple stating that Samsung did copy the design, featuring “the black rectangle shape and rounded corners, the bezel, and a patent that covered the graphical layout of icons of the iPhone” (Chokkattu 1).  The law states that whoever applies the patented design, without license of the owner, is liable to said owner “to the extent of his total profit, but not less than $250, recoverable in any United States district court having jurisdiction of the parties” (1).  Samsung and all the supporters believe that total profits should not be included in the reward since smartphones are filled with hundreds if not thousands of components that are patented from neither of these two companies.

Apple feels that everything within the phone, as well as the looks of the phone, is what sells the smartphone and states that, “removing the need to pay total profits would hamper legal protection for new products and designs” (Chokkattu 1). Although Apple agreed that “article of manufacturer” could represent only specific features of the product and not the whole thing, financial damage would prevent people in the future from pocketing designs of other products. As the discussion goes on, the design on the Beetle is brought up as a reference stating that one may not buy the car for just its looks, but might be a primary factor into driving sales up. The article states that, “the infringement wasn’t found on the whole phone,” Samsung attorney Kathleen Sullivan said after the hearing. “It asserted three narrow patents. The patent doesn’t apply to the internals of the phone, so Apple doesn’t deserve profits on all of Samsung’s phone” (Chokkattu 1).  She also states that if they do win and are awarded total profits that it would devalue all of the other patents within the smartphone, which roughly has about 250,000 patents. Apple states that this is the 11^th time Samsung has copied an idea and they have been found guilty of it. They believe that if this continues it will pose risks to future designs.  In the last 100 years, a design patent case has not been ruled on in the Supreme Court.

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

The Justice Department charged fourteen people, including nine current or former FIFA figures and five sports marketing professionals, for allegedly “‘foster[ing] a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,’” FBI Director James Comey said. The government alleged racketeering and corruption involving more than $150 million in bribes and kickbacks spanning two decades.

“The investigation grew out of allegations of payoffs to officials who decided where to hold the next two World Cups, the biggest international event in sports, that landed the games in Russia for 2018 and Qatar in 2022, according to three senior U.S. law enforcement officials. The U.S. was runner-up to Qatar’s win.”

FIFA appears to be relieved with the indictments. In a statement posted on its website, it said it “welcomes actions that can help contribute to rooting out any wrongdoing in football.”  FIFA further said, “We are pleased to see that the investigation is being energetically pursued for the good of football and believe that it will help reinforce measures that FIFA has already taken.”

The Clinton Foundation is under scrutiny for accepting money from FIFA and Qatar.  “In 2014, the Qatar 2022 Supreme Committee, set up by the Qatar government to ensure a successful FIFA world cup, awarded the Clinton Foundation between $250,000 and $500,000; the State of Qatar donated between $1 million and $5 million.”  According to the Clinton Foundation website, the money was for “research and development for sustainable infrastructure at the 2022 FIFA World Cup to improve food security in Qatar, the Middle East, and other arid and water-stressed regions throughout the world.”

Posted by Natalie Kenny.

The parent company that makes Old Spice, Proctor & Gamble, is being sued by Rodney Colley of Alexandria, Virginia because of a defect in the deodorant. The plaintiff shared photos of himself with burns under his arms which he claims are from Old Spice deodorant. The plaintiff says he suffered “severe rashes, burning, and discomfort” after he used the product and he had to stop using it. In the photo, the rashes look severe.

Procter & Gamble, the parent company that owns Old Spice said that the people who experience rashes and irritation from using the deodorant are in the minority and only make up a small fraction of the company’s overall users. After news broke of this lawsuit, several other individuals came forward with stories about how the Old Spice deodorant gave them rashes and scabbing. The five million dollar lawsuit was filed in U.S. District Court in Ohio and is awaiting trial.

In my opinion, it is not okay for this deodorant to be giving people severe rashes. Even though Proctor & Gamble stated that only a small percentage of users get burns or rashes from the product that is simply not good enough. Consumers should not have to be concerned whether or not they will have a severe reaction to a product that they use every day.

I think that Proctor & Gamble should have to pay for the medical bills of the people who got severe reactions from this product as well as punitive damages to stop them from doing this and to get other companies to make sure their products are safe before selling them to the public.

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

Posted by Romelia Argudo.

Usually when an employee of a certain company works there for a long time, it is to their advantage as they have most likely gained experience for another upcoming job. Except in this case, Arthur Valdez was out of luck when he acquired a new job as Target’s chief supply chain and logistics officer. Having worked for Amazon.com for 16 years, Valdez has left his logistics position in this company and was sued for a breach of a “noncompete agreement.” These agreements ensure that an employee of a company, if they quit, will not compete against their business.

This can get a little tricky when switching positions at Amazon.com and moving to Target which is one of their biggest competitors. Amazon says they wish to prevent him from using the “confidential strategic knowledge” he possess from working in their company in his new job at Target. Because of this, Amazon has sued Valdez for the breech of noncompete agreement that binds him “to an 18-month timeout in which he cannot compete against his former employer.” It is said that over the span of 16 years, Valdez has gained knowledge on “’exact title and topics’ of a top secret meeting dubbed ‘Holiday Lessons Learned,’ which is ‘one of the most confidential aspects of Amazon’s analysis and planning’ and included ‘confidential analysis of Amazon’s competition against Target.’”

Amazon is not happy that Valdez has not specified his new roles he will be playing in Target which can harm Amazon. Most cases like these would settle before they are taken to court or with a lawyer, but until this point, nothing is being resolved and an agreement has not been reached yet. Apart from this, Amazon states “in the filing that Valdez’s 2015 compensation exceeded $1 million.”

Until something is settled for sure, Valdez will start his new position as a logistics executive.

Romelia is a marketing major at the Stillman School of Business, Seton Hall University.

Posted by Romelia Argudo.

One of the biggest setbacks for a company can be when they are hit with a lawsuit – especially one that involves settlements for 34 million dollars. Philips Respironics, Inc, known for their sleeping masks given to treat sleep apnea patients, was hit with a 34.8 lawsuit for violating the Anti-Kickback Statute. This “prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program Medicare. . .” In essence, this statute prohibits any exchange of value to reward the referral of healthcare program business. The United States alleged that Phillips Respironics, Inc. violated this law through means that allowed them to make a bigger profit.

The company sold their machinery to durable medical equipment (DME) suppliers. The deal was if DME suppliers would purchase Philip Respironic’s products, they would get free customer support for their clients to cover any of their needs. But instead, DMEs were charged monthly fees in accordance to the amount of patients that were using products from Philip Respironic’s competitors. So overall, these suppliers were being charged with fees if they supplied patients with products that were competitors of this company. This would drive DME suppliers to purchase more products from this specific sleep mask manufacturer.

US Attorney Bill Nettles says that “this office has made a substantial commitment to combatting fraud.” Not only has this move influence a consumers decision in what to purchase, but other companies as well. This was clear to Dr. Gibran Ameer who brought attention to this case. As a DME supplier worker, he noticed this and is now considered a “whistleblower” for informing US Attorneys of this wrong doing. As a result, Ameer is being rewarded $5.38 million for this moral act.

Special Agent Derrick L. Jackson of the Department of Health and Human Services says that “we will continue to investigate such business arrangements, which threaten the integrity of federal healthcare programs.”

In doing so, this encourages businesses to act as business ethically as much as they can as well as following business law.

Romelia is a marketing major at the Stillman School of Business, Seton Hall University.

Posted by Caleb Sink.

A Florida jury recently found Gawker Media responsible for $25 million in punitive damages for publishing a sex tape of Hulk Hogan. Hogan, a former professional wrestler claimed he did not know he was being taped. $15 million of was awarded against Gawker Media and the remaining $10 million will be charged against Nick Denton the owner. These punitive damages come in addition to the $115 million the jury imposed last week.

Hogan’s lawyers wanted to add punitive damages despite Gawker Media’s lawyer’s claims that the $115 million was “debilitating” enough for the company. Michael Sullivan stated, “The $115 million judgment is punishment enough and is already far beyond their means.” The company is only worth $83 million buy itself and Nick Denton has a total of $121 million.

In my opinion Gawker Media was in the wrong completely and definitely got what it deserved. However, considering the company is only worth $83 million, I feel as if the punitive damages on top of the $115 million were irrelevant, as it looks as if the company is already going to be depleted of all of its assets anyways.

Gawker Media expects the case to be overturned by an appeals court.

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

Posted by Matthew Carden.

Uber over the past few years has begun to take over for many taxis in many cities across the United States. In Newark, “There’s a war on wheels brewing outside the city’s two largest transit hubs.” This ordinance is referring to both Penn Station and the airport, where thousands of people travel to and from every day. In early January, Evans Anyanwu warned Uber that they were violating a city ordinance because the Uber cars are unlicensed taxis. Because of this, the City has said that they began towing cars on February 22 with no sign of ending the ban. The City was, “pushed largely by unions and other taxicab organization who say their profits have been cut by as much as 80 percent.” The taxi drivers had taken this into their own hands and were most likely the reason that an ordinance like this was put in place, because in January, they protested for regulation outside of Newark Airport.

Uber has not let this ban stop them from continuing their service throughout the Newark area. The article states that, “Uber, however, appears undeterred.” Instead of encouraging their drivers to stop, they have encouraged them to continue taking these routes. With Uber encouraging this practice, they may see their costs go up as they have promised to reimburse the drivers for anything that is to happen because of this ban. Uber in their statement in response to this said, “’Instead of trying to restrict competition and consumer choice, Newark should be welcoming the thousands of drivers who use Uber to earn income and support their families.’”

This situation could turn out to be either good or bad for Uber, but I believe the Newark is in the wrong here. The first question that comes to my mind when I read it is, how do they know it is an Uber? This is a case that Uber can most definitely win because this is similar to a case in New York verse the yellow cabs–and they won that.

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

Posted by Spencer Sink.

Volkswagen is currently in the process of being sued for deliberately manufacturing cars that essentially cheat the emissions test. This case is somewhat similar to the cases with Toyota and General Motors, as Volkswagen will most definitely be forced to compensate the current vehicle owners for selling faulty products. However, we will most likely see even higher punitive damages being paid in the Volkswagen case because of the fact that Volkswagen admitted to intentionally cheating on emissions. The Toyota and General Motors cases were both honest mistakes made by the companies.

Volkswagen was given a short amount of time to attempt to find a way to mechanically fix the issue in the cars, and make them environmentally acceptable. However, even if they did fix the emissions, either the fuel efficiency or the overall vehicle performance would change, forcing Volkswagen to compensate owners for the loss in value.

What Volkswagen did was completely wrong, and must be punished accordingly. Deliberately cheating the emissions tests, and creating excess pollution, is unacceptable. If it were up to me, I would force Volkswagen to pay high punitive damages to ensure that nothing like this ever happens again. Volkswagen owners should be compensated accordingly for being blindly brought into this situation.

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

Posted by Spencer Sink.

Recently, Arthur Valdez, a former employee of Amazon.com, was hired to work for Target as their chief supply chain and logistics officer–but there may be a problem. The problem is that he could be forced to disclose classified information about Amazon.com and how they run their business. Because of this, Amazon.com sued Valdez for an unspecified amount of money on the grounds of the “non-compete clause” in his employment contract. The non-compete clause states that one cannot work for a rival company of his previous employer until 18 months have passed.  Valdez was hired before the required 18 months had passed.

This is a huge case for Amazon.com, as Target has recently been trying to increase sales in their online store. Valdez, having worked with Amazon.com for 16 years, could most definitely share all of the secrets to success with Target, which would negatively affect the business of Amazon.com. Target is defending Valdez by saying that they have taken the necessary steps to ensure that the secrets of Amazon.com are not disclosed to them.

It is going to be interesting to see what happens with this case. If I had to make a prediction, I would say that Amazon.com will win this case, as I feel that Target has no real evidence supporting their statement that Valdez has not disclosed any information to them.

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

Posted by Brandon Glover.

On February 23^rd, Marc Moschetta filed a lawsuit against big-name company Wal-Mart for, “deceptive business practices.” A jury trial is being sought on the basis of “material misrepresentations.”

Moschetta purchased “Great Value’s ‘100% Grated Parmesan Cheese,’” but it was later found out that it contained 7 to 10% cellulose, which is a filler that stems from wood chips. Issues such as this one are not completely unfamiliar to the legal system. In 2012, a Pennsylvania cheese vendor was investigated for the use of cellulose in their products. The vendor was also accused of mixing in various types of cheeses in their products, while simultaneously testing positive for Listeria.

Bloomberg News has highlighted cellulose findings in various cheese products. Companies such as Whole Foods, Jewel-Osco, and Kraft Heinz as well have been guilty of such findings. Attorney Jason Sultzer, states “[that] the case isn’t about consumers getting sick. Regardless of the price of the product ($2.98), people are still buying the product based on the label.” Sultzer tries to gain public sympathy to the cause by alluding to parents giving it to their kids with their food.

Wal-Mart spokesman Randy Hargrove told CNBC, “we know earning customer trust starts with high standards for the products we carry. We take this matter seriously. We will review the allegations once we have received the complaint and will respond appropriately with the court.”

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

Posted by Brandon Glover.

Andy Beshear, Kentucky Attorney General, claimed that Volkswagen violated consumer protection law through a cheating emission scheme. Beshear is seeking civil penalties and restitution for the owners of the 3500-plus owners of Volkswagen registered in Kentucky. Regulators state that the “software . . . was designed to cheat on required emissions tests.” The suit was filed in Franklin County Circuit Court in Frankfort with belief that Volkswagen, “must be held accountable for false promotion of its vehicles.”

Jeannine Ginivan, a spokeswoman for Volkswagen, stated the company does not normally comment on legal matters. Despite this, she said that the company is “working with federal environment regulators and others to resolve the matter as quickly as possible.”

Beshear, on behalf of the state of Kentucky, is not the only state to file a lawsuit. Texas, New Mexico, New Jersey and West Virginia, have all filed lawsuits as well against Volkswagen. In addition to the aforementioned lawsuits, Volkswagen also faces hundreds of suits from actual vehicle owners. Prior to taking these suits into account, “the company potentially faces more than $20 billion in fines from states and federal regulators.”

Volkswagen confessed that it used illegal software in its “Clean Diesel” engines in September. The software helped vehicles pass emission tests, while emitting nitrogen oxide that proved to be harmful into the atmosphere when operated.

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

Posted by Brandon Glover.

The U.S. District Court in Riverside will be the venue of the case between tech giant Apple Inc., and the U.S. Federal Government. The FBI has requested Apple’s help in bypassing the iPhone encryption security of one of the shooters in the San Bernardino incident. The judge who presided over the initial case, ruled in favor of Apple, stating “prosecutors were stretching an old law ‘to produce impermissibly absurd results.’”

Prosecutors argued that the phone belonging to Farook most likely contained evidence from the attack on December 2, 2015; where he and his wife, Tashfeen Malik, murdered 14 people. The two were later shot and killed in a police shootout. The FBI believes the couple was inspired by the Islamic State, and that the unlocking could reveal details about the attack as well as potential collaborators.

The Federal Government has argued that Apple could easily create a software that could bypass the security of the phone, retain its information, and then destroy it shortly thereafter. However, Apple has responded to that claim, stating “that creating software is a form of speech and being forced to do so violates its First Amendment.”

The federal government is currently appealing the ruling, which will most likely reach the Supreme Court.

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

Posted by Robert Santos.

Usually when people go on vacation, they come home with a souvenir of some sort such as a hat or refrigerator magnet. Lauren Guerra will be going home with a little more than a silly souvenir–in fact she will be going home with 3.5 million dollars. This will be a trip to remember for Guerra but not in the way one would want. Although Guerra will be going home a very rich woman, the damage that has been done is something that all the money in the world couldn’t fix.

On October 27, 2013, Lauren Guerra was one of the many passengers on the Star Line Tours of Hollywood bus giving a tour to passengers of Hollywood. These buses are popular and very well known for they give tours of the famous locations in California, and are known for the unique design of not having a roof but a open deck level for tourists to have a better view of sites and take better pictures. Unfortunately this would be Guerra’s biggest regret, for while aboard one of these buses, a tree branch flew into her face leaving her permanently disfigured. She immediately sued the company after hearing of another death on the same type of bus under the same company. In July 2014, and has been in a back and forth battle since then.

The court battle was vigorous and both sides seemed to have fair arguments. Mark Cunningham who is the attorney for the Starline Bus Company argued that Guerra was at fault because she was standing while the bus was in motion and also was drinking prior to being on the bus. Brian Kabateck, who is Guerra’s attorney, responded by admitting his client did indeed have a drink or two before entering the bus. But there was no way anyone could of avoided this injury, sober or not. Guerra’s attorney argued Star Line could have done more to prevent the situation such as having a worker on the second level of the bus, and also having individuals scout to see what type of environment the bus routes consisted of before actually allowing the buses on them. After a day-long discussion among jurors, the court finally awarded Guerra a settlement of 3.5 million dollars.

Something says that whether you weigh the negatives or the positives, Guerra will never forget this vacation.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Robert Santos.

It seems that multiple companies are beginning to merge in an attempt for one company to make a larger profit and the other company to remain alive. Some companies tend to merge in order to both strengthen their profits and publicity. In this specific case, these companies merged in order to create a better and more powerful drug that could be beneficial and a game changer for individuals who suffer from multiple sclerosis. Or so it seemed. Unfortunately for these French companies, there well planned venture did not go as planned.

In 2011, a giant French pharmaceutical company known as Sanofi acquired Genzyme, a small biotech company based in Cambridge, Massachusetts. Sanofi paid 20 billion dollars for the company, and although that seems a bit much for a small-time company, Genzyme was making strides to create a powerful and promising treatment to multiple sclerosis called Lemtrada. It seemed like a good deal that would not only benefit the two companies but the world as well.

Unfortunately things did not turn out for the best with this venture between the two companies. It turned out that Sanofi was developing their own treatment to multiple sclerosis. The drug is called Aubagio and would have been a competitor against Lemtrada. Sanofli was faced with a dilemma: they could have followed F.D.A regulations and worked to seek approval for Lemtrada, or finish working on Aubagio. The only catch would be that by focusing on Lemtrada, Sonafli would have to give additional payments to the Genzyme rights holders in the estimate of 3.8 billion dollars. Of course Sonafli choose the latter option and focused on their drug without the right holders of Genzyme knowing, and now a lawsuit has been issued.

A lawsuit was filed against Sonafli by Genzyme rights holders under the claim that Sonafli failed to fulfil its obligations under their deal. Because of this, the individuals who invested in Genzyme have not received the money owed to them in a sum of 708 million dollars. The lawsuit claims Sonafli may have taken it upon themselves to slow the approval of Lemtrada through the F.D.A in order to avoid having to pay the right holders of Genzyme, while the approval of Sonafli’s drug Aubagio was an easier process and did not have as much difficulty of being approved as Lemtrada did. It has already been noted by F.D.A officials that the time process for Lemtrada to be approved took longer than it should have, therefore, it already seems that Sofali is in the wrong.

Unfortunately, this is a case where the wellbeing of individuals is outweighed by the possibility of profit. If what Genzyme is claiming is true, we would have been witness to another company thinking about their pockets before the health of many. Considering the impact these drugs could have had on the lives of the somewhat 2.3 million people in the world who suffer from multiple sclerosis, it is a sad thing to see money interrupting the process of progress. Hopefully, we see some agreement and it happens as fast as possible so these companies can go back to focusing on what’s important, and that’s saving a life.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Deane Franco.

In a recent article posted in the Wall Street Journal, I read about General Motors being charged with punitive damages due to a defective part causing multiple deaths. General motors had been in the process of recalling millions of vehicles, when a defective ignition switch caused 100 or so deaths.

The punitive damages will be limited to the extent of a lawsuit based on claims and knowledge that GM had of a new company auto maker’s 2009 restructuring. GM attempted to prevent plaintiffs for bringing punitive damages based on personal injury or wrongful death. Unfortunately for GM, Robert Hilliard who is representing all those injured by GM feels that punitive damages “are the only way to properly compensate victims who have been harmed by defect.” This is because punitive damages are meant to be a large enough punishment to the corporation to send a notable message with the intent of assuring the corporation understands its wrong doing.

Although GM tried to fight the punitive damages, the plaintiffs won outright. What this means for GM is that punitive damages could reach millions or even billions of dollars awarded to those affected, depending on the ruling, previous defective GM part cases may also be included.

GM has already paid $935 million in damages and has also agreed to $625 million in compensation for the victims. But we will see if the court will stop there. Moreover, GM is being considered for additional charges because they had acknowledged that they mislead regulators about the defective car parts and still put them into production. The hairy part, however, comes in when GM addresses their bankruptcy filing, because technically, “Old GM” filed for bankruptcy and would be responsible for all these defective parts liabilities and, “New GM,” the product of the bankruptcy reorganization, is a new company separate from the actions of the old.

This article relates to the discussion post this week in class where we discussed the hot coffee spill in Liebeck vs. McDonalds. In that situation, punitive damages were used not necessarily as a fair compensation to the victim, but to ensure McDonald’s knew of its intentional wrong doing and would be more likely to halt such procedures.

The pricing of the punitive damages was said to be very important for Mr. Hillard because he knows that those damages tend to run very high and would lead to fair compensation for the victim’s losses. This is a little different from the Liebeck case, because in that case, there appeared to be dual responsibility as to   both the temperature and the spilling of coffee; in this GM case, all responsibility falls on the manufacturer for selling a defective car which caused death to numerous victims. It does not matter that GM has rebranded itself after going through bankruptcy filings.  At this point in time, there may be products on the market that have not been recalled, which caused injury and or death to numerous victims. For these reasons, the punitive damages should be high to balance out the victim’s loss and GM’s punishment.

Deane is a member of the The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, and a finance and information technology management major, Class of 2018.

Posted by Abigail Anaemeje. 

Yet, another automobile scandal! In September, the Environmental Protection Agency found that Volkswagen sold 482,000 cars in the U.S. that contained a “defeat device.” This type of software was used in diesel engines, “that could detect when they were being tested, changing the performance accordingly to improve results.” The result of this led to the “engines emitting nitrogen oxide pollutants 40 times above what is allowed in the US.” In addition, in November of this year, Volkswagen also found irregularities of carbon dioxide emissions levels in about 800,000 cars in Europe. In response to the emission-cheating scandal, Volkswagen has acknowledge their failure. As a result, they will have to pay a fine to the EPA of $37,500 for every vehicle that goes against the allowed standards.

This issue has not only effected the U.S. and Europe, but also France, South Korea, the UK, Italy, Canada, and Germany. In total, 500,000 cars in the U.S., 2.4 million in Germany, and 1.2 million cars in the U.K. have been recalled as a result of the emissions scandal. So far, no employees have been directly fired over the incident. However, the management board member and the head of sales and marketing, Christina Klingler is leaving the company on an unrelated issue.

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

Posted by Abigail Anaemeje.

In September of this year, a settlement was finally reached involving GM and their issue involving small- car ignition switches. In the last year, the company has had to recall over 2.6 million of their older cars to replace defective switches that, “shuts off the engine and disables power-assisted steering, power brakes and the air bags.” Such problems have been found in models such as the Saturn Ion and Chevrolet Cobalt. This deadly case drew even more attention when it was the cause of at least 124 deaths and 275 injuries. GM, the Detroit automaker, admits that, “some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year.” After hiring a federal prosecutor, Anton Valukas, he discovered that there has been no wrongdoing made by the top executives. However, in light of the incident, 15 employees of GM have been fired for falling to act in correcting the issue.

Overall, GM Motors will have to pay a wire fraud charge of $900 million in a late prosecution agreement. As for the families who have lost their loved ones, each will receive at least $1 million. In addition, $625 million has been set aside to compensate people who will agree with the settlement. Ironically, this case occurred a year after Toyota was caught hiding information about its defects that caused similar outcomes. Since it was much severe, Toyota agreed to pay a penalty of $1.2 billion; making it the largest penalty enforced on an automobile company.

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

Posted by Yasmine Miller.

Around the time of July, 2015 Whole Foods was being sued for misleading sugar claims. Shoppers of Whole Foods were angry when discovering that the evaporated cane juice is actually sugar. The company has built their popular reputation on only selling foods that are supposed to be healthier than the foods that you would get in local grocery store. Whole Foods has been fighting against their allegations in the misleading and false advertisements on their cookies.

According to the article “The plaintiffs allege that Whole Foods called sugar “evaporated cane juice” on the label of its Gluten Free All Natural Nutmeal Raisin Cookies in an attempt to make consumers believe that the cookies do not contain as much sugar as they in fact contain.” Further, still today Whole Foods denies the claims in the Missouri lawsuit. “In their filing in support of this motion, they argue that no reasonable customer could have been led, by the label on its cookies, to believe that the product didn’t contain sugar.”

Whole Foods mislead their customers by conceiving them that their healthy snack (cookies) weren’t as healthy as everyone thought. The company mislead and falsely advertised their cookies and violated laws that are in place to protect clients from being misled about products and or services. From my understanding, businesses are not allowed to make statements that lead to incorrect impressions.

Whole Foods violated the Code of Conduct in Business for their deception and dishonesty towards their customers. A code of conduct (also known as the code ethics) provides employees with guidance for handling difficult ethnical situations related to the business. Whole Foods definitely violated this conduct.

Yasmine is a psychology major at Seton Hall University, Class of 2017.

Posted by Leonardo Terzulli.

Two new cases that have just arose, DraftKings and FanDuel, two one-day fantasy sports websites that guarantee immediate cash payouts, have been banned in the state of New York. New York’s Attorney General Eric Schneiderman, sent a cease-and-desist letter earlier this past week accusing FanDuel and DraftKings to be considered illegal gambling. This whole debate started over news that had been circulating that an employee who worked for DraftKings won $350,000 in a contest on the website. There were allegations that the employee had inside information that was used to help him win the contest. DraftKings response to the allegation was “the information was only available after player lineups had been locked in.” Both companies claim that employees are banned from participating in competition on the website, and failed to check-up on internal controls.

Both DraftKings and FanDuel have chose to file lawsuits feeling that the Attorney General wasn’t fair in his cease-and-desist order. “The two companies made separate filings that asked the New York Supreme Court to throw out Schneiderman’s order. In its lawsuit, DraftKings argued that Schneiderman’s cease-and-desist order is unconstitutional, saying the Attorney General acted as ‘judge, jury and executioner.’”

While there are already a few states that have prohibited daily sports, I feel that this case is really going to be contingent on the employee who violated the rules and lack of check-up on the internal control in the companies.

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

Posted by Leonardo Terzulli.

McDonald’s has recently been involved in a case of a customer, Lynn Gipson, having hot water spill on her at a McDonald’s drive-through. The incident happened in 2012 when a cup’s lid popped off, “spilling the scalding water and causing second-degree burns on Ms. Gipson’s thigh and stomach,” a quote from the court documents. This incident is similar to the 1994 incident when Stella Liebeck sued McDonald’s in the case Liebeck v. McDonald’s Restaurants in which a top to a coffee lid came off in between Liebeck’s legs causing severe burn injuries with resulted in skin grafting. The turnout for this case was Liebeck was awarded $2.86 million. Gipson is alleging that McDonald’s drive-through employees delivered tea and other hot liquid substances in a negligent matter.

Unlike the case the in 1994, McDonald’s is most likely opting to not take the case to court and settle. The turnout for the 1994 case ended in the jury calling for McDonald’s to pay punitive damages. Knowing that they have faced a few court cases already this year, and that they will probably lose this case again, they feel the best choice for them is to just settle with Gipson’s terms. Although the case is still not fully resolved, it is safe to say that McDonald’s is going to lose. Similar to the 1994 case, this is a case that might seem a little obscure but, Lynn Gipson exerted all of her options, taking into account all actions by both parties, and taking the educated step to ensure she was given justice.

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

Posted by Ryan Neligan.

Human beings have a natural tendency to expand upon whatever the present is. In America, pilgrims settled in the state of Massachusetts and eventually expanded all the way to California. This trend of expanding continues today, as now people look forward to what is beyond Earth: Outer Space. This week Congress has passed a bill called the Space Act of 2015, which will help the small business of asteroid mining become an official operation.

The resources that are in outer space could be quite valuable to our world for the future. There are so many things untouched out there and in such great supply. In the past, “the prospect of large scale extraction of minerals from other planets or cosmic bodies has been both technologically and legally questionable, with starry-eyed entrepreneurs hard at work on the first part, but without much guidance on the second” (Good Magazine). Our civilization has not had the knowledge or technology in order to make obtaining a vast amount of resources from outer space an appropriate business. That has changed in current day though, as technology has made leaps forward in progress of this venture, and now to is officially about to become legitimate. With the passing of the Act, the business of space mining could boom into a full blown industry in the market, for “this lays the legal groundwork for private businesses to own extra-planetary resources, as well as sell their goods back on Earth” (Good Magazine). Huge potential is seen for space mining. Businesses are waiting for the new act to become official so they can jump into the extraterrestrial world of space mining and make as profit off of it.

The Space Act of 2015 is not yet complete to be used, but it is laying the foundation to open up endless possibilities that reach far beyond he extant of this world. Humans continue to expand the horizons that are in front of them, and this act would put them in the galaxies.

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

Posted by Ryan Neligan.

Earlier in the month, the state of New York banned the use of Fanduel and Draftkings, both websites in which people use to bet on daily fantasy sports. These websites are run daily in which people place down money and compete against each other in order to see who the best judge of sports is, and the winner acquires a large sum of money from those people who took place in the game. Games like this take place all over the world through these websites and have instantly gained a great amount of popularity.

The attention it is getting from the population has caused some heads to turn, such as the state government of New York. It has seen these websites as illegal gambling taking place within the state, and New York’s attorney general is set on shutting down this business. FanDuel and DraftKings are not going down without a fight though, as “the two biggest daily fantasy sports sites are taking on Eric Schneiderman in court, accusing him in lawsuits of bullying and abusing his powers in ordering that they stop operations in New York and are seeking a judge’s order to let them keep operating” (BloombergBusiness). To lose the participation of New York would be a huge blow for these two businesses, because New York accounts for “more than $1 billion each and have drawn investors across the sports, media and venture-capital industries. The state accounts for 5 percent of FanDuel’s customers and more than 7 percent for DraftKings, according to the companies’ filings” (BloombergBusienss).

Fanduel and DraftKings are taking action and are filing suit against this banning, for they do not see their business as an illegal online gambling site. They see it as a game of skill and knowledge in sports. Fanduel stated in its complaint about the case that “Such a shutdown would deprive hundreds of thousands of subscribing New Yorkers of the opportunity to pit their skills against the skills of others in selecting a ‘fantasy’ team of athletes from different sports teams and competing in contests offering prizes to the players whose fantasy teams perform best” (BloombergBusiness).

The case can be made for both sides of the argument. These websites are definitely a test of skill in the area of sports just like when people play regular Fantasy games, but it can also be seen as a website used for gambling and requiring money online, which is illegal in the state of New York. If these website continuing operating, the attorney general will take action and put chargers against these companies. The people of New York will be watching this case closely to see what the final outcome is, but for now daily fantasy sports has been banned from the state.

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

Posted by Trisha Daraji.

After the recent recalls in Ford pick-ups for braking issues in May, Ford Motors is back in the limelight for similar issues. In the previous recalls, the malfunctions in the vehicles occurred from an internal leak that caused the cars to lose braking function and have a loss of brake pressure. Last May, there were 225,000 models affected with the problem which all had the 2.5 EcoBoost engine (Valdes- Dapena, CNN Money). The cars involved in the new recalls are the same models that have the same engine, and have the similar problem of break failures.  Ford Motor Vehicles is now under investigation for the break failures reported by 25 owners. The malfunctions that occurred in May involved Ford’s 2013 and 2014 F-150 pick-up truck models, and similar malfunctions were reported in the 2015 and 2016 models. Not only are the models some of Fords most popular vehicles, but they are also the top selling vehicles in the U.S. The federal auto safety regulations agency has launched the investigation, and the National Highway Traffic Safety Administration is now considering expanding the recall launched in May to include the new model years.

Aside from the emerging braking problems in Ford’s most popular and best-selling vehicles, the company is under another investigation for safety issues concerning door-latch warning signs and steering issues. “The U.S. National Highway Traffic Safety Administration said today it was opening a probe into 380,000 2011-2013 Ford Edge SUVs after receiving 1,560 reports of ‘door ajar’ lights” (Shepardson, Automotive News). Owners reported that doors would not properly close and would swing open while the vehicle is moving. One injury has been reported, but there have been no reports of crashes. The recall for door latches has been expanded from 1.5 million vehicles to 2.4 million. A separate investigation was opened for the steering problems found in 262,000 2010 Ford Fusion cars. The failures in the system caused 12 crashes and four injuries (Shepardson, Automatic News).

From the recent recalls, it is estimated that 642,000 cars could be affected. Not only has this become a growing safety issue for Ford car owners, but it has also taken a huge toll on the company’s profit and reputation. The door-latch issues have resulted in six different recalls of 4 million cars since the year 2014. The new recall has been expanded and include Ford C-Max & Ford Escape (2013-2015), Ford Focus (2012-2015), Ford Mustang & Lincoln MKC (2015), and Ford Transit Connect vans (2014-16). The recalls have cost the company to cut its pre-tax profit from $10.8 billion to $10.2 billion due to the $640 million charges from recalls (Shepardson, Automatic News).

Trisha is an accounting student at the Feliciano School of Business, Montclair State University, Class of 2019.
Works Cited:

http://www.autonews.com/article/20161003/OEM11/161009993/ford-vehicles-being-probed-by-u.s.-over-door-latch-lights-steering

http://money.cnn.com/2016/10/04/autos/ford-f-150-brake-investigation/

Posted by Majd Abusadah.

Even though that companies usually have their own accountants who observe accounting transactions, there are still chances for fraud, and this can cause and increasing need for forensic accountants. As a result, universities started to provide courses in forensic accounting for people who are interested in a job as a forensic accountant, such as Florida National University (FNU).

While traditional accounting discusses the financial information and how to provide this information for different users, such as investors and mangers, forensic accounting is used to investigate and analyze financial information for determining if there are any illegal transactions that may have occurred. The forensic accountant’s role is to search and investigate an extensive domain of various crimes. For example, the crimes could involve company health care fraud, money laundering, and contract disagreements. Also, the forensic accountant might be required to be experts witnesses during a trial. Forensic accountants might use their skills in personal matters, such as: dissolution of a marriage where they have to study the financial positions for both parties and their spending for better settlement.

The discipline is starting to notice many needs that go beyond accounting and finances. According to FNU, “the need for skill sets more accustomed with the legal process and computer technology are highly sought after and play a crucial role in determining the outcome of courtroom events.” Forensic accounting affected by few factors such as appearing of a new generation of business professionals and hopeful entrepreneurs. There are around 500,000 new businesses each year and some of them use technology for their transactions. In fact, this extended the forensic accountant’s role to the digital world. Even though technology has a strong protection system, there is still a chance of risk, so it is important for forensic accountant to update their skills in this area.

Having traditional accountants is not enough for companies who want to protect their financial health. This is because their role does not include anything about how to investigate the financial information, hence, the need for forensic accountants.

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

Reference:

(2015, May 05). The Growing Importance of Forensic Accounting. Retrieved from http://www.fnu.edu/growing-importance-forensic-accounting/

Posted by Cynthia Mihalenko.

JBS’s plan to list shares on the New York Stock Exchange are uncertain now due to their legal issues. The company, located in Brazil, is the world’s largest meatpacker. Plans for a global reorganization were in place to try and boost their company’s value. JBS is already in the U.S. market, as they own Pilgrim’s Pride and Swift & Company. The new company they would reorganize into would be called JBS Foods International and would be based in Ireland.

Current developments have both JBS’s Chief Executive Wesley Batista and his brother, Chairman Joesley Batista, suspended from managing their companies until the investigation is over. JBS has not announced a new replacement and this has also fueled speculation that JBS’s plans for global reorganization are on hold. Company spokespeople have denied they are changing their plans and also denying any wrongdoing by the Batistas. One investigation is the overbilling in government contracts where some funds were paid as bribes to politicians. Another investigation is whether the company received favorable treatment from Brazil’s National Economic Development Bank. Analysts at some of Brazil’s banks have expressed concern that the legal problem could delay the reorganization as Guilherme Figueiredo, a fund manager at Sao Paulo base investment firm M. Safra states that “Our feeling is that the new (corruption probe) will at least delay the NYSE listing.”

Investors are rightfully fearful of JBS, now that it is under this investigation. No one wants to invest in a company if their CEO cannot be trusted. However, the Wall Street Journal interviewed several analysts and they knew of a large pool of talent that the company could tap into if they needed someone to take over should Wesley Batista step down. This should help alleviate some of the investor’s concerns.

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

Posted by Mariafernanda Ayin.

Best Buy is considered one of the biggest electronic selling corporations, but not even the biggest companies can avoid problems. Best Buy has been selling products like TVs, computers, and appliances such as washing machines that have had recalls.  These recalls have been one of the biggest headlines in the past couple of months in the electronics industry.

Federal Law states that it is illegal to sell and distribute products to consumers that have been publicly recalled. Best Buy, allegedly knowing that they were selling recalled products, told the U.S. Consumer Product Safety Commission that they had created measures to stop the risk of selling recalled products, however they continue to do so. Therefore, U.S. Consumer Product Safety Commission decided to penalize Best Buy because the company was not able to effectively create procedures to be able to identify, separate, and avoid selling recall products. In addition, Best Buy failed to block the product code which caused them to get erroneous information that indicated that the recall product was not in inventory.

Best Buy is being blamed for selling over 16 different products and a total of 600 recall items from September 2010 through October 2015—400 of the items being Canon cameras. Some of the items sold had a risk of skin irritation, and even catching on fire, which could have caused enormous harm to the customers. Best Buy is a company that has shown a clear lack of ethics by knowingly selling and distributing recall products just to make a profit, not caring about the well-being of their customers. This unethical act caused Best Buy to settle and pay $3.8 million of civil penalty in thirty days and in addition the company needed to create a compliance program to show that they are strictly following the laws and regulations of the Consumer Product Safety Act.

After the settlement was made, Best Buy sent a spokesperson to publicly address the situation, making an announcement after the settlement, “we regret that any products within the scope of a recall were not removed entirely from our shelves and online channels. While the number of items accidentally sold was small, even one was too many. We have taken steps, in cooperation with the CPSC, to help prevent these issues from recurring.” (Kieler).

This whole dilemma that Best Buy has been through has put them in the eye of the public, and could of possibly affected their sales. However, they still remain one of the biggest companies in the electronic business, and most likely will surpass this situation.

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

Posted by Radhika Kapadia.

The real cost of bribery is a question that often lacks a definitive answer.  It seems that Och-Ziff Capital Management, a hedge fund headquartered in New York City, is learning a hard lesson for allegedly engaging in bribery in Africa.  The firm is set to pay a hefty price of $412 million dollars, but the SEC has added the implicit cost of hindering fundraising by insisting that the firm clear any potential deals with investors with state regulators, adding considerably lengthy minutes and cumbersome dollars to the fundraising process.

Because of the massive bribery allegations, the firm was unable to obtain a waiver for the penalties corporations subject to civil law enforcement sanctions or criminal charges, such as bribery, typically face.   As a result, the company will be faced with the tremendous cost of an increased fundraising process and the more-than-ever watchful eye of the SEC over future investment transactions.   In the burgeoning era of bribery cases, the question of whether dollar penalties are truly enough to deter corporations from engaging in illegal acts is often difficult to assess.  However, the SEC is beginning to believe that financial consequences, coupled with other implicit penalization costs will truly begin to reduce bribery within the corporate world.

The allegations against Och-Ziff are primarily as a result of their dealings with Dan Gertler, an Israeli diamond-trade millionaire.  According to the Wall Street Journal, Gertler was known to use political connections in Africa to defeat competitors.  The Wall Street Journal noted that approximately “$250 million of Och-Ziff dollars were used to bribe the current president of the Democratic Republic of Congo in exchange for diamond mining rights.”  Despite blatant warnings and advisement from their lawyers, Och-Ziff executives, such as chief executive Daniel Och, chose to deliberately ignore corruption allegations against Gertler. Subsequently, the African subsidiary of Och-Ziff pleaded guilty to conspiracy to commit bribery, resulting in one of the largest settlements under the Foreign Corrupt Practices Act.   It seems that Och-Ziff is slowly learning that the true cost of bribery is pervasive, and that ignorance truly is not bliss.

Radhika is a graduate student with a concentration in Forensic Accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Posted by Ashley Torres.

In July of 2012, Marissa Mayer became both the President and Chief Executive Officer of Yahoo!. During her time within the company, she has found herself involved in many lawsuits, and is yet hit with another. Recently, in the San Jose District, a former media executive known as Scott Ard filed the lawsuit against Mayer. He is accusing her of running a campaign that discriminates against male employees, specifically. His reason behind this alleged accusation includes Mayer’s implemented “use of the employee performance rating system to accommodate management’s subjective biases and personal opinions, to the detriment of Yahoo’s male employees.” Mayar states the employee performance rate system has improved their overall performance, but Ard believes he was fired not because of his performance, but because of his gender.

Besides just accusing Mayer, Kathy Savitt, former chief marketing office, and Megan Liberman, editor in chief, are also involved in the lawsuit for discriminating against men. As evidence of this accusation, the lawsuit alleges that 14 of the 16 senior-level editorial employees were female whom were purposely hired by Savitt, while firing men because of their gender.

In February of 2016, there was another filed lawsuit with similar accusations. A former employee by the name of Gregory Anderson was fired, while he attended a fellowship at the University of Michigan. Anderson too believed that he was fired because of his gender and not his performance because when he asked to view his documentations with his performance that supposedly resulted in his termination, Anderson was denied. Both Anderson and Ard are represented by the same attorney, Jon Parsons, in which he declined in making any comments.

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

Posted by Kirsten T. Rewekant.

A somewhat recent case, Ellis Vs. Cartoon Network, Inc. shows how old statutes can be in conflict with the new and always updating technology. Ellis uses the Cartoon Network app on his android device to watch popular television shows that Cartoon Network airs. This is a free service, which you could choose to upgrade to pay for exclusive content that the free app does not allow others to see. When signing up for this extended service, you would create a profile with personal information that Cartoon Network would be available to see. Ellis had decided the free version was good enough for him, and therefore, did not give Cartoon Network permission to obtain any personal information.

Cartoon Network uses a service called Bango, which allows them to assign an ID number to everyone who views their content, free service or extended. This service does not know exactly who you are with any personal information, but is essentially learning who you are by linking all the shows you watch to your ID number, and therefore, learning what you like to watch. Through the service, the company is getting an understanding of who you are. Ellis tried to argue this to the court.

The court heard arguments as to whom is considered a consumer or producer. Cartoon Network argued Ellis is not considered a consumer under the definition of the Video Privacy Protection Act (VPPA) because he does not provide any “personal identifiable information.” But Ellis argued, this ID number does show a side of his personality and gives the company his personal information. Finally, the court needed to decide whether Ellis can be considered a subscriber to Cartoon Network, which makes him a consumer under the VPPA. To be a consumer under the VPPA, you do not have to pay for a service, log in, or create a profile.

Overall, the court ruled Ellis as not a subscriber under the VPPA for not signing up for an account, providing no personal information, having no profile, not paying for the service, and he is not considered to have a committed relationship with Cartoon Network to obtain the exclusive content they offer.

Some issues with this ruling includes the fact that if you were to visit Cartoon Network on your web browser, you would not be assigned an ID number, as the app does. Another issue with this case is the very little distinction between downloading the app and being a subscriber to Cartoon Network and how these two do not show a difference in commitment. After this case, there are still questions regarding the VPPA regarding privacy, and therefore, there may need to be some revising.

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

Posted by Sara Firnstein.

Everybody knows that General Motors, or “GM,” has had its fair share of issues throughout the years. Many recalls have been raised based on multiple different issues. In 2014, GM came out and recalled over 3.4 million cars because of an ignition switch issue on top of the already 2.6 million small cars they recalled four months earlier to fix the same issue. GM said that they needed to change the keys to these cars. The major issue that prompted this recall is that the switch could rotate out of “run” if the key has excess weight on it. This could lead to the car shutting off the engine and then the power steering with become disabled, leaving the driver without any control. This recall had an effect on cars ranging from 2000 to 2014.

The most surprising facts about this recall is that after the first recall of 2.6 million small cars, GM has only repaired seven percent of the vehicles. This leaves ninety-three percent of the recalled cars not fixed yet, and another 3.4 million cars just recalled, which obviously haven’t been fixed yet either. Also, the effect of the first recall has caused a minimum of 54 crashes and 13 deaths, but lawyers who are suing GM say that there have been at least 60 deaths. The deaths from this issue are the most surprising, but also “GM has acknowledged knowing about the problem for more than a decade, yet the cars weren’t recalled until this year” (CBS News, 2014).

An issue that arose from these ignition switch recalls are the massive amount of lawsuits filed against GM. This has led to many different court cases and GM has tried to avoid lawsuits that deal with cars that were made by the old, pre-bankruptcy GM.  Recently in July, the “U.S. Second Circuit Court of Appeals overturned a bankruptcy judge’s ruling this week that had protected GM from those lawsuits because of the company’s 2009 bankruptcy restructuring” (Bomey, 2016). Because of this ruling, it may expose the new GM to liabilities for a defect that killed a minimum of 124 people and injured over 275 more in the small cars that were made by the old GM before bankruptcy. This ruling gives life to hundreds of cases where the victims decided to take their chances in court and refused to settle. Attorney Robert Hilliard says that he is happy for his clients because for years “the victims of the GM ignition switch have had their claims languishing in bankruptcy court and now these folks will have their day in court” (Bomey, 2016). These victims aren’t going to back down and GM has to continue to deal with the old GM car lawsuits along with the new GM car ignition switch lawsuits. GM is not out of the clear just yet, as they have to deal with these lawsuits that can now proceed based off of the court’s most recent ruling.

Sara is a criminal justice major with a minor in legal studies at the College of Arts and Sciences and the Stillman School of Business, Seton Hall University, Class of 2019.

Works Cited:

GM recalls 3.4 million more cars for ignition defect. (2014, June 16). Retrieved September 26, 2016, from http://www.cbsnews.com/news/gm-recalls-3-16-million-cars-for-ignition-problems/.

Bomey, N. (2016, July 14). Court: Ignition-switch lawsuits against GM can proceed. Retrieved September 26, 2016, from http://www.usatoday.com/story/money/cars/2016/07/13/general-motors-bankruptcy-ignition-switch-lawsuit/87029916/.

Posted by Gabriella Campen.

Unfortunately, in this day and age being well-known in Wall Street circles also happens to be synonymous with being well known by the SEC. The SEC has recently charged hedge fund manager Leon Cooperman, 73, of insider trading by using his easy access to executives to gather information, which he used to buy securities from a company called Atlas Pipeline Partners.  Cooperman’s information led him to buy more securities in the firm, right before the stock’s value soared over 30% due to the company’s $682 million dollar sale of a natural gas processing facility.

After the suspicious buy, the SEC filed a federal lawsuit in Philadelphia, and accused Cooperman of abusing his access to executive information, “By doing so, he allegedly undermined the public confidence in the securities markets and took advantage of other investors who did not have this information,” said SEC Enforcement director Andrew Ceresney.  Along with barring Cooperman from any positions as a director or officer in the future, the SEC is seeking restitution of profits as well as money penalties from Cooperman and his firm, Omega Advisors.

However, Cooperman’s attorneys, Ted Wells and Dan Kramer have released a statement claiming that these allegations are “entirely baseless” and that “Mr. Cooperman acted appropriately at all times and did nothing wrong. We intend to vigorously defend against the charges and will not allow the SEC to tarnish the legacy Mr. Cooperman has built over the course of a legendary career spanning five decades.”  Cooperman is firing back and defending his career and reputation, to which the SEC is saying that they “will continue to pursue relentlessly those who engage in insider trading, regardless of their status or resources.”  This comes as a lesson that no matter who you are or how much power you have on Wall Street, you are still not exempt from following the law.

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

Posted by Ivanna Klics.

There has been quite a ruckus at Wells Fargo as they made headlines for causing fraudulent transactions that have not been authorized by the customers themselves. Wells Fargo is being accused for creating banking and credit card accounts without the permission of its customers. Who are the customers more to blame then the CEO, John Stumpf; however, in his defense, he is not capable of overlooking every branch in the bank. Stumpf’s leaders have not only stepped out of their comfort in the company but the reputation of the company, as well as opening up the door to a criminal investigation case.

The investigation has put the company to shame. Stumpf appears to be clueless of what has been going on literally right under his nose. Because it is almost impossible for these events to occur overnight, management should have known about it for a long time. Whether Stumpf admits it or not, Charles Gasparino stated “he and the bank will still face numerous civil and criminal inquiries for years to come.”

Although the company does not mean all harm, Wells Fargo is still one of the most profitable banks worldwide; however the company’s perception has had a dramatic change. Currently the company is facing a congressional investigation, and who knows if they will be able to build back their reputation.

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

Posted by Matthew Cassidy.

In 1988 the Video Privacy Protection Act was passed by Congress to prevent private information about tape rentals or sales records from being released to the public. The case involves a man named Mark Ellis who downloaded the Cartoon Network Application on his Android smartphone in order to watch shows on that network.

The app is able to track viewer history and an Android phone I.D.; it then sends the information to an analytics company named Bango. Bango is a very advanced organization that can not only monitor customer behavior, but also link user’s information about the user through the Android I.D.

Cartoon Network’s third party partner, Bango, violated the Video Privacy Protection App by gathering personal identification from the Android user’s I.D.  The court weighed its opinions on another case called Re Hulu Privacy Legislation that involved the Privacy Protection Act. This case helped Cartoon Network by providing the true definition of a subscriber to just visiting a website. Therefore, Ellis was not “committed” to the application, so therefore the Privacy Protection Act did not apply to him.

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

Posted by Matt Gilbert.

PepsiCo is beginning to take its health push seriously, stating last month that it plans to reduce the amount of sugar, salt and fat in its products by the year 2025. The company’s newest aspiration comes as a response to growing world obesity and its striving to be in better accordance with global health standards. It also comes in light of recent discoveries that Pepsi’s juice brand, Naked, was mislabeled to say that it included less sugar than it actually does. This was a massive roadblock in Pepsi’s success as it was marketing Naked juices as a healthy, low-sugar alternative, when in actuality it had extremely high levels of sugar.

This misinformation opens a larger can of worms as to the duty of companies to warn its customers of the dangers of its products and where the line of general knowledge and the withholding of information. Essentially where does the fault go from the customer to the company? This is not a straight forward issue by any means and both sides could be argued. If the business at fault knew the true information and knowingly withheld it from the customer, then that becomes a major issue.

It also brings up an interesting and complex discussion as to if Pepsi should be obligated to improve the overall health of their products. The general public knows and acknowledges the fact that soda as a whole is not good for one’s health, so is it really Pepsi’s obligation to attempt to make it healthier when the nature of the product is to be unhealthy? What it really comes down to is where the legal responsibility of the company ends and where its moral obligation to the well-being of its customers begins. The law places baseline guidelines on the standards that need to be achieved, but in many cases that simply isn’t enough. For example, Samsung began testing their batteries internally after the debacle with their batteries even though the law doesn’t require them to go to such lengths.

Pepsi’s commitment to reduce the amount of sugar in their drinks comes at a time when the social norm is with low-calorie healthy alternatives. That being said, the legality of the situation comes into play with whether or not Pepsi needs to make such a change and where the line between customer knowledge and company deception is drawn.

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

Posted by Charles Matta.

UPS (or United Parcel Service) is known worldwide as the world’s largest package delivery company and provider of supply chain management solutions. There is no questioning the success that this company has had, but is there a question of their morality? Recently, UPS was supposed to be looking for clues and observing its trucks thoroughly for illegal transportation of products. It was found that UPS had been illegally transporting untaxed cigarettes from Indian reservations to customers throughout the state of New York. And while they were supposedly “observing the trucks” it was in fact believed that they had “turned a blind eye” and now the tax regulators of the state of New York are asking for the judge to impose an 873 million dollar penalty.

An eight day federal civil trial occurred with closings statements regarding the issue saying that UPS “had a corporate culture that favored sales opportunities over a responsibility to help New York enforce tax law.” The article states that this happened because: “Tobacco retailers located on upstate reservations were given price discounts for shipping in volume. Delivery drivers were allowed to accept iPads and other gifts from shippers. Account executives, whose compensation was tied to keeping big accounts, ignored signs that some customers signing delivery contracts dealt in cigarettes.” The lawyers of New York City and New York State are saying that UPS must be held accountable for what they determine to be about a decade’s worth of misconduct.

On the other hand, UPS has argued that it did follow the rules and restrictions applied to the company, but they can only do so much about policing its 1.6 million daily shippers are sending in sealed packages. In its legal filings, its lawyers said the city and state have offered no proof it “knew or consciously avoided knowing that any shipper was shipping cigarettes.” Now, UPS has terminated contracts with shippers who were known to be violating these packaging rules. “The state and city impose some of the highest taxes on cigarettes in the country in an effort to halt tobacco use,” and because of this, there are 28,000 deaths annually which causes tax payers 10.4 billion in health care related costs. One account executive writes “’I wish UPS would just take the high road, and say NO TOBACCO, NO ACHOHOL (sic), PERIOD.” UPS needs to be more strict on what is or isn’t successful and must find a way to monitor their business operations better.

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

Posted by Michael Ragone.

Recently, McDonalds workers have opened up explaining in detail, sexual harassment incidents that they have experienced while at work. Until last year, under the law, McDonald’s could not be held accountable for labor violations in franchise owned stores. With that being said, McDonalds still ignored all serious instances. Most of the incidents, had to deal with employees being touched, grabbed and slapped, which of course is a clear violation of any moral values. In a video that was shared most of the statements were, “Grabbed my waist, tried to kiss me, touched my breast, grabbed my leg.” “Grab, touch, rubbing up, no, this is not okay.” Some workers were even shown pornographic images from their supervisors. Where in one case, a women’s boss offered her one thousand dollars in exchange for oral sex. This sparked an activist group, “Fight for 15” because of the 15 different claims.

In a recent study, “two in five women working in fast food reported experiencing some sort of sexual harassment ” which is an extremely high percentage. Men and women should be able to work in a safe environment with rules and codes of conduct. In a statement, McDonalds tried to distant themselves from their franchises trying to make them look independent. Fight for 15 is planning protests nationwide over McDonald’s handling of sexual harassment. When women employees went to speak up and report the incidents they were punished with their hours and pay being cut. One of the managers said, “You shouldn’t have flirted with him.” Not in any way is it the employees fault and they shouldn’t have to work in hostile working environments. When you have to live pay check to pay check and barely make enough to get by, speaking up means putting your job at risk.

If McDonalds ignores these harassment claims, their long term reputation and profit maximization will deteriorate. In order to make the work environment safer, there should be people who employees can report problems to right away. The employees affected by this harassment “aren’t seeking monetary damages” and only seek for “McDonald’s to enforce its publicly stated no-tolerance policy for sexual harassment.” This would of course mean that anyone who was proven to be harassing employees in any way would no longer be able to continue employment. When natural law is considered, these workers should all have equal rights to earn a living without worrying about a possible threat to them. This problem is even worse for “immigrant workers” says the Fight for 15 because they are not fully aware of their rights and thus leaving them more vulnerable for exploitation. It is also common that women did not want to speak out in fear of losing their jobs, and of course this would mean not being able to support themselves and possible loved ones. By re-enacting the zero tolerance policy, women will be able to go to work feeling like they are equal to everyone because harassment rates will plummet.

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

Posted by Zachary Lucanie.

Historically, presidential elections have brought Americans to their feet as they stand behind their candidate to hold the highest position in American politics. Given that the president is elected once every four years it is important to many Americans that the office is held by the candidate that will solve the issues most prevalent to them. One of the great privileges that an American has is the Constitutional right to vote, with the Fifteenth Amendment ensuring that every vote counts no matter what ones race or skin color. With that, there are still many Americans that pay no mind to elections and abstain from voting. The circumstances have changed, however, in the current presidential election between Republican nominee, Donald Trump, and Democratic nominee, Hillary Clinton. Many feel that this election has broader implications for the country and that the electing of the wrong candidate could leave the country in turmoil. Along with protesting and campaigning on behalf of their candidate, Americans feel the best way to stop the candidate that they disagree with is to get out and vote. This has brought many voters, some who have never voted before, out to the polling booths which was seen in the primaries. Now, as we close in on Election Day and as voters begin preparing to elect their candidate, many individuals are beginning to question the legitimacy of the voting process. Although this is occurring in states all over the country, there are disputes occurring in swing states especially due in part to the potential weight that their vote could hold. Whether the claims hold legitimacy is not clear cut and many have turned to the law to rectify the issues they see in the voting process.

One state that is experiencing legal trouble is Texas, where voting-rights advocates have pointed out to state officials that “several counties opened the state’s early voting period October 24^th with incorrect signs indicating that voters must show photo identification to cast a ballot” (Kendall). This was a problem to many given that earlier in August a court had determined that there would be exceptions made for people that had sufficient reasoning for not obtaining a form of government issued identification. The signs that were mistaken put out at these polling sites meant that there would be some residents who wouldn’t be able to cast their ballot. Many polling sites claimed this to be an oversight and that the placement of the signs were not intentional. With that said it is still unlawful and since shedding light on the issue the signs have been fixed.

Another state that has seen questions of voting rights was Ohio. State Democrats and a pair of homeless advocacy groups appealed to the Supreme Court in an effort to stop state requirements which they believe could lead to absentee and provisional ballots being rejected if voters make mistakes on the forms. If this problem goes unaddressed it is predicted that thousands of Ohio ballots will be disallowed. “Justice Elena Kagan has asked the state to submit a legal response by Monday” (Kendall). Secretary of State Jon Husted disagreed with the Democrats initiative saying that allowing these ballots to count would be “injecting chaos” (Husted) into the election. Husted stated that “Election officials need a way to confirm that a person is a qualified, eligible voter before counting a ballot”.

“Arizona Democrats are awaiting an appeals-court ruling on their challenge to a GOP state law that makes it a crime for get-out-the-vote operatives to collect and deliver absentee ballots filled out by voters” (Kendall). Democrats fear that if residents are unable to go out and vote that their votes will not be counted. They are also concerned that a large burden will be placed on neighbors, activists and campaigners who will have to go out and collect ballots for those that cannot get out and vote. A trial judge ruled in favor of the state, the reason being that Arizona has been known to have cases of legitimate voter fraud and ballot tampering.

Being a swing state, Pennsylvania is placed under the microscope when it comes to voting and voter legitimacy. Most recently “A Pennsylvania federal judge will consider a GOP challenge to state rules that say residents are eligible to monitor elections only in the counties in which they reside” (Kendall). Due to the power that Pennsylvania has in the deciding of an election, many Republicans feel that it would be wise to place poll watchers in heavily Democratic urban areas to make sure that elections are conducted fairly. Some people, including Democratic Secretary of the Commonwealth, Pedro Cortes feels that the Republicans could “compromise the fundamental rights of voters actually trying to cast peaceful votes.”

As the election begins to narrow down there is widespread implications of voter fraud and voter rights violations across the country. It is up to courts and lawmakers to ensure that every single American has the right to vote for who they want, it is a fundamental right that this country was founded on.

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

Posted by Nick Mitwasi.

Throughout the years, there has been numerous lawsuits towards Johnson & Johnson for their use of talcum power in their products, specifically baby powder, for women have been suing the company on claims that it is the link to their ovarian cancer. In this year alone, the company was forced to give up $55 million in May to a woman in St. Louis, Missouri and $72 million to another family also in St. Louis. In addition, just a couple of days ago, a woman was awarded $70 million in California against Johnson & Johnson. Yet, in all of these cases J&J has continued to defend that their product is completely safe.

Johnson & Johnson’s Baby Powder has dominated the market in the past, and thus is the main reason as to why it is going to defend its products in the mist of all these lawsuits they are being slammed with. In the first case in which Johnson & Johnson was involved, they were sued by Diane Berg for gross negligence and fraud; she was a frequent user of the product and never was informed that long term use of the product can cause cancer. After she sued, the company offered an “out of court settlement of $1.3 million” (Huffington Post); however, she declined and simply wanted to inform the public through her suing the company that this is something people must be informed about.

The main problem, though, with all these lawsuits is that there is no scientific evidence that the product does indeed cause cancer; it is the fact that Johnson & Johnson are not informing their customers that there is a possibility that their product will do harm. This has been damaging the company’s reputation as more and more lawsuits are being filed to different law firms about the same situation. This is still an ongoing situation and time will only tell to see how Johnson & Johnson reacts to the overflow of negativity towards one of their mainstay products.

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

Sources:

http://www.dailymail.co.uk/news/article-3882192/Cancer-patient-contracted-disease-using-Johnson-Johnson-talcum-powder-wins-70million-payout-company.html

http://www.huffingtonpost.com/toby-nwazor/the-talcum-powder-lawsuit_1_b_10609474.html

http://www.bloomberg.com/features/2016-baby-powder-cancer-lawsuits/

Posted by Joe Casey.

In the business world the line to remain ethical and make profit is thin. In the recent months Samsung has toed the line with the ethical standards of business due to their latest smartphone repeatedly catching fire all throughout the world. Samsung acting as swiftly as possible called for a quick recall of 2.5 million units of this phone however, the recall has gone anything but quick.

While Samsung seemed to be gaining ground on Apple in the smartphone business, they have produced their newest phone the Samsung Galaxy Note 7; the issue that has risen is that these phones are beyond unsafe and yet people still seem to be using them even after the initial recall. Due to the recall, Samsung has seemingly alleviated the possibility to be liable for any lawsuits that will come after the recall has been issued but the harm that was done prior to the recall has in estimate, “further dented Samsung’s reputation and shaved as much as $14 billion off its market value” (Times).  One of the many issues that face Samsung is that it seems they have wavered from government recall protocol and instead are trying to “save face” by venturing out on their own and advertising to bring the devices back for a change of battery when the issue is much more complex. The first recall while slow had seemed to stop the issue of their exploding phone as soon as October 1st.

Five days had passed since the recall seemed to fully become effective, until October 6^th when the first report of a replacement phone being defective hits the news. This stream picks back up and again Samsung is forced to stop producing the phone all together making it the largest smart phone recall to date. Finally, on October 11^th “Samsung announces it is stopping all sales of the phone while it investigates the problems.”(BBC). While Samsung at first was able to stay ethical, they decided to find an immediate solution due to the money they would lose and are now dealing with a larger problem all together.

This hit is only the beginning in the repercussions after this will be seen further in the court system yet their ethical standing to act as quickly as possible even though it went against the governments wishes on how to handle the recall was best for their business. Instead of staying unethical and ignoring the problem they chose to deal with it head on.

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

Sources:

http://www.bbc.com/news/technology-37615496

Posted Layla Alzahrani.

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

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

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

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

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

Source:

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

Posted by Victoria Gencarelli.

Product liability is a prevailing issue and concern for companies and businesses who are marketing and selling their products. It is a company’s duty to take the liability for manufacturing and selling a product that is defective or damaged. By creating and issuing a defective product to the public, it increases the risk for dangers, damages, or harmful occurrences to take place with the use of the product. If in the case that a product is defective and capable of any danger, it is the company’s responsibility to issue a warning or a recall on the product. In this way they can they attempt to protect themselves from any legal issues and also protect the general public from encountering danger while using their products.

POM Wonderful is a company who produces fruit juices and fruit extracts, but is most commonly known for the produce of pomegranate juice. The Coca-Cola Company introduced a new “pomegranate blueberry” juice product, but POM wonderful believed the product to be false advertising to consumers. The juice was actually a blend together of apple and grape juices and only consisted of 0.2% pomegranate juice in it and also included the phrase “from concentrate with added ingredients and other flavors” in small typing. POM Wonderful presented this to the court in compliance with the Lanham Act because they believed that the name of the juice and the false advertising of the Coca-Cola Company’s “pomegranate blueberry” juice was misleading and contributing to a loss of sales for POM Wonderful.

In California federal district court, they deliberated the case and had not found POM successful in proving that the Coca-Cola Company was misleading their consumers into thinking that their “Enhanced Pomegranate Blueberry Flavored 100% Juice Blend” did not actually contain a high percentage of pomegranate juice. When the case reached the highest court, they disregarded POM Wonderful’s claim against the Coca-Cola Company and stating that Coca-Cola was not violating the FDA guidelines on product labeling. The POM Wonderful Company did lose out on millions of dollars in revenue and sales, but it was not seen as unfair competition and the jury ended the case in favor of the Coca-Cola Company. All in all, an issue such as this one has an overall impact on the food industry to be careful when labeling, marketing, and advertising their products to the public. It is always important to keep product liability in mind when generating products and selling them in order to avoid any potential problems in the long run.

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

Posted by Shalin Thomas.

The article that caught my attention and that I will be discussing is titled, “Companies Face Lawsuits Over Website Accessibility For Blind Users” by Sara Randazzo. Various world famous companies are being sued for not having accessibility on their websites for disabled users, specifically the blind. This means that website does not have a speaking feature which allows the customer to hear correctly what they are purchasing. Some of the companies that are facing these lawsuits include Toys “R” US, Burger King, and Anthropologie. Over 240 business like these are facing lawsuits and many of them are settling for between $10,000 and $75,000.  The American Disabilities Act constrains the prejudice against all persons with disabilities and this issue violates that precedent.

Although this is an issue because it takes away the opportunity for the disabled to lead regular lives with outside hassle, these lawsuits are said to only be “a legal-fee shakedown and don’t improve accessibility”, as quoted from the article. The lawyers that take on these cases are ones that are ones that are trying to find “the next great cause of action”. Juan Carlos Gil, a legal blind resident of Miami, has sued over 30 businesses because their websites are not accessible to the disable. In one instance, he ordered racing wheels for his wheelchair online, and it was the wrong item because the website dictated it wrong. He along with his lawyer just want to make sure that no one is excluded from being able to surf the web.

Carlson Lynch is a partner of the law firm that brings to court many of these lawsuits. He has been sending letters to several companies before looking toward solutions for these issues. These lawsuits are given to judges who, most of the time, send them to mediation which results in the settling of the issue in private. The companies have a period of time where they can resolve the issues brought upon them. These suits are said to extend to mobile device applications as well.

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

Source:

http://www.wsj.com/articles/companies-face-lawsuits-over-website-accessibility-for-blind-users-1478005201

Posted by Robert Santos.

Usually when people go on vacation, they come home with a souvenir of some sort such as a hat or refrigerator magnet. Lauren Guerra will be going home with a little more than a silly souvenir–in fact she will be going home with 3.5 million dollars. This will be a trip to remember for Guerra but not in the way one would want. Although Guerra will be going home a very rich woman, the damage that has been done is something that all the money in the world couldn’t fix.

On October 27, 2013, Lauren Guerra was one of the many passengers on the Star Line Tours of Hollywood bus giving a tour to passengers of Hollywood. These buses are popular and very well known for they give tours of the famous locations in California, and are known for the unique design of not having a roof but a open deck level for tourists to have a better view of sites and take better pictures. Unfortunately this would be Guerra’s biggest regret, for while aboard one of these buses, a tree branch flew into her face leaving her permanently disfigured. She immediately sued the company after hearing of another death on the same type of bus under the same company. In July 2014, and has been in a back and forth battle since then.

The court battle was vigorous and both sides seemed to have fair arguments. Mark Cunningham who is the attorney for the Starline Bus Company argued that Guerra was at fault because she was standing while the bus was in motion and also was drinking prior to being on the bus. Brian Kabateck, who is Guerra’s attorney, responded by admitting his client did indeed have a drink or two before entering the bus. But there was no way anyone could of avoided this injury, sober or not. Guerra’s attorney argued Star Line could have done more to prevent the situation such as having a worker on the second level of the bus, and also having individuals scout to see what type of environment the bus routes consisted of before actually allowing the buses on them. After a day-long discussion among jurors, the court finally awarded Guerra a settlement of 3.5 million dollars.

Something says that whether you weigh the negatives or the positives, Guerra will never forget this vacation.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Robert Santos.

It seems that multiple companies are beginning to merge in an attempt for one company to make a larger profit and the other company to remain alive. Some companies tend to merge in order to both strengthen their profits and publicity. In this specific case, these companies merged in order to create a better and more powerful drug that could be beneficial and a game changer for individuals who suffer from multiple sclerosis. Or so it seemed. Unfortunately for these French companies, there well planned venture did not go as planned.

In 2011, a giant French pharmaceutical company known as Sanofi acquired Genzyme, a small biotech company based in Cambridge, Massachusetts. Sanofi paid 20 billion dollars for the company, and although that seems a bit much for a small-time company, Genzyme was making strides to create a powerful and promising treatment to multiple sclerosis called Lemtrada. It seemed like a good deal that would not only benefit the two companies but the world as well.

Unfortunately things did not turn out for the best with this venture between the two companies. It turned out that Sanofi was developing their own treatment to multiple sclerosis. The drug is called Aubagio and would have been a competitor against Lemtrada. Sanofli was faced with a dilemma: they could have followed F.D.A regulations and worked to seek approval for Lemtrada, or finish working on Aubagio. The only catch would be that by focusing on Lemtrada, Sonafli would have to give additional payments to the Genzyme rights holders in the estimate of 3.8 billion dollars. Of course Sonafli choose the latter option and focused on their drug without the right holders of Genzyme knowing, and now a lawsuit has been issued.

A lawsuit was filed against Sonafli by Genzyme rights holders under the claim that Sonafli failed to fulfil its obligations under their deal. Because of this, the individuals who invested in Genzyme have not received the money owed to them in a sum of 708 million dollars. The lawsuit claims Sonafli may have taken it upon themselves to slow the approval of Lemtrada through the F.D.A in order to avoid having to pay the right holders of Genzyme, while the approval of Sonafli’s drug Aubagio was an easier process and did not have as much difficulty of being approved as Lemtrada did. It has already been noted by F.D.A officials that the time process for Lemtrada to be approved took longer than it should have, therefore, it already seems that Sofali is in the wrong.

Unfortunately, this is a case where the wellbeing of individuals is outweighed by the possibility of profit. If what Genzyme is claiming is true, we would have been witness to another company thinking about their pockets before the health of many. Considering the impact these drugs could have had on the lives of the somewhat 2.3 million people in the world who suffer from multiple sclerosis, it is a sad thing to see money interrupting the process of progress. Hopefully, we see some agreement and it happens as fast as possible so these companies can go back to focusing on what’s important, and that’s saving a life.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Deane Franco.

In a recent article posted in the Wall Street Journal, I read about General Motors being charged with punitive damages due to a defective part causing multiple deaths. General motors had been in the process of recalling millions of vehicles, when a defective ignition switch caused 100 or so deaths.

The punitive damages will be limited to the extent of a lawsuit based on claims and knowledge that GM had of a new company auto maker’s 2009 restructuring. GM attempted to prevent plaintiffs for bringing punitive damages based on personal injury or wrongful death. Unfortunately for GM, Robert Hilliard who is representing all those injured by GM feels that punitive damages “are the only way to properly compensate victims who have been harmed by defect.” This is because punitive damages are meant to be a large enough punishment to the corporation to send a notable message with the intent of assuring the corporation understands its wrong doing.

Although GM tried to fight the punitive damages, the plaintiffs won outright. What this means for GM is that punitive damages could reach millions or even billions of dollars awarded to those affected, depending on the ruling, previous defective GM part cases may also be included.

GM has already paid $935 million in damages and has also agreed to $625 million in compensation for the victims. But we will see if the court will stop there. Moreover, GM is being considered for additional charges because they had acknowledged that they mislead regulators about the defective car parts and still put them into production. The hairy part, however, comes in when GM addresses their bankruptcy filing, because technically, “Old GM” filed for bankruptcy and would be responsible for all these defective parts liabilities and, “New GM,” the product of the bankruptcy reorganization, is a new company separate from the actions of the old.

This article relates to the discussion post this week in class where we discussed the hot coffee spill in Liebeck vs. McDonalds. In that situation, punitive damages were used not necessarily as a fair compensation to the victim, but to ensure McDonald’s knew of its intentional wrong doing and would be more likely to halt such procedures.

The pricing of the punitive damages was said to be very important for Mr. Hillard because he knows that those damages tend to run very high and would lead to fair compensation for the victim’s losses. This is a little different from the Liebeck case, because in that case, there appeared to be dual responsibility as to   both the temperature and the spilling of coffee; in this GM case, all responsibility falls on the manufacturer for selling a defective car which caused death to numerous victims. It does not matter that GM has rebranded itself after going through bankruptcy filings.  At this point in time, there may be products on the market that have not been recalled, which caused injury and or death to numerous victims. For these reasons, the punitive damages should be high to balance out the victim’s loss and GM’s punishment.

Deane is a member of the The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, and a finance and information technology management major, Class of 2018.

Posted by Abigail Anaemeje. 

Yet, another automobile scandal! In September, the Environmental Protection Agency found that Volkswagen sold 482,000 cars in the U.S. that contained a “defeat device.” This type of software was used in diesel engines, “that could detect when they were being tested, changing the performance accordingly to improve results.” The result of this led to the “engines emitting nitrogen oxide pollutants 40 times above what is allowed in the US.” In addition, in November of this year, Volkswagen also found irregularities of carbon dioxide emissions levels in about 800,000 cars in Europe. In response to the emission-cheating scandal, Volkswagen has acknowledge their failure. As a result, they will have to pay a fine to the EPA of $37,500 for every vehicle that goes against the allowed standards.

This issue has not only effected the U.S. and Europe, but also France, South Korea, the UK, Italy, Canada, and Germany. In total, 500,000 cars in the U.S., 2.4 million in Germany, and 1.2 million cars in the U.K. have been recalled as a result of the emissions scandal. So far, no employees have been directly fired over the incident. However, the management board member and the head of sales and marketing, Christina Klingler is leaving the company on an unrelated issue.

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

Posted by Abigail Anaemeje.

In September of this year, a settlement was finally reached involving GM and their issue involving small- car ignition switches. In the last year, the company has had to recall over 2.6 million of their older cars to replace defective switches that, “shuts off the engine and disables power-assisted steering, power brakes and the air bags.” Such problems have been found in models such as the Saturn Ion and Chevrolet Cobalt. This deadly case drew even more attention when it was the cause of at least 124 deaths and 275 injuries. GM, the Detroit automaker, admits that, “some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year.” After hiring a federal prosecutor, Anton Valukas, he discovered that there has been no wrongdoing made by the top executives. However, in light of the incident, 15 employees of GM have been fired for falling to act in correcting the issue.

Overall, GM Motors will have to pay a wire fraud charge of $900 million in a late prosecution agreement. As for the families who have lost their loved ones, each will receive at least $1 million. In addition, $625 million has been set aside to compensate people who will agree with the settlement. Ironically, this case occurred a year after Toyota was caught hiding information about its defects that caused similar outcomes. Since it was much severe, Toyota agreed to pay a penalty of $1.2 billion; making it the largest penalty enforced on an automobile company.

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

Posted by Yasmine Miller.

Around the time of July, 2015 Whole Foods was being sued for misleading sugar claims. Shoppers of Whole Foods were angry when discovering that the evaporated cane juice is actually sugar. The company has built their popular reputation on only selling foods that are supposed to be healthier than the foods that you would get in local grocery store. Whole Foods has been fighting against their allegations in the misleading and false advertisements on their cookies.

According to the article “The plaintiffs allege that Whole Foods called sugar “evaporated cane juice” on the label of its Gluten Free All Natural Nutmeal Raisin Cookies in an attempt to make consumers believe that the cookies do not contain as much sugar as they in fact contain.” Further, still today Whole Foods denies the claims in the Missouri lawsuit. “In their filing in support of this motion, they argue that no reasonable customer could have been led, by the label on its cookies, to believe that the product didn’t contain sugar.”

Whole Foods mislead their customers by conceiving them that their healthy snack (cookies) weren’t as healthy as everyone thought. The company mislead and falsely advertised their cookies and violated laws that are in place to protect clients from being misled about products and or services. From my understanding, businesses are not allowed to make statements that lead to incorrect impressions.

Whole Foods violated the Code of Conduct in Business for their deception and dishonesty towards their customers. A code of conduct (also known as the code ethics) provides employees with guidance for handling difficult ethnical situations related to the business. Whole Foods definitely violated this conduct.

Yasmine is a psychology major at Seton Hall University, Class of 2017.

Posted by Leonardo Terzulli.

Two new cases that have just arose, DraftKings and FanDuel, two one-day fantasy sports websites that guarantee immediate cash payouts, have been banned in the state of New York. New York’s Attorney General Eric Schneiderman, sent a cease-and-desist letter earlier this past week accusing FanDuel and DraftKings to be considered illegal gambling. This whole debate started over news that had been circulating that an employee who worked for DraftKings won $350,000 in a contest on the website. There were allegations that the employee had inside information that was used to help him win the contest. DraftKings response to the allegation was “the information was only available after player lineups had been locked in.” Both companies claim that employees are banned from participating in competition on the website, and failed to check-up on internal controls.

Both DraftKings and FanDuel have chose to file lawsuits feeling that the Attorney General wasn’t fair in his cease-and-desist order. “The two companies made separate filings that asked the New York Supreme Court to throw out Schneiderman’s order. In its lawsuit, DraftKings argued that Schneiderman’s cease-and-desist order is unconstitutional, saying the Attorney General acted as ‘judge, jury and executioner.’”

While there are already a few states that have prohibited daily sports, I feel that this case is really going to be contingent on the employee who violated the rules and lack of check-up on the internal control in the companies.

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

Posted by Leonardo Terzulli.

McDonald’s has recently been involved in a case of a customer, Lynn Gipson, having hot water spill on her at a McDonald’s drive-through. The incident happened in 2012 when a cup’s lid popped off, “spilling the scalding water and causing second-degree burns on Ms. Gipson’s thigh and stomach,” a quote from the court documents. This incident is similar to the 1994 incident when Stella Liebeck sued McDonald’s in the case Liebeck v. McDonald’s Restaurants in which a top to a coffee lid came off in between Liebeck’s legs causing severe burn injuries with resulted in skin grafting. The turnout for this case was Liebeck was awarded $2.86 million. Gipson is alleging that McDonald’s drive-through employees delivered tea and other hot liquid substances in a negligent matter.

Unlike the case the in 1994, McDonald’s is most likely opting to not take the case to court and settle. The turnout for the 1994 case ended in the jury calling for McDonald’s to pay punitive damages. Knowing that they have faced a few court cases already this year, and that they will probably lose this case again, they feel the best choice for them is to just settle with Gipson’s terms. Although the case is still not fully resolved, it is safe to say that McDonald’s is going to lose. Similar to the 1994 case, this is a case that might seem a little obscure but, Lynn Gipson exerted all of her options, taking into account all actions by both parties, and taking the educated step to ensure she was given justice.

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

Posted by Ryan Neligan.

Human beings have a natural tendency to expand upon whatever the present is. In America, pilgrims settled in the state of Massachusetts and eventually expanded all the way to California. This trend of expanding continues today, as now people look forward to what is beyond Earth: Outer Space. This week Congress has passed a bill called the Space Act of 2015, which will help the small business of asteroid mining become an official operation.

The resources that are in outer space could be quite valuable to our world for the future. There are so many things untouched out there and in such great supply. In the past, “the prospect of large scale extraction of minerals from other planets or cosmic bodies has been both technologically and legally questionable, with starry-eyed entrepreneurs hard at work on the first part, but without much guidance on the second” (Good Magazine). Our civilization has not had the knowledge or technology in order to make obtaining a vast amount of resources from outer space an appropriate business. That has changed in current day though, as technology has made leaps forward in progress of this venture, and now to is officially about to become legitimate. With the passing of the Act, the business of space mining could boom into a full blown industry in the market, for “this lays the legal groundwork for private businesses to own extra-planetary resources, as well as sell their goods back on Earth” (Good Magazine). Huge potential is seen for space mining. Businesses are waiting for the new act to become official so they can jump into the extraterrestrial world of space mining and make as profit off of it.

The Space Act of 2015 is not yet complete to be used, but it is laying the foundation to open up endless possibilities that reach far beyond he extant of this world. Humans continue to expand the horizons that are in front of them, and this act would put them in the galaxies.

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

Posted by Ryan Neligan.

Earlier in the month, the state of New York banned the use of Fanduel and Draftkings, both websites in which people use to bet on daily fantasy sports. These websites are run daily in which people place down money and compete against each other in order to see who the best judge of sports is, and the winner acquires a large sum of money from those people who took place in the game. Games like this take place all over the world through these websites and have instantly gained a great amount of popularity.

The attention it is getting from the population has caused some heads to turn, such as the state government of New York. It has seen these websites as illegal gambling taking place within the state, and New York’s attorney general is set on shutting down this business. FanDuel and DraftKings are not going down without a fight though, as “the two biggest daily fantasy sports sites are taking on Eric Schneiderman in court, accusing him in lawsuits of bullying and abusing his powers in ordering that they stop operations in New York and are seeking a judge’s order to let them keep operating” (BloombergBusiness). To lose the participation of New York would be a huge blow for these two businesses, because New York accounts for “more than $1 billion each and have drawn investors across the sports, media and venture-capital industries. The state accounts for 5 percent of FanDuel’s customers and more than 7 percent for DraftKings, according to the companies’ filings” (BloombergBusienss).

Fanduel and DraftKings are taking action and are filing suit against this banning, for they do not see their business as an illegal online gambling site. They see it as a game of skill and knowledge in sports. Fanduel stated in its complaint about the case that “Such a shutdown would deprive hundreds of thousands of subscribing New Yorkers of the opportunity to pit their skills against the skills of others in selecting a ‘fantasy’ team of athletes from different sports teams and competing in contests offering prizes to the players whose fantasy teams perform best” (BloombergBusiness).

The case can be made for both sides of the argument. These websites are definitely a test of skill in the area of sports just like when people play regular Fantasy games, but it can also be seen as a website used for gambling and requiring money online, which is illegal in the state of New York. If these website continuing operating, the attorney general will take action and put chargers against these companies. The people of New York will be watching this case closely to see what the final outcome is, but for now daily fantasy sports has been banned from the state.

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

Posted by Alex Coyle.

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

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

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

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

Source:

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

Posted by Ruowei Peng.

Currently, there is a widespread belief that reaching a trade consensus between countries is an important part to contribute to foreign trade going on wheels. However, it is not easy to reach an agreement. NAFTA, the North American Free Trade Area, is signed by the U.S., Canada and Mexico. The three member states must abide by the principles and rules of the agreement, such as the most-favored-nation treatment and the transparency of procedures to eliminate trade barriers, but recently, there is a controversy about its revision.

According to William Mauldin’s essay, “Canada, Mexico Reject Proposal to Rework NAFTA Corporate Arbitration System”, Canada and Mexico refuse what the U.S. suggests in modifying the NAFTA’s proposal. Canada and Mexico point out that the U.S. aims to quit the organization, while they do not want any country to drop out since it may influence trade between countries. U.S. officials said that it is still negotiating. In the sixth meeting, they talked about anticorruption issues and Canada tried to put up an informal proposal that makes up for the shortfall in the U.S. demand for car production. It seems that everything develops toward a positive direction. However, the U.S. desires to secede from NAFTA, which will lead to problems that American companies would be protected by arbitration but companies in Mexico and Canada are not allowed to use the system to challenge the U.S. government. Large companies are trying to avoid it from happening because of court battles are always more expensive than arbitration. Canada and Mexico are likely to remove the investor’s state provisions and form their own bilateral investor agreement. The Trump administration proposed to shrink the challenges that the company may pose in the system. However, there is no proposal that will not be questioned by the public. Thus, the argument is still going on.

From my perspective, free trade is beneficial to a country’s development. Free trade promotes a country’s economic development, because countries in the free trade zone can circulate and reduce tariffs, while countries outside the trade zone maintain their original tariffs and barriers. To some extent, every member state wants to maximize its benefit though the proposal, but it doesn’t make sense. Thus, conflict produces and countries need to negotiate to find solution. It will be easier to reach an agreement if each of them step back and consider their citizens’ welfare and the economic benefit of all countries in free trade zone. I firmly believe that with joint efforts, they will come to an understanding.

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

Source:

https://www.foxbusiness.com/features/canada-mexico-reject-proposal-to-rework-nafta-corporate-arbitration-system

Published January 28, 2018 William Mauldin

Article’s Title: Canada, Mexico Reject Proposal to Rework Nafta Corporate Arbitration System

Posted by Ziheng Cai (Ricardo).

The crisis intensified in recent LeTv problems from financial problems including layoffs; the ups and downs of LeTv just like drama TV series, as the founder of LeTv, Jia Yueting again and again stood in the forefront. Let us begin with a LeTv internal letter in November 2016.

On November 6, 2016, Jia Yuting, the boss of LeTv, released an internal letter to the whole staff, saying the company is focused on mainly is the mobile phone supply chain problems. According to  statistics, LeTv phones have affected dozens of suppliers and agents, and the arrears amount to billions of yuan.

LeTv phones grab market share sales at lower than market prices; but, LeTv sells at a loss of 200 yuan, less direct costs and a net loss of 4 billion in the past two year. Sales cash flow cannot make up for the cost, therefore, to in order to balance this upstream supply chain is inevitable.

In addition, LeTv subsidiary mobile Hong Kong LTD has purchased an 18% stake in Coolpad for hk $2.73 billion on June 28, 2015, becoming the second largest shareholder of Coolpad. Then, in June 2016, LeTv gave out another 1 billion Hong Kong dollars for “whale swallowed” Coolpad. LeTv mobile owns about 28.90% of the shares of Coolpad Group, which makes it the single controlling shareholder. But maybe not for long, Coolpad mobile phone also because of the transformation of labor issues, capital shortage and other issues. The company’s forecast for 2016 was hk $4.21 billion.

In 2016 at an annual shareholder meeting, Jia Yueting admitted that LeTv Music made some mistakes. And in this event, an audit was rejected by LeTv. This is a violation of Article 33 of the company’s rules. In accordance with the provisions of Article 33, the shareholders shall have the right to consult, to a copy the articles of association, to the minutes of the meeting of shareholders, the resolutions of the board of directors, the resolutions of the board of supervisors, and the financial and accounting reports. The shareholder may request to consult the company’s accounting books. If a shareholder requests to consult the accounting books of the company, he shall make a written request to the company for the purpose.

Shareholders shall make a written request for a written reply within 15 days from the date of the shareholders meeting and explain the reasons. If the company refuses to provide this for inspection, the shareholder may request the People’s Court to request the company to provide for the inspection.

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

Source:

https://www.reuters.com/article/us-leeco-management/chinas-leeco-founder-resigns-as-chair-of-listed-unit-after-public-plea-for-patience-idUSKBN19R0B8

Posted by Masood Mohayya.

In Fall 2015, TaxSlayer, a web-based tax preparation service, fell victim to a data breach, specifically a credential-stuffing attack. Due to a security flaw, the cyber-attackers were able to gain access to almost 9000 TaxSlayer accounts, which provided them the highly-sensitive data (including social security numbers, bank accounts, and credit card information) belonging to TaxSlayer’s customers. TaxSlayer was not aware of this attack until January 2016, when a user complaint mentioned a compromised tax account. The discovery of this credential-stuffing attack resulted in a thorough investigation conducted by the FTC.

The FTC had determined that TaxSlayer failed to meet the standards set by the Privacy Rule and the Safeguards Rule of the Gramm-Leach-Bliley Act (GBLA). Although the GBLA only applies to financial institutions, such as banks or investment advisors, the fact that TaxSlayer partakes in tax return activities made it subject to the GBLA. The Safeguards Rule requires financial institutions to have a “comprehensive written security program”. Furthermore, they need to routinely monitor their cybersecurity programs, and “design and implement information safeguards” to control any risks or flaws identified during security assessments. Had TaxSlayer not violated these requirements, their network security risk could have been identified much sooner, and prevented the endangerment of thousands of customers’ information.

Moving forward, the FTC concluded that TaxSlayer must comply by the regulations set by the GBLA. Failure to do so would subject them to contempt risk. However, this incident opened larger doors for the FTC. One of their largest priorities is enforcing the importance of multi-factor authentication to access sensitive data for all companies, especially those not subject to the GBLA. They believe it is one of the most effective privacy protection tools, and can prevent countless cyberattacks. Although there are still no official legal mandates set in stone by the FTC, companies without robust network security put themselves at severe risk.

Masood is an IT management major at the Stillman School of Business, Seton Hall University, Class of 2019.

Source:

https://biglawbusiness.com/cybersecurity-enforcers-wake-up-to-unauthorized-computer-access-via-credential-stuffing/

Posted by Hailey Arteaga.

One of the biggest businesses in America is college sports.  Men’s Basketball is the second highest grossing sport of colleges across the nation.  According to Business Insider, a Division 1 Men’s Basketball teams alone drive-in an average yearly revenue of $7,880,290 (Gaines).  With this much money being streamed to a school each year for a single sport, some critics of the NCAA believe that Division 1 players should receive a salary.  However, some schools took this idea to the next level.  In a recent scandal, the FBI uncovered around 25 D1 colleges committing acts of bribery and corruption in the sport of basketball in an article written by the New York Post (Masisak).  One college under fire for violating the NCAA rule is Seton Hall University.  Recently though, the University has argued that they “have nothing to hide” (Braziller).  So, who is in the wrong?  This post serves as an analyzation of Seton Hall’s past and the basketball allegations that might hurt the business of the athletics department.

The NCAA defines an “eligible” athlete as one that does not accept outside payments because of their athletic status.  This extends to a professional agent bribing players with food, rent, cash, etc.  (Athnet).  Seton Hall was named as one of the schools by the FBI. They reported that the university was paying now New York Nets player, Isaiah Whitehead, extra money to play for the Pirates.  Agents discovered a spreadsheet with players past and present from multiple universities indicating the amounts of money they were being paid to attend and play basketball at their schools.  The spreadsheet revealed that Whitehead in particular received $26,136 his freshman year and was “setting up a payment plan” (Braziller).  This would go against the NCAA rules of amateurism as stated previously.  In more recent news however, The Hall came out and stated that they will be bringing in New York City law firm, Jackson Lewis P.C. to disprove the corruption scandal (Braziller).  Kevin Willard noted regarding the development that “I have a lot of confidence in my staff and ourselves in what we’ve done in the past.  I’m glad the school moved quickly on this so we can move on from it.”  With such a strong assurance of the team’s actions, Willard and the university should be expected to move on from the situation unscathed.

If Seton Hall were to be found guilty of the corruption, it would greatly affect the basketball team and success of the athletic department.  It could potentially risk the Hall’s ability to compete in the NCAA tournament.  The payout for the 2017 NCAA tournament that Seton Hall earned for the Big East Conference last year was $1,711,784 (Kesselring).  This means that not only would an inability to compete in the tournament affect the university itself, but also it would affect the entire Big East Conference.  Some even argue that Seton Hall could risk their 2016 Tournament Champion Title or even Kevin Willard’s position as head coach.  In the end, Seton Hall is risking a lot putting their name in the forefront of one of the biggest, recent scandals to rock college basketball.  If found that they have been giving players money under the table, the university will immediately face heavy financial cuts due to their disobedience of NCAA rules, hurting other sports, other schools, and the entire conference.

Hailey is a student at the Stillman School of Business, Class of 2020.

Sources:

http://www.businessinsider.com/college-sports-revenue-2016-10

https://www.athleticscholarships.net/ncaa-loss-eligibility-payment-agent.htm

https://nypost.com/2018/02/24/analyzing-how-scandal-will-affect-ncaa-tourney-coaches/

https://nypost.com/2018/02/24/seton-halls-plan-to-prove-innocence-in-fbi-corruption-probe/

https://herosports.com/ncaa-tournament/how-much-money-ncaa-tournament-earned-conference-2017-basketball-fund-a7a7

Posted by Claudine Rosca.

Endo International PLC is a generics and pharmaceutical company that delivers medicines to patients in the fields of urology, men’s health, etc. Despite their professionalism, their products allegedly were defective resulting in liability. Product liability is the responsibility that a manufacturer incurs because they sell or create a faulty product. In 2014, Endo “agreed to pay more than $400 milion to resolve lawsuit allegations.”

Their vaginal-mesh implants had eroded in their female patients which cause painful side effects. The devices are used to “support internal organs and treat incontinence,” which is a lack of control over urination or defecation. Officer Rajiv De Silva “said the company way adding $400 million to its $1.2 billion liability reserve for the devices.” The company was blamed for organ damage in women, combining to over 10,000 suits. The issue with the company was their lack of “stricter safety requirements because they are high-risk devices.” As a result of the 2014 issues among companies such as Endo and Johnson & Johnson, the FDA ordered “vaginal-implant makers to study rates of organ damage and complications linked to the devices.”

Following the allegations in 2014, Endo continues to pay millions to resolve the sums of lawsuits against the company’s vaginal-mesh implants. Recently, Endo set aside $755 million for the eroded implants which constitutes almost $2.6 billion that was paid to wipe out cases. Their Dublin-based Endo was shut down after a piling of complaints against their devices. Other previously named companies continue to face thousands of lawsuits from women who argue against their devices. The U.S. FDA continues to increase regulations on mesh inserts but companies continue to manufacture and sell faulty products.

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

Sources:

https://www.bloomberg.com/news/articles/2014-10-01/endo-said-to-pay-400-million-plus-in-vaginal-mesh-accord

https://www.bloomberg.com/news/articles/2017-08-07/endo-sets-aside-775-million-to-settle-remaining-mesh-lawsuits

Posted by He Yin.

Since the beginning of 2017, the combined market value of all encrypted currencies has risen from $17.7 billion to nearly $836 billion on January 5, 2018, more than 4,500% in more than a year. In such a short time, no investor has ever seen a significant appreciation of such an asset class.

China is often seen as one of the biggest battleground states in the secret revolution. Last summer, the Chinese government halted an initial public offering (essentially an initial public offering but used in digital currency) and announced that it would close the country’s cryptocurrency exchange.

Just recently, the Chinese government announced that it would track the facilities of cryptocurrencies such as bitcoin. On January 3rd, a press release issued by the central bank outlined a plan to limit the power supply of some bitcoin miners. Given that China is currently in the currency of mining occupies more than two-thirds of all the processing power of share, the move is an obvious for COINS community, and the evolution of the encryption currency is a whole.

Comment: China has been developing rapidly in the last forty years. Its economy is a well-functioning machine. As for Russia, however, it does not have as much. Its currency, the ruble, has been in turmoil more than once in the past few decades, and its dependence on oil has caused huge swings in its economic growth. So in theory, Russia appears to be the perfect candidate for the bitcoin revolution.

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

Source:

Link: https://www.foxbusiness.com/markets/forget-china-this-country-has-become-the-most-intriguing-cryptocurrency-battleground

Posted by Xin Tao.

“Uber disclosed on Nov. 22 that it paid hackers $100,000 to conceal a 2016 cybersecurity incident in which names, email addresses and mobile phone numbers belonging to some 57 million users around the world were stolen. License numbers of 600,000 Uber drivers were also obtained by outsiders, the company said.”

Now Uber likely to face a barrage of state legal action after breach. Forty-eight states have laws about the breach; they require companies need to inform customers about a data breach, particularly if sensitive customer information was involved. Uber will face different amounts of fines from different states. The charges unsealed by U.S. Southern District of New York were leveled against at an Iranian hacker. The hacker attacked multiple employee accounts, and used the accounts to steal some personal data.

HBO was also a victim of hacking when an attacker released scripts of the popular show “Game of Thrones,” as well as episodes of other shows and a trove of executive emails. In an anonymous email to HBO personnel, the attacker threatened to release more data unless the company paid a ransom of approximately $5.5 million in bitcoin, according to the indictment.

According to Bloomberg News, the attackers accessed a GitHub site used by the company’s software engineers and found login credentials to an Amazon Web Services account. From there, Bloomberg News reported the attackers found a cache of rider and driver information, and later emailed the company asking for money.

When a computer is infected with malicious code, the data on it will be encrypted, until a ransom is paid in bitcoin or another form of cryptocurrency. Personally, I think the most effective way to protect our data is we should not put our personal information on the internet, especially because of the dangers of phishing websites and apps. And we should update our computers regularly to fix vulnerabilities. Also for large companies like Uber, they should take the responsibility to make sure the system is reliable after they receive customer’s information.

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

News links: https://www.wsj.com/articles/hbo-uber-incidents-shed-light-on-ransoms-without-ransomware-1511353574

https://www.wsj.com/articles/uber-likely-to-face-a-barrage-of-state-legal-action-after-breach-1512131094#comments_sector

https://www.wsj.com/articles/uber-hack-fallout-illinois-sues-senators-ask-for-answers-1511825588

Posted by Hongkun Ma.

On Nov. 22nd, the ride-hailing app company Uber Technologies Inc. paid hackers $100,000 to conceal an incident that Uber revealed 57 million users’ personal information like names, phone numbers and addresses around the world. 600,000 Uber drivers’ license numbers also were released.

Whether the incident violated state law is being investigated by five state attorneys general: New York, Washington, Missouri, Connecticut and Massachusetts. Forty-eight states have laws that customers have right to know a company’s data breach and will impose fines if company violates them. For Uber, the incident has been so complicated, which lost the trust of millions of customers.

The incident reflected how a data breach can trigger responses from mass of regulators and enforcement agencies, and how a private company can have flexibility to deal with this kind of things. International regulators investigated the incident right away and data protection officers from throughout the European Union announced a task-force to look into the incident. Experts indicated that Uber had more flexibility in the way it report the incident, which can be reported as a security incident, because Uber is a private company. Uber is facing crisis of confidence and it’s difficult to win back the trust of their huge numbers of customers.

Finally, I would like to give some of my opinions. Uber is a private company, which is a third party between customers and taxi drivers. In China, Uber Company is almost monopoly. When it came into China market at the very beginning, most customers were attracted by its low price, which sometimes were even free to take a taxi. Uber gained a huge customer base from the beginning. Later, customers found Uber was not as cheap as before. It became more and more expensive, sometimes was more expensive than regular taxi. The strategy actually made the company lose some of their customers, but most customers stayed. And many customers found that Uber keeps ride details in their system for so long. Some of customers received messages that contained their personal information like history location, ride history or even private residences. From my perspective, it is possible that Uber sold customers’ personal information to third-party companies which would look for visits to key locations, such as particular market, meet-up events, café and so on.

The incident of Uber Company that they concealed the cybersecurity problem really violated law from state level, and not federal. For Uber, the challenge quickly became more complicated and needed to be handled.A company’s reputation can be easily built up and destroyed. And how to win back the trust of customers is becoming a really hard task for Uber Company.

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

Source: https://www.wsj.com/articles/uber-likely-to-face-a-barrage-of-state-legal-action-after-breach-1512131094

Posted by Julian Toledo.

Known for its multiple smart phones and other electronic products, Apple has recently been accused around the globe of intentionally shortening the battery life of older iPhones to boost its profits. Consumer groups and government officials, primarily of the United States, South Korea, and France, have forced this technology company to undergo many lawsuits for unethical business behavior for almost two months. During late December of 2017, customers questioned whether Apple had adjusted the performance of its phones after a Reddit user shared online that his old iPhone had been functioning poorly until he replaced its battery with a new one. Consequently, other people with different iPhone versions began to post about their similar experiences. After quickly receiving huge backlash, Apple explained that it slowed down its phones with aging batteries, including the iPhone 6, iPhone 6S, and iPhone SE, after introducing an iOS update last year to prevent these products from unexpectedly shutting down. In addition, the company claimed that it has “never—and would never—do anything to intentionally shorten the life of any Apple product.” Since the uproar, Apple has made battery replacement cheaper and said it will bring a new iOS update that will notify users about their phone’s battery health. Although some individuals believe that Apple acted responsibly for stopping phone shutdowns, others are still complaining that the company could have handled this issue better.

As of January 12, Apple is facing over thirty lawsuits around the United States, with the majority of them arguing about the company’s deliberate slowdown of older iPhones without advising users. Scott Grillo, a Californian citizen and the plaintiff of a recent lawsuit, criticized Apple for “unfair business practices” and “breach of implied contract.” He told the court that after updating his device from a software upgrade, his phone began to operate inefficiently. Furthermore, lawmakers have been accusing Apple for failing to properly communicate with customers and manage the widespread problem. One government official that has challenged the company in this way is Senator John Thune of South Dakota. Thune argued in his letter to Apple CEO Tim Cook that even if the company planned to slow down older models of the iPhone to ultimately prevent shutdowns, “there should have been better transparency with respect to these practices.”

Outside the United States, more than 120 members of the South Korean organization called Citizens United for Consumer Sovereignty filed a civil suit against Apple on January 11. Led by head plaintiff Go Gye-hyun, the group is currently suing for the alleged destruction of property. For the damages, this consumer organization strives for two million win, or about $2,050, for each plaintiff. In addition, Apple’s recent controversy spread to France, where it is illegal to intentionally reduce the lifespan of goods to force buyers to purchase new ones. In fact, according to French lawyers, if executives are found engaging in this type of unethical business activity, they can be sentenced up to two years in prison and have their companies fined five percent of their sales revenue. In Paris, the public prosecutor’s office received complaints from another consumer group known as Stop Planned Obsolescence. Laetitia Vasseur, the cofounder of this organization, seeks to protect all consumers, especially because of how much more expensive Apple products are in Europe than in the United States. She stated, “At more than €1,200 per phone, these practices are unacceptable and cannot go unpunished. It is our mission to defend consumers and the environment.” This amount in euros translates to about $1,400, which demonstrates how problematic it is for individuals to replace their older, malfunctioning iPhones.

Despite its financial success, technological influence, and popularity across the world, Apple holds a big responsibility in terms of legal issues. As a multinational company, Apple is seeking to regain its trust with consumer groups and government executives. However, with these many lawsuits filed against the company within a two-month period, it is uncertain how long it could take Apple to fix its reputation. Overall, this recent controversy accurately shows how such a small business action can significantly backfire. If a company’s conduct does not truly satisfy consumer demands, it can result in legal consequences that can ultimately impact its performance and status in the market.

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

Sources:

http://money.cnn.com/2018/01/12/technology/apple-iphone-slow-battery-lawsuit/index.html

http://variety.com/2017/digital/news/apple-slow-iphone-backlash-1202647220/