Posted by Mike Elwell.

A recent article written by David Pitt discusses a law regarding the protection of animal farmers, was recently withdrawn by the US agency after being delayed six months by President Trump. The reason for this rule being instated was so that farmers would have an easier time suing companies that were unfair, this was called “The Farmer Fair Practice Rule”.  Senator Charles Grassley, an Iowa farmer, claimed that the reason for the cancellation of the law was that “They’re just pandering to big corporations. They aren’t interested in the family farmer.” This was one of the many criticisms regarding the Trump administration.

Many other farmers or those in power in such agricultural based department’s claim that Trump administration is “opening the floodgates to frivolous and costly litigation”. While some other claim that the Obama administration ignored this up until the very end and the rule possibly couldn’t help farmers to the degree initially thought. However many farmers still believe that this rule could help and that Trump is allowing foreign interest to control the growth of American farmers. Many farmers are having troubles with Trump’s administration because they believed he more focused on the wealthy of America and not the farmers who provide produce domestically.

It seems that Trump is turning his attention away from domestic farms and allowing companies to take advantage of otherwise struggling farmers. Part of my family owns a cow farm in upstate New York and they often struggle with big companies because they either expect more out of the farm than is physically possible or they try to often make things cheaper since they are buying in large amounts. Big companies often try to take advantage of the little guy and without proper regulation can lead to the downfall of one of the backbones of America.

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

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:

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 Sam Battista.

I came across this article recently about these topics that were brought up in class, and I thought it was appropriate to write a blog pertaining to this article. Seven reputable members of the Geneovese crime family were recently arrested on accounts of money laundering and racketeering. The group allegedly raked in millions of dollars through the Garden State by gambling, loansharking, and unlicensed check cashing. Most of these charges fall under the RICO laws because this is organized crime.

The group ran a massive loansharking operation, which generated about 1.3 million dollars in interest a year. It operated an offshore Costa Rica Gambling website and an unlicensed check cashing business, making over nine million in fees over a four year run. The group also laundered $660,000 dollars in drug money out of a Florida based check cashing entity. The group also gave out multimillion dollar loans with interest rates upwards of 156 percent. In addition, the group ran a illegal check cashing business out of a restaurant in Newark that cashed-in over 400 million dollars.

All of these violations are prohibited in the RICO laws and are considered organized crime. Most of the acts committed were covered or ran out of legitimate businesses. These individuals were all from New Jersey and are currently being prosecuted for their federal violations. People often think these type of crimes only happen in movies, but the truth is it’s a multimillion dollar business with violations happening everyday.

Sam is a business administration major with a concentration in real estate at Montclair State University, Class of 2016.

Posted by Anthony Leineweber.

The coal business just isn’t what it used to be and some companies are finding that out the hard way.  Most recently, it was Bumi, “Asias most-indebted coal miner,” that had to bite the bullet and file for creditor protection here in the U.S. “Bumi Investment Pte Ltd listed assets and debt of as much as $1 billion each in Chapter 15 papers filed today in U.S. Bankruptcy Court in Manhattan.” Chapter 15 bankruptcy is fairly new as of 2005 and deals with problems like debt and the control of certain assets involving more than one country. “Companies use Chapter 15 of the Bankruptcy Code to fend off creditor claims in the U.S. while they reorganize their finances elsewhere.”

“Bumi Investment and Jakarta-based Bumi Resources failed to make a coupon payment on $700 million of October 2017 notes last month, following a 30-day grace period.” Clearly, they are in serious trouble after not being able to get the money together even after being granted a 30 day grace period. About a week ago, the Singapore court disallowed any action or continuation by creditors for six months. “The court-obtained moratorium marks another chapter in efforts to contain the fallout in their mainstay coal business. Coal prices have slumped more than 50 percent since the end of 2010.”

Anthony is a marketing major at Montclair State University, Class of 2016.

Posted by Anthony Leineweber.

$167 million dollars sure is a lot of money, and that’s exactly what Decura investment firm is looking for from UBS’s investment bank. Decura claims their investment firm was not told about UBS’s future plans to downsize before agreeing to a contract with them in 2012. UBS “is not the bank with which Decura contracted on May 31, 2012,” Decura said in the documents. UBS calls their downsizing part of “project accelerate” and that their production and business standing has not and will not be affected in any way.

The reason for downsizing, according to UBS’s CEO Sergio Ermotti, is to “focus on money management while cutting costs to boost profits.” Clearly, Decura investment firm isn’t happy about that. They claim the cuts “mean the bank isn’t able to market its algorithmic trading and hedge fund products, triggering a termination clause in the contract.”

We’ll see how it all plays out, but it looks like these two sides aren’t coming to an agreement anytime soon.

Anthony is a marketing major at Montclair State University, Class of 2016.

Posted by Nicholas Andreula.

Three major U.S firms along with one German company are currently being investigated for possible price manipulation. “Goldman Sachs Group Inc., HSBC Holdings PLC, Standard Bank Group Ltd. and a German chemical maker” are being accused of working together in “manipulating platinum and palladium prices.” It is believed that this price manipulation has been going on for many years and has had a considerable impact on investors and individuals within the industry.

“Modern Settings filed the suit as a class action on Tuesday,” with what the firm believes to be substantial evidence in support of the case. This incident has caused a great deal of speculation regarding “price rigging” both within and in other unrelated industries. Companies such as Modern Settings are requesting the implementation of regulations to prevent similar incidences from happening in the future.

The firms involved have “refused to comment on the lawsuit when contacted by the Wall Street Journal.” Although the case has initiated the investigation of price manipulation within the industry, many believe that the “the changes have come too late.”

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

Posted by Nicholas Andreula.

In recent months, a Toyoko-based airbag manufacturer, Takata, has been under fire with a multitude of lawsuits. Complaints of the malfunctioning airbags first began in 2010 when a woman was seriously injured after “shrapnel allegedly flew from one of the safety devices during the blast that inflated them.” Since then, an increasing amount of incidents involving the defected products have been reported and investigated. Due to many injuries and even some deaths, numerous individual suits and a “class-action suit in Florida against Takata and automakers including Honda, BMW, Nissan, and Toyota” have been filed.

A substantial amount of automakers have installed the defective airbags in vehicles, resulting in recalls on over “7.8 million cars in the U.S.” Owners of recalled vehicle models are being urged not to operate vehicles until the defected devices are either disabled or replaced. Takata and various auto manufacturers are currently facing a great deal of impending charges based on the recent incidents involving the devices.

In the past, Takata has been recognized for many important contributions to automobile safety by the “NHTSA, the top U.S. auto-safety regulator.” Due to the current and the possibility of future lawsuits, widespread fear for the company’s financial well-being has caused the company’s shares to fall “about 50 percent so far this year, as news of the injuries and the $413 million charge it took this summer.” Currently the issues regarding the device malfunction are being fully investigated by Takata, automakers, and the “U.S Department of Transportation.”

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

Posted by Tiffany Zapata.

Sergei Pugachyov former banker, senator, and confidante to Valdimir Putin is now speaking out on his placement on Interpol’s most wanted list. According to Pugachov, he made the list because of a campaign created by elite Russian politicians against him. He is currently facing charges in Russia and the UK due to the 2010 collapse of the International Industrial Bank.

Pugachyov commented on Interpol’s activity, stating “Interpol’s involvement is illegal and he’ll explore ‘all avenues’ to fight to get his name removed.” He was listed on the international law enforcement agency’s roster and is being charged with counts of embezzlement, according to Interpol.

In attempts to prove his innocence, Pugachyov is trying to bring light to the situation and call-out Russian politicians. He stated: “The involvement of Interpol by the Russian authorities is an attempt to give credibility to the actions of high-level Russian officials involved in the expropriation, including direct orders of President Putin and a number of Russian cabinet ministers.”

He was subject to a red notice by Interpol but was able to cancel it by challenging it in court. He is determined and says he will do anything in his power to cancel the second notice as well.

Pugachyov was once known as one of the richest men in Russia. He now lives a bare life, stripped of all his assets and politically targeted in Russia due to the collapse of the bank in 2010. With the history of Russian governments, we can speculate this will not end well for Pugachyov.

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

The European ATM Security Team (EAST) discovered that ATM hackers are now drilling holes in ATM machines near the card reader and installing electronic devices which tap into the “read head” of the magnetic strip reader to steal information.  Normally, thieves would “skim” the information on the magnetic strip through an “overlay” device that would actually read the magnetic strip outside the machine when an unwary customer would insert his or her card.

Instead, these new devices work like a wiretap inside the machine and read the information as it passes through the head of the reader.  The hole is then covered up with a decal after the device is removed with the stolen data.  EAST still classifies the crime as “skimming” even though “‘the the magnetic stripe [on the customer/victim’s card] is not directly skimmed as the data is intercepted.’”

Cameras are still used by thieves to steal PIN numbers; therefore, EAST suggests customers cover the keypad with their hand before entering their PIN.

Posted by Genna Salvtoriello.

General Motors has been hit with a $3 billion dollar lawsuit by the state of Arizona. The lawsuit is due to a record number of 2.6 million vehicles this spring that have been claimed to be linked to safety defects such as a faulty ignition switch. This defect has been linked to 33 deaths and more injuries according to Kenneth Feinberg, who is looking after compensation to the victims of this defect and the damage that it has caused. Arizona’s lawsuit is focusing on the loss of value GM car owners have suffered due to the now damaged reputation of the “General Motors” name. The law that Arizona is suing General Motor’s under is a consumer fraud law that has a maximum penalty of $10,000. And that’s just for each individual violation. There are about 300,000 GM vehicles that are registered in the state of Arizona. Which means a judge could fine General Motors up to $3 billion dollar, according to a report in the New York Times.

However, the ignition doesn’t seem to be the only issue with GM cars. The lawsuit that Arizona is pending shows not just one, but multiple defects with the GM vehicles. These defects include seat belts, brake lights, airbags and transmission cables. The GM vehicles have dropped significantly in value because of the safety defects, which has cost those car owners to lose thousands of dollars. “GM is committed to setting a new industry standard for safety, quality and excellence. This includes recalling vehicles proactively when we identify a safety issue,” said spokesman James Cain. GM is also under investigation by the U.S. attorney in New York, congressional committees, and the National Highway Traffic Safety Administration. The number of claimants is rising for GM who is running a compensation program. The company is allowing potential victims of this recall over faulty ignition switches an extra month to file claims seeking compensation. It will be clear in the near future to see just how many people have been put at risk, or even worse, actually hurt by this life threatening recall.

Genna is a marketing major at Montclair State University, Class of 2017.

Posted by Genna Salvatoriello.

Target has come up with a brilliant way to not only give their shoppers good deals on Black Friday, but to make them come back wanting more. Target offered 10% off of its gift cards on Black Friday, which will help bring shoppers back. Target also revealed certain deals that will get its customers out of their homes and into the store. Some of these deals Target is offering include $50 off Beats headphones and $10 off an Apple TV. The catch is that it only applies if customers order online, and them pick these items up at the store. They also announced that their mobile app will offer 50% off a different toy each day throughout the holiday season.

After the data breach that compromised millions of customer accounts last holiday season, Target is hoping that these promotions will encourage more customers to shop with them. Target has made the right move with creating these promotions, especially because online shopping growth is expected to far outpace in-store growth this year. The National Retail federation projects that in-store sales will climb by 4.1%, while online sales will jump between 8% and 11%. Hopefully this will not be the case for Target, as they do their best to encourage customers back into their stores.

Genna is a marketing major at Montclair State University, Class of 2017.

Posted by Zhan’e Shaw.

Iknoor Singh, a Sikh student at Hofstra University, filed a lawsuit against the United States Army, claiming “the service refused to grant him a religious accommodation that would allow him to enlist in his school’s ROTC program without shaving his beard, cutting his hair and removing his turban.” The Army denied Iknoor Singh’s request for a religious exemption from the military’s grooming policies when he enlisted as a cadet on the grounds the exemption would have “’an adverse impact on the Army’s readiness, unit cohesion, standards, health, safety, or discipline.’”

The Army later stated Singh could seek an exemption only after he was enlisted as a cadet, “creating a reef in which Singh would have to violate his faith to be able to apply for a religious accommodation.” Singh stated “’I couldn’t believe the military was asking me to make the impossible decision of choosing between the country I love and my faith.’”

The ACLU and United Sikhs filed the suit on Singh’s behalf claiming the “Army’s denial of religious exemption violated the Religious Freedom Restoration Act.” In a statement, Hofstra said it “’entirely supports Mr. Singh’s ambitions to serve his country. He is currently enrolled in the ROTC class and we are providing him leadership training to the extent that the U.S Army has allowed.’”

In September 2014, the Army adjusted it’s grooming policies to allow female soldiers “to wear braids, cornrows,” and twists in their hair resulting from public complaints. The case is still ongoing.

Zhan’e is a business management major at Montclair State University, Class of 2016.

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 Steven Catudal.

How much money should it cost to save someone’s life? Should companies be allowed to create prices on life-saving medications? Over the past few months, there has been more and more cases of pharmaceutical companies taking advantage of their monopoly and increasing prices. The price of an EpiPen, a device used to save someone from severe allergic reactions, has increased 500% in recent years according to the New York Times. Limited regulations and a lack of competition are causing US lawmakers to demand investigations about this large increase in price.

Mylan, the company now producing EpiPen’s, received the item through a merger with a generic German pharmaceutical company. When purchased, the German manufacturer would sell the EpiPen for around $57. Ever since the day of the merger, Mylan has been increasing the price. In May 2016, the price of an EpiPen was $608.61. Lawyers and politicians have been demanding that the price is decreased. They are investigating Mylan for breaking anti-trust laws and gouging customers. New York attorney general Eric Schneiderman said that, “No child’s life should be put at risk because a parent, school or health care provider cannot afford a simple, life-saving device because of a drugmaker’s anti-competitive practices.” Another opponent of Mylan’s strategy, Hilary Clinton, raised arguments against Mylan’s unethicality for charging so much for a life-saving medication.

The EpiPen now brings in more than $1 billion every year compared to the $200 million that it made for the prior German pharmaceutical company. As revenues have spiked, so has the salary of Mylan CEO Heather Bresch. She now earns more than $18 million through her salary and other compensations. That is 671% more than she earned in 2007, when the price spike began. When confronted with the increased price, Bresch defended herself saying that, “No one’s more frustrated than me.” She went on to explain that the high prices are caused by the United States health-care system. In comparison, EpiPens sold in Europe, are subsidized due to regulations on pharmaceutical companies. Bresch has the opportunity to make a change; she can make the EpiPen more affordable once again, but she cannot blame anyone but herself for this large jump. Once an EpiPen’s price returns back to a reasonable cost, then all people with severe allergies will have the opportunity to afford medication necessary to save their lives.

Steven is a member of The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, Class of 2020.

Sources:

http://www.cnbc.com/2016/08/25/mylan-expands-epipen-cost-cutting-programs-after-charges-of-price-gouging.html

Posted by Michaela Jerkowski.

In recent events, McDonald’s Restaurants settled a labor lawsuit pending from 2014, and was ordered in federal court to pay $3.75 million dollars to about 800 employees in California. The lawsuit states that Smith Family LP, who franchised five restaurants in California, “violated California law by failing to pay overtime, keep accurate pay records and reimburse workers for time spent cleaning uniforms.” (Fortune 6).  The case was the first time in history that McDonald’s settled a class action law suit that was filed by franchise employees.

Over the past couple of years, McDonald’s has dealt with multiple different problems involving franchise employees. Aside from this multi-million dollar lawsuit, they were also hit with a sexual assault lawsuit involving 15 franchise employees. The McDonald’s corporation has been in and out of court trying to find out whether or not they are considered joint employers with the franchise owners who are causing this backlash with employees.

Although you might think that this lawsuit isn’t much of a high profile case, considering McDonald’s is a billion dollar company, the reason it’s been brought so much attention is because it’s the “the first time the company has settled legal claims by a group of U.S. workers at one of its franchises.”(Time 1). This lawsuit could open doors for many more that may appear in the future, so it would not be a surprise if the company now gets hit with more lawsuits.

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

Sources:

http://time.com/4552835/mcdonalds-settlement-labor-law-california/?xid=IFT-Section

http://fortune.com/2016/11/01/mcdonalds-court-settlement-franchise-workers-california/

Posted by Melani Filosa.

The Consumer Product Safety Commission, a regulatory committee created by the Consumer Product Safety Act enacted in 1972, regulates all consumer products in order to protect the buyer. They promote safety by issuing recalls, developing standards, and requiring warning labels. Because this committee regulates consumer products, they first needed to define exactly what fell under the tile of a “consumer product.” The definition can be found in Section 3 of the CPSA (Consumer Product Safety Act) linked here https://www.cpsc.gov/PageFiles/105435/cpsa.pdf. The act creates exact parameters of what the CPSC can regulate, which excludes all firearms and ammunition. The exact language of the Act reads “The Consumer Product Safety Commission shall make no ruling or order that restricts the manufacture or sale of firearms, fire-arms ammunition, or components of firearms ammunition, including black powder or gunpowder for firearms Section 3(e) of P.L. 94-284 [S. 644]; May 11, 1976,” generating the obvious question: should firearms be included in the definition of “consumer product,” or would that type of regulation be unconstitutional. Because the debate over gun use has been in the spotlight, it is important to know the argument for more regulation and that against it. This post will aim to inform only, in the hopes of creating knowledgeable voters on either side of the issue.

The Trace, an online news media source whose mission is to “close that deficit through daily reporting, investigations,” wrote an article titled “Cars, Toys, and Aspirin have to Meet Mandatory Safety Standards. Guns Don’t. Here’s Why,” written by Olivia Li. The argument in favor of expanding the definition often relies on the popular gun/car analogy, used by individuals and President Obama alike. Here is essentially how that analogy goes: automobiles have regulations, such as seatbelt use and airbag regulations, in order to protect both drivers and pedestrians, and we have also created regulatory agencies to oversee that automobiles are built to meet these standards. At the same time, there are no regulations or oversight in the creation of guns, which are arguably used in households and therefore a consumer product, just like a car. Li writes:

No federal agency oversees how firearms are designed or built. While the federal government can mandate recalls of unsafe toys, polluting cars, or even discolored medications, it’s unable to recall defective firearms. There is also no system in place to track accidental deaths caused by malfunctioning weapons. Rather, the firearms industry self-polices its products, establishing its own design standards and initiating its own voluntary recalls.

This quote captures the essence of the argument in favor of expanding the definition. If every other product used by a consumer, which is pretty much everything, can be regulated, why should guns be any different. It is important to note, however, that there are safety standards imposed by SAMMI, Sporting Arms and Ammunition Manufacturers’ Institute, yet these standards are voluntary. Those who wish to expand the definition believe these regulations should not be voluntary and gun safety should not “fall on the shoulders of the gun owner,” but instead by mandated by the federal government and regulated by in agencies.

Again, the question asked by those in favor of expanding the definition is why are guns different than other products, which leads to the argument against the change to the definition. The two major arguments from this side are 1) there are regulations, and the gun manufacturer can only be held responsible to a point, and of course 2) the Second Amendment. The first defense, argued by NPR on their “Break it Down” page, where they breakdown what candidates and politicians say and fact check their statements. The article entitled “FACT CHECK: Are Gun-Makers ‘Totally Free of Liability For Their Behavior’?” points out that, in fact, gun companies are liable for their products in certain instances and are responsible for meeting standards and regulations. This leads to the arguments against expansion of the definition. They essentially argue that with more regulations, gun manufacturers will unfairly be held responsible for misuse of guns, turning the gun/automobile analogy on its head saying car manufacturers are not held responsible for drunk drivers. This argument relies on the gun doing what it is intended to do. As Kortzleben states “If you aim and fire a gun at an attacker, it’s doing what it was intended to do.” Finally, the Second Amendment argument states that the U.S. Constitution does not allow for the same regulation of guns, and that any changes to include guns as a consumer product would be unconstitutional, which again can be found in the CPSA itself.

As one can easily see, after reading the arguments on either side of the discussion, the authority and legality to include guns and firearms under the definition of consumer product is unclear. Both arguments root themselves in the American legal system. For this reason, it is imperative to understand the discussion and confront the proposed problems in either argument, creating an informed constituency who cares about their rights and the issues. The argument over gun control is not going anywhere, and therefore it becomes each of our duty to know the debate.

Melani is an English major with a minor in legal studies at the Seton Hall University, Class of 2018.

Works Cited:

https://www.cpsc.gov/PageFiles/105435/cpsa.pdf

https://www.thetrace.org/2016/01/gun-safety-standards/

http://www.npr.org/sections/itsallpolitics/2015/10/06/446348616/fact-check-are-gun-makers-totally-free-of-liability-for-their-behavior

Posted by Gregory Scavelli.

Super storm Sandy had a devastating impact on the North-Eastern portion of the United States, areas like Long Island, New Jersey and Connecticut got trashed because of the regions un-preparedness in cases of the storm. To bring in a personal connection, the area that I am from on Long Island got it particularly bad, the Long Beach boardwalk that was a staple of the town since 1914 was completely broken down and destroyed and after that the town went into rebuilding mode. Now Long Beach is for the most part is better than the way it was before the storm. This was happening the other regions as well, the Jersey Shore was another area that got hit particularly badly. It’s been 4 years since the storm, but now that the re-building process is almost complete a lot of problems are steaming from it.

Since the storm New Jersey state prosecutors have filled criminal chargers to 161 cases for over 15 million dollars on account of fraud. More than one third of those cases have been fired this year. An example of an Ocean County motel pleaded guilty to falsely claiming that he had sheltered Sandy victims to get $81,000 in federal funds.

The problem facing many of these corporations is that many of them have no ethical business policies. For example raising the price of gas in the time of a crisis is very unethical because in most of these crisis situations people are low on money and making the pay extra for basic needs is unethical. Also, taking personal benefit in a crisis situation is also unethical, the example I earlier about the motel using falsified records to get reimbursed is just taking a situation in which people are suffering and using it for gain. Which is just a very un-ethical way of doing business.

Gregory is a sports management and marketing major with a minor in legal studies at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Katherine Harris.

This article brings up the question whether or not a company has liability in how or when the customer uses their product. In this case, Ashley Kubiak was driving her Dodge Ram truck, as she checked her iPhone for text messages. Kubiak then crashed her truck into another vehicle killing two people and paralyzing a child. This is just one case of distracted driving that we have seen a rise in throughout the past 50 years. The families of the victims have sued Apple because, Apple knows that their devices are distracting to drivers, but did not prevent Kubiak from using it while driving.

While a Texas magistrate made a suggestion to dismiss the case on the grounds that the lawyers could not prove the iPhone caused the fatal accident. “Ms. Kubiak was convicted of negligent homicide and sentenced to five years on probation” (Richtel). Kubiak now leaves her phone in the back seat to avoid the temptation of using it while driving. This case of Apple’s iPhone product liability puts Apple in a difficult situation. Especially, because Apple has the technology to prevent texting while operating a motor vehicle, but has not implemented it.

Although, there are laws and public education initiatives against distracted driving, Apple, Verizon, and AT&T acknowledge the effectiveness of these campaigns. Deborah Hersman, the president of the National Safety Council and the former chairwoman of the National Transportation Safety Board said it best, “The technology exists – we just don’t have the stomach to implement it” (Richtel). Implementing the technology to turn off text messaging while someone is driving brings up questions about the economic, social, and ethical concerns.

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

Posted by Lilli Wofsy.

On October 11, 2016, Samsung reported that they would completely recall the Galaxy Note 7 and stop trying to fix the product overall. After there were many reports of the smartphone exploding or causing severe burns, Samsung attempted to fix the problem. With the hope of still profiting from the product, Samsung “decided to continue shipping new Galaxy Note 7s containing batteries from a different supplier” (Chen and Sang-Hun). Yet, using ATL battery instead of the original SDI battery did not help solve the issue of overheating. Many former employees of Samsung expressed they felt that the “militaristic” environment did not allow for there to be any communication from workers and the corporate bosses who just wanted to release the device.

While there have been “92 reports of Note 7 batteries overheating in the United States,” this is not the only Samsung product that has been flawed (Chen and Sang-Hun). There has been a recall in Australia for 144,000 washer machines that were likely to start fires in homes. Samsung has also had to recall “184,000 microwave ovens in the United States and 210,000 refrigerators in South Korea” (Chen and Sang-Hun). Though they have had many small recalls other than these large ones, customers have positively described their quickness in replacing or refunding their clients for the inconvenience.

Samsung has faced a hard hit due to the recent issues they have had with their products. On October 12^th, Samsung noted they “absorb[ed] $2 billion in losses” (Chen and Sang-Hun). They reportedly earned 33.3 percent less that what they had projected to earn from the Galaxy Note 7. Between October 11^th and 12^th, the company’s shares went down 8.65 percent. With Samsung fighting with Apple to keep up with their never-ending battle, Samsung might be releasing products too quickly in hopes of beating their opponent. Yet Apple has not faced as many large recalls when compared to Samsung, rather they have only recalled one of their Nano products and one type of Beats. Maybe if Samsung’s workers have more openness about possible problems with products or testing out products more prior to releasing them, they can revive their company and make back up what they have lost from their present predicament.

Lilli is an English and legal studies minor at Seton Hall University, Class of 2018.

Sources:

Posted by Timothy O’Shea.

Tesla Motors, an automotive company in the Automotive Energy Storage industry, “who’s mission is to accelerate the world’s transition to sustainable energy.”(tesla.com) It “was founded in 2003 by a group of engineers in Silicon Valley who wanted to prove that electric cars could be better than gasoline-powered cars”(tesla.com). As of now, all Tesla Cars will be made with complete self-driving software. It is their belief that these self-driven vehicles will help to improve safety while also aiding in the transition to the world’s sustainability. However, Tesla’s autonomy options have had some challenges and have caused Tesla some trouble. Tesla has now faced a number of lawsuit’s regarding false advertising and marketing, more specifically false advertising and marketing of the car’s “Insane Mode”, a performance mode intended for fast acceleration, and also for the car’s autonomous mode.

After a few crashes, one of which was fatal, Tesla Motors has been receiving criticism for the way in which it chose to market and deploy its Autopilot driving-assist system. In the summer of 2016, Tesla was admittedly being investigated by the National Highway Traffic Safety Administration, for its first reported fatality in a self-driving vehicle, while a second potential crash, involving the Autopilot feature, arose. Multiple cases have erected in China after Tesla crashes, with one resulting in fatality, a 23 year old driver whose “dashboard camera showed the car hitting a cleaning truck from behind while traveling on a highway in central Hebei province.”(forbes.com) Another fatal crash took place in Florida, where Joshua Brown, 40 year old supporter of Tesla, was hit by a tractor trailer which was undetected by neither driver nor autopilot. A final crash that raise concern against Tesla’s Autopilot software occurred on the Pennsylvania Turnpike on July 1, where Albert Scaglione reportedly activated the self-driving feature prior to hitting the guard rail “off the right side of the roadway… crossed over the eastbound lanes and hit the concrete median.”

Amongst the many crashes and accusations, Tesla has continued to stand behind it’s autopilot saying that the crashes resulted from human error, rather than system error, and in most cases the opposing parties have not been able to prove otherwise. On a bold posting on its website, the company said “there is no car company in the world that cares more about safety than Tesla and our track record reflects that.”(usatoday.com) This statement resulted from the NHTSA’s disclosure it was further investigating the electric car company for the possibility of having their customers sign non-disclosure agreements that would impede reporting. With repeated complaints, the NHTSA continues to investigate the validity of Tesla motors vehicle safety but has not found any major problems at this time. From suspension concerns, to accusations of false advertising, to crashes and claims against the Autopilot feature, Tesla remains under consistent fire and has been on its toes ready to adapt and turn its feedback into more environmentally, economically, and logistically friendly features.

In more current news, Tesla has been running into some speed bumps in its growth and develop in Germany. The Federal Motor Transport Authority of Germany, has recently sent a request to Tesla asking them to stop advertising the “electric vehicles’ Autopilot function, claiming that this feature misleads drivers into unsafe inattention to the road.”(eetimes.com) Yhe claim released in late September, implies that Motor companies must refrain from using misleading terms like “auto-pilot”, “automated”, or “self-driving” if their cars do not possess the ability to control themselves completely independent of human involvement.” (eetimes.com) Tesla has responded saying its “Autopilot always requires that the driver remain engaged and ready to take over at any time.” (electrek.com)

Timothy O’Shea is an undecided business major at the Stillman School of Business, Seton Hall University, Class of 2019.

Sources:

Tesla issues thorough response following harsh critique of Autopilot by German authorities

http://www.eetimes.com/document.asp?doc_id=1330633

https://www.tesla.com/about

http://www.forbes.com/sites/dougyoung/2016/09/19/tesla-takes-new-china-hit-with-driver-death-lawsuit/#37346299284f

Posted by Chase Mulligan.

On October 21, 2016 a coordinated distributed denial-of-service attack (DDoS) was made on internet systems operated by Domain Name Systems (DNS) provider Dyn resulting in massive disruption of internet services across the United States and Europe. Internet services along most of the east coast, west coast, and southern parts of the country were affected. The cyber-attack has been called an “historic attack”; (flashcritic.com) the first robot-based digital assault using the Internet of Things that linked millions of on-line devices in a coordinated operation. This tactic uses a novel approach of manipulating electronic devices connected to the Internet of Things for the attack capitalizing on the weak security of these devices and raising the question of responsibility and liability.

Anonymous and New World Hackers using recently released malicious software (malware) called Mirai, created a robot network for the attack. The significant aspect of the attack is the use of the Mirai botnet code to take control of devices that are used on what is called the Internet of Things. These devices are electronic devices not directly connect to computers but are connected through the internet and include such items as webcams, smart TV’s, routers, security cameras, DVRs, and similar devices. By using these electronic devices the hackers were able to take control of a virtual army of attackers. While the multiple attack across multiple directions is considered sophisticated, the actual use of the electronic devices is considered uncomplicated. Many of the compromised electronic devices are used by homes or small business and often lack security capabilities or contain elementary security that is easily compromised. The hackers had little difficulty installing the Mirai malware and taking control of the devices when needed for the attack.

Security organizations are taking measures to identify the comprised devises and developing ways to combat the Mirai command and control system. However, the cost and potential liability for placing unsecured or poorly security protected electronic devices on the Internet of Things is a looming question. If someone or a company experiences a significant loss of money, compromise of data, or destruction of assets; who is liable? Surely the hackers, but are the companies that market poorly or non-secure smart electronic devices; is the person or concern that uses the devices responsible, jointly or wholly? An area of Cyber-law is now in the making.

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

Cell phone video capability is commonplace now, and police in New Jersey are getting used to it. Experts claim that under the First Amendment recording police in plain view is protected. A police officer may not seize a cell phone, delete anything on it, or even demand that the person turn it over to him without a warrant. As long as the person is not truly interfering with a police investigation, they can record as much as they want.

Robert W. Fox, president of the New Jersey State Fraternal Order of Police, stated police should face the fact that cell phone cameras are a reality.  “‘We tell our officers out there . . . that, anything they do, consider themselves being filmed,’” Fox said. “‘No matter where you are anymore, there is some sort of video on the incident – whether it comes from a building camera or an individual cellphone or things like that.’” Arguably, the videos not only protect citizens but also the police from being falsely accused. For most police, video recording should not matter, because they are doing things by the book anyway.

It should be noted that cell phone videos may not capture everything that is taking place during a police encounter. Therefore, rushing to judgment against police would be unfair.

Posted by Jen Suarez.

On April 6th, 2015, Phi Kappa Psi at University of Virginia announced that it is taking legal action against Rolling Stone Magazine for falsely accusing them of gang rape. Columbia Journalism School Review stated the magazine “acted recklessly and defamed the chapter’s members” by publishing this “shock narrative” and as a result the fraternity house has been vandalized. A police investigation was started but was suspended due to lack of evidence after two weeks.

The woman who wrote the article, only identified as “Jackie,” claimed to be the victim of this gang rape. Rolling Stone magazine vowed to analyze their practices and remove the article, which has been viewed by millions, but publisher Jann S. Wenner refused to fire anyone for this obvious case of bad journalism. The fraternity stated, “The reporter in question not only failed to apologize to members of Phi Kappa Psi, but doesn’t even acknowledge the three witnesses she quoted in the article but never interviewed.” This controversy has damaged the school’s reputation, sparked protests, and hurt efforts to fight sexual violence. Rolling Stone Managing Editor, Will Dana, and author, Sabrina Rubin Erdely, have both apologized but the school and fraternity are still waiting for a sincere apology from corporate and for those responsible for this serious fault to be reprimanded.

Libel is the defamation by written or printed words, pictures, spoken words, or gestures. It is also defined as malicious and damaging misrepresentation. We have all seen ignorant comments on the Internet from people all over the world. They say inaccurate and hurtful things because they can hide behind a keyboard and these vicious comments can be very damaging to the reputation of the individual and company. They cry out “Freedom of Speech!” but they aren’t exercising their rights; they are intentionally trying to bring the target into ridicule, hatred, scorn or contempt of others. Defamation is considered a civil wrong and is cause for a lawsuit for damages. In many cases, the target must be able to prove that the statements published were a lie. In this case, however, there is overwhelming lack of evidence and inaccurate information.

Jen is a business administration major with a concentration in management at Montclair State University, Class of 2017.

A New Jersey appellate court recently ruled in James v. Ruiz that testifying experts cannot bolster their opinions by piggybacking or “bootstrapping” the written conclusions of other experts who are not testifying in court.

The Sixth Amendment of the U.S. Constitution protects the right of the accused to confront witnesses against him, thereby excluding hearsay from a case. Hearsay is testimony from a witness who relays information to a jury from a second-hand witness. Hearsay is considered unreliable because the witness who supposedly said the statement is not present in court to be subject to cross-examination.

To illustrate how this works, imagine a case where counsel is trying to prove that Peter was in New York at the time of a robbery. Counsel asks a witness on the stand whether Patrick told him that Peter was in New York in order to place Peter in New York at that time. This is an out-of-court statement made to prove the truth of the matter asserted (that Peter was in New York), and therefore, cannot be cross-examined by opposing counsel because Patrick is not in court. As a result of scenarios like this, rules of court have been crafted to prevent juries from considering hearsay statements in both criminal and civil cases.

Under Federal Rule 703, “an expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed.” New Jersey has adopted Rule 703 and takes a strict view on what constitutes personal observance. For example, while certain medical records can be admitted under the business records exception to the hearsay rule, if those records contain medical opinions regarding a complex medical condition, then under the recent decision in James, they cannot be referenced by a testifying witnesses as a consistent (or non-consistent) opinion to his opinion, unless the testifying expert relied on those opinions for his or her own “personal” findings. The witnesses relied upon must be testifying as well. Therefore, simply rubber-stamping one’s own opinion based on a non-testifying expert’s opinion, is bootstrapping and violative of Rule 703.

Together with the business records exception and Rule 703, New Jersey also has Rule 808, which has no federal analog. Under N.J.R.E. 808:

Expert opinion which is included in an admissible hearsay statement shall be excluded if the declarant has not been produced as a witness unless the trial judge finds that the circumstances involved in rendering the opinion, including the motive, duty, and interest of the declarant, whether litigation was contemplated by the declarant, the complexity of the subject matter, and the likelihood of accuracy of the opinion, tend to establish its trustworthiness.

Thus, there are times when a non-testifying expert’s opinion can be permitted, but the trial judge must evaluate the expert’s motives, duty, and interest in giving the opinion; whether they had litigation in mind at the time of the opinion; the complexity of the subject matter; and whether the opinion is accurate. If the opinion regards something that is complex and contested in the lawsuit, the opinion will not be permitted under Rule 808. If it is an uncontested opinion or something insignificant, then it will more than likely be admitted.

There is a line drawn between facts and data, which any expert can discuss, provided that they are relied upon by other experts in the field, and expert opinions. And again, non-testifying expert opinions cannot be admitted unless the testifying expert relied upon those opinions in his analysis of the case and will be testifying. According to the court, “[i]f the requirements of Rule 808 are met, and a testifying expert has reasonably relied upon the non-testifying expert’s opinions, then the testifying expert may be permitted to refer to that absent expert’s opinions in the course of explaining his or her own opinions in court.”  The court continued: “However, this pathway should not be used as a ‘subterfuge to allow an expert to bolster the expert testimony by reference to other opinions of experts not testifying.’”

The bottom line is testifying experts cannot be used as a conduit to admit non-testifying expert testimony. This applies especially to bootstrapping “net opinions” in this manner. In addition to the constitutional issues raised here, doing so is simply unfair. If a plaintiff has an expert who is testifying against the defendant’s expert with an opposite opinion, then permitting the bootstrapping of a non-expert’s opinion is like having two experts against one in front of the jury for the price of one.

Posted by Abdullah Aljammaz.

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

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

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

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

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

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

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

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

Source:

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

Posted by Barkimba Diallo.

In the last few months, a federal investigation has helped yield numbers of guilty pleas in South Jersey. A firefighter in Atlantic City, a Margate doctor, two local pharmaceutical representatives and six others admitted fraud of more than $25 million.  The number of convictions is expected to go up due to court documents showing that more than $50 million was paid to one compounding pharmacy. According to the article, this is a minor fraud case compare to the trial of Senator Bob Menendez where a Florida eye doctor Salomon Melgen abetted by Senate Majority Leader Harry Reid was convicted of Medicare fraud for more than $100 million in five years. Sen. Bob Menendez and Harry Reid allegedly contacted former Health and Human Services Secretary Kathleen Sebelius for advice on the trial and She replies in the negative.

Marc Pfeiffe, of the Bloustein Local Government Research Center at Rutgers University, said that “New Jersey’s $2.5 billion State Health Benefits Plan’s generosity presents opportunities for fraud.” He also added that the $25 million fraud represents just a smidge of what really goes on. Public servants involved in the crime do not fear the consequences of their actions as they are aware that the malaise is deep rooted.

Marc Pfeiffer, of the Bloustein Local Government Research Center at Rutgers University, said that fraud is the big reason why we don’t have fair competition among health providers because the choice of beneficiaries is done based on who gives the most kickbacks. He concluded that we should imbibe the best practices in the private sector if we want to root out corruption.

Barkimba is a graduate student at the Felicano School of Business, Montclair State University.

Source:

http://www.pressofatlanticcity.com/news/breaking/our-view-corruption-cases-show-health-benefits-fraud-out-of/article_04e17d37-7eec-564a-b7c2-623e260d7a00.htmlLinks to an external site.

Posted by Shaiban Almarri.

Wilmington Trust Corp. has agreed to pay $60 million to the government after facing charges relating to the bailout program of the federal bank. This agreement incorporates a civil forfeiture of $16 million and $44 million that the bank had paid to the Securities and Exchange Commission in an earlier but similar lawsuit. The court postponed the anticipated trial until March after the acting U.S. Attorney David Weiss said his office had agreed to dismiss the case against the bank.

Mr. Weiss said the bank had accepted the responsibility of its actions despite having refused to admit liability. Meanwhile, the bank’s parent company M&T Bank asserted that it was in the bank’s best interest to resolve the matter.

Wilmington Trust had been accused of dishonesty regarding its “…deteriorating commercial real estate portfolio from investors, bank regulators, and the Securities and Exchange Commission.” Consequently, some members of its former top management will be answering charges of conspiracy and fraud. Meanwhile, a number of the bank’s employees have already pleaded guilty while a section of them have even been sentenced.

A government affidavit referenced in the court revealed how a top official fraudulently got money from Wilmington Trust to be used for personal activities. Furthermore, the bank failed to explain why it used to “waive” mature loans that had been specified as current for interest, a practice that was later found to have hidden around $333 from the previous due loans.

Shaiban is an MS Accounting student at Feliciano School of Business, Montclair State University, Class of 2017.

Work Cited

“Wilmington Trust Reaches $60M Settlement with Prosecutors.” CNBC. Np. 2017. Web. 17 Oct. 2017.

https://www.cnbc.com/2017/10/10/the-associated-press-wilmington-trust-reaches-60m-settlement-with-prosecutors.html

Posted by Abdullah Aldahmash.

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

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

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

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

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

References:

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

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

Posted by Chelsea Macchione.

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

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

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

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

Posted by Monika Lipowska-Flis.

In article “PWC Lawsuit Tests Whether Auditors Must Guarantee Against Fraud,” the trial will determine if the one of the big four companies will survive or vanish from the market. PricewaterhouseCoopers (PWC) is being sued by Federal Deposit Insurance Corp. for 2.5 billion in losses suffered from collapse of Colonial Bank. According to the lawsuit, the fraud was perpetrated by the former chairman of Taylor Bean & Whitaker, the biggest mortgage customer of Colonial bank, and also by top executives from the bank. As we read in the article, the fraud was undetected by PWC, internal auditors, state and federal banking regulators and also by a forensic audit accounting company.

PWC defense is using pari delicto doctrine. It is “a descriptive phrase that indicates that parties involved in an action are equally culpable for a wrong. When the parties to a legal controversy are in pari delicto, neither can obtain affirmative relief from the court, since both are at equal fault or of equal guilt. They will remain in the same situation they were in prior to the commencement of the action.” PCW is also arguing Alabama’s “contributory negligence,” stating that Federal Deposit Insurance Corp. was also negligent in discovering the fraud at Colonial Bank. “The failure of the bank had nothing to do with auditing or accounting,” according to legal counsel representing PCW. “The bank had its own failed strategies that over time caused it to suffer and fall apart.”

Judge Rothenstein’s position is that PCW had the opportunity and means to detect the fraud if they properly conduct the audit they were hired to do. All defenses submitted by the audit company has been rejected by the judge, stating that they were negligent and responsible for bankruptcy of the bank.

Under SAS No. 99, “The auditor has a responsibility to plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether caused by error or fraud.” This new standard provides guidelines how to design the audit and assess risk of fraud that could occur. Exercising personal skepticism by the auditor is the most important factor. There were red flags observed during various audits and all of them were ignored and not considered by PWC personnel.

Detecting fraud is very hard because the higher-up executives are usually involved and they have the means to override internal controls and hide it successfully. Knowing this, the auditor should keep open mind and if any irregularities uncovered they should be investigated thoroughly. Due diligence is the best defense to every audit firm from being sued for not detecting fraud during audit. It is the company’s responsibility to design sufficient internal controls that will prevent the fraud in the first place. PWC if found guilty will follow steps of Arthur Anderson who went bankrupt after Enron scandal.

The money lost will not be recovered and lives of thousands of people damaged never repaired.

Sources:

https://www.forbes.com/sites/legalnewsline/2017/09/18/pwc-lawsuit-tests-whether-auditors-must-guarantee-against-fraud/#5cd7b84a5fbe

Definition for Pari Delicto:

https://legal-dictionary.thefreedictionary.com/In+Pari+Delicto

Due to today’s technology, we have advanced into an era where information, computing, and interaction can all be done with a click of a button. A plethora of tasks can now be completed within a matter of seconds. Though this thought may sound great at first, there can also be many negatives associated with it. Unfortunately, the world that we live in is far from a utopia. As a result, many individuals use their knowledge in efforts to create evil rather than for the good of others. In her article, Madison Marriage explains how Deloitte was recently hit with a cyber-attack, the hardships the Big-Four company encountered while attempting to resolve the issue, and the lessons learned from the situation in order to prevent catastrophes like this from happening in the future.

To begin, it is important to understand the background of the company that experienced this cyber-attack. Deloitte is an incorporated multinational professional services firm with operational headquarters located in New York City in the United States. Deloitte is one of the “Big Four” accounting firms and possesses the largest professional services network in the world by revenue and number of professionals. Deloitte provides audit, tax, consulting, enterprise risk and financial advisory services with more than 263,900 professionals globally. As of 2016, Deloitte is classified as the sixth largest privately-owned organization in the United States. Based on this information, it can be concluded that Deloitte is a great target for hackers due to the value of information that the company carries within the firm. Unfortunately, earlier this year, they were contacted by governmental authorities in regards to a breach of information that was leaked, tarnishing the reputation of what is supposed to be a provider of excellent cyber security advice. Despite the irony of this, the attack was described by Deloitte as a “cyber incident” and was first reported by the Guardian newspaper, as a low blow due to the fact that security advice to large companies is one of Deloitte’s fastest-growing revenue streams.

In fact, in the month this took place, the accounting firm posted record global revenue of thirty-nine billion dollars saying that the cyberattack only affected a few clients. They also stated that the attack had “no disruption had occurred to client businesses, to Deloitte’s ability to continue to service clients, or to consumers”. Despite this, Deloitte had to act quickly and adapt to the situation. As a result, once the news was present, they mobilized a team of security and confidentiality experts inside and outside of Deloitte, contacting governmental authorities and immediately contacting all clients that were affected.

Overall, it is evident that companies as well as individuals who perform these tasks day in and day out are not safe from attacks. Unfortunately, Deloitte was a firm that had to learn this the hard way. Fortunately though, Deloitte had the manpower, knowledge, and funds to protect itself and was able to mend this issue before it spiraled out of control. In the future, I believe that Deloitte should have constant routine updates and checks-ins in order to prevent this type of data breach from occurring again. They should also have password changes every month or so in order to make it harder for hackers to get a hold of their private information. All in all, the firm had a statement that was released at the end of this fiasco to sum up the cyber-attack, “Deloitte remains deeply committed to ensuring that its cyber-security defenses are best in class, to investing heavily in protecting confidential information and continually reviewing and enhancing cyber security.”

Michael is an MBA student with a concentration in accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Work Cited:

https://www.ft.com/content/7c52fe88-7bf1-3798-9d55-2d5498b53c20

Marriage, Mary. “Subscribe to Read.” Financial Times, 25 Sept. 2017, www.ft.com/content/7c52fe88-

7bf1-3798-9d55-2d5498b53c20.

Posted by Diego Henao.

During vior dire, potential expert witnesses’ credibility and expertise is assessed to arrive at a decision if they are properly qualified to give their opinion in court. In the State of Utah, Judge Paul Parker has disqualified Gil Miller, a forensic accountant, from taking the stand as an expert witness for the prosecution team in the criminal trial against father and son, Wendell and Allen Jacobson, and their company Management Solutions Inc. This decision came about after the Jacobson’s attorney’s presented their argument that Gil Miller had a conflict of interest due to his previous professional involvement with the Jacobson’s and their legal team.

Miller participated in the defense of the Jacobson’s and their company in the December 2011 trial in which the SEC sued them for allegedly running a Ponzi scheme involving the purchasing and selling of apartment buildings. Miller’s role in this case consisted of being the accountant for the Jacobson’s attorneys, and because of this, he participated in the analysis of private information, and therefore, he should not be allowed to participate as an expert witness for the prosecution in the current trial. This was the argument that the Jacobson’s legal team brought to the attention of Judge Parker; they also mentioned how Miller was exposed to private documents, legal theories, and information and this should discredit his qualification, since he would now be on the opposing side helping the prosecution against the Jacobsons. The lawyer for Allen Jacobson, Amanda Mendenhall, argued that “ (Attorneys) must be able to rely on the confidentiality of the consultants they hire to assist in providing legal services to their clients. Without these protections it is scary to think an expert could be privy to critical defense strategy and then turn around and deliver the information to a prosecuting agency” (Harvey). The Jacobson’s attorneys also stated how during that SEC trial, Miller had provided their legal team with false information in regards to the work he had conducted.

Aside from wanting Miller to not participate in the case, the defense attorneys also argued that since Miller had already been in contact with the prosecutors, and therefore, had offered some sort of insight, he had “tainted” the case, and therefore, they demanded that the prosecution team be removed and replaced from this case. If Judge Parker would agree to this second demand, then the prosecution would be able to appeal this decision. The judge’s decision to disqualify Miller as an expert witness remained and concluded with the fact that he could not participate as an expert, but that he could still be a witness in regards to the facts of the case. This trial, which accuses the Jacobson’s of 16 felony fraud involved counts of failing to inform investors about how their investments were being managed is still yet to be scheduled.

Diego is a graduate accounting student at the Feliciano School of Business, Montclair State University, Class of 2018.

Works Cited:

Harvey, Tom. “Judge Says Prominent Forensic Accountant Can’t Be Expert Witness in Fraud Case Because of Conflict.” The Salt Lake Tribune. N.p., 19 Sept. 2017. Web.

http://www.sltrib.com/pb/news/business/2017/09/19/judge-says-prominent-forensic-accountant-cant-be-expert-witness-in-fraud-case-because-of-conflict

Posted by Bader Alotaibi.

Murray R. Spies was found guilty of attempting to dodge income tax. The case turned on the determination of the exact sum of tax and how to collect and manage accounts and revenues.

“Petitioner admitted at the opening of the trial that he had sufficient income during the year in question to place him under a statutory duty to file a return and to pay a tax, and that he failed to do either.” The government sought to show Spies committed tax evasion. Petitioner testified as to his good personality, his illness at the period he filed his return and the lack of will, mainly because of mental disturbance, which signified something more than anxiety, but less than madness. At his trial, Spies asked for this instruction: “You cannot conclude that the Defendant is shamefaced of a considered attempt to defeat and avoid income tax if you discover that Murray R. Spies has not intentionally rendered taxable returns and has willingly unsuccessful to pay income taxes on that earnings.”

The Court reversed holding, “[W]e think a defendant is entitled to a charge which will point out the necessity for such an inference of willful attempt to defeat or evade tax from some proof in the case other than that necessary to make out the misdemeanors, and if the evidence fails to afford such an inference, the defendant should be acquitted.”

Bader is an MBA student at the Feliciano School of Business, Montclair State University.

Work cited

https://supreme.justia.com/cases/federal/us/317/492/case.html

Introduction

Tax evasion is the practice of deliberately failing in an individual, corporate or trust’s obligations to remit their correct and due tax liability. The same can culminate into a criminal offense whose elements may require proof of omission or misinterpretation in the remittance or declaration of the correct tax position of the persons indicated above.

The article reviewed herein is “HMRC empowered to name and shame tax evasion ‘enablers,‘” an article done by Jessica Elgot in the Guardian newspaper on the 1st of January, 2017. The article, in essence, alludes to the directive given by the government, mandating the HMRC to target not only the evaders of tax obligations but also the parties who assist with the technical expertise to help the former in evading their obligations.

Review

The article begins with a commentary on the directive, indicating the punitive measures due to the parties that will be found culpable of enabling the crime. The penalty was placed on an amount of $3,000 or the amount they assisted the corporate or individual to evade, whichever amount is higher. The offense created, according to the article, will also encompass the omission to prevent an act of tax evasion. Though broad, the spectrum promises to have a deterrent effect on the players involved in the crime.

Further, the article goes ahead to speak to the future moves that the agencies anticipate about vanquishing the offense. The same entails reparative justice, which involves going after the offenders who have previously participated in the evasion of tax obligations. This final directive might encounter technicality issues due to the principle that laws do not operate retrospectively. However, considering the gravity of the offenses in question, the players, just like other law-abiding citizens, owe a duty to faithfully and honestly remit their taxes.

Source:

https://www.theguardian.com/business/2017/jan/01/hmrc-tax-evasion-enablers-fines

President Trump blocked the impending merger between Singapore-based, Broadcom, and U.S.-based, Qualcomm, over concerns that it would affect national security. The Committee on Foreign Investment in the United States investigated “the national security implications of the deal last week over concerns that it would hamper U.S. efforts to develop 5G wireless networks and other emerging technologies. CFIUS on Monday recommended that the president veto the deal.”

The President cited “‘credible’” evidence of risk to our national security. We would lose a company with the ingenuity and technology to build the next-generation of wireless networks.

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 Sam Battista.

I came across this article recently about these topics that were brought up in class, and I thought it was appropriate to write a blog pertaining to this article. Seven reputable members of the Geneovese crime family were recently arrested on accounts of money laundering and racketeering. The group allegedly raked in millions of dollars through the Garden State by gambling, loansharking, and unlicensed check cashing. Most of these charges fall under the RICO laws because this is organized crime.

The group ran a massive loansharking operation, which generated about 1.3 million dollars in interest a year. It operated an offshore Costa Rica Gambling website and an unlicensed check cashing business, making over nine million in fees over a four year run. The group also laundered $660,000 dollars in drug money out of a Florida based check cashing entity. The group also gave out multimillion dollar loans with interest rates upwards of 156 percent. In addition, the group ran a illegal check cashing business out of a restaurant in Newark that cashed-in over 400 million dollars.

All of these violations are prohibited in the RICO laws and are considered organized crime. Most of the acts committed were covered or ran out of legitimate businesses. These individuals were all from New Jersey and are currently being prosecuted for their federal violations. People often think these type of crimes only happen in movies, but the truth is it’s a multimillion dollar business with violations happening everyday.

Sam is a business administration major with a concentration in real estate at Montclair State University, Class of 2016.

Posted by Anthony Leineweber.

The coal business just isn’t what it used to be and some companies are finding that out the hard way.  Most recently, it was Bumi, “Asias most-indebted coal miner,” that had to bite the bullet and file for creditor protection here in the U.S. “Bumi Investment Pte Ltd listed assets and debt of as much as $1 billion each in Chapter 15 papers filed today in U.S. Bankruptcy Court in Manhattan.” Chapter 15 bankruptcy is fairly new as of 2005 and deals with problems like debt and the control of certain assets involving more than one country. “Companies use Chapter 15 of the Bankruptcy Code to fend off creditor claims in the U.S. while they reorganize their finances elsewhere.”

“Bumi Investment and Jakarta-based Bumi Resources failed to make a coupon payment on $700 million of October 2017 notes last month, following a 30-day grace period.” Clearly, they are in serious trouble after not being able to get the money together even after being granted a 30 day grace period. About a week ago, the Singapore court disallowed any action or continuation by creditors for six months. “The court-obtained moratorium marks another chapter in efforts to contain the fallout in their mainstay coal business. Coal prices have slumped more than 50 percent since the end of 2010.”

Anthony is a marketing major at Montclair State University, Class of 2016.

Posted by Anthony Leineweber.

$167 million dollars sure is a lot of money, and that’s exactly what Decura investment firm is looking for from UBS’s investment bank. Decura claims their investment firm was not told about UBS’s future plans to downsize before agreeing to a contract with them in 2012. UBS “is not the bank with which Decura contracted on May 31, 2012,” Decura said in the documents. UBS calls their downsizing part of “project accelerate” and that their production and business standing has not and will not be affected in any way.

The reason for downsizing, according to UBS’s CEO Sergio Ermotti, is to “focus on money management while cutting costs to boost profits.” Clearly, Decura investment firm isn’t happy about that. They claim the cuts “mean the bank isn’t able to market its algorithmic trading and hedge fund products, triggering a termination clause in the contract.”

We’ll see how it all plays out, but it looks like these two sides aren’t coming to an agreement anytime soon.

Anthony is a marketing major at Montclair State University, Class of 2016.

Posted by Nicholas Andreula.

Three major U.S firms along with one German company are currently being investigated for possible price manipulation. “Goldman Sachs Group Inc., HSBC Holdings PLC, Standard Bank Group Ltd. and a German chemical maker” are being accused of working together in “manipulating platinum and palladium prices.” It is believed that this price manipulation has been going on for many years and has had a considerable impact on investors and individuals within the industry.

“Modern Settings filed the suit as a class action on Tuesday,” with what the firm believes to be substantial evidence in support of the case. This incident has caused a great deal of speculation regarding “price rigging” both within and in other unrelated industries. Companies such as Modern Settings are requesting the implementation of regulations to prevent similar incidences from happening in the future.

The firms involved have “refused to comment on the lawsuit when contacted by the Wall Street Journal.” Although the case has initiated the investigation of price manipulation within the industry, many believe that the “the changes have come too late.”

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

Posted by Nicholas Andreula.

In recent months, a Toyoko-based airbag manufacturer, Takata, has been under fire with a multitude of lawsuits. Complaints of the malfunctioning airbags first began in 2010 when a woman was seriously injured after “shrapnel allegedly flew from one of the safety devices during the blast that inflated them.” Since then, an increasing amount of incidents involving the defected products have been reported and investigated. Due to many injuries and even some deaths, numerous individual suits and a “class-action suit in Florida against Takata and automakers including Honda, BMW, Nissan, and Toyota” have been filed.

A substantial amount of automakers have installed the defective airbags in vehicles, resulting in recalls on over “7.8 million cars in the U.S.” Owners of recalled vehicle models are being urged not to operate vehicles until the defected devices are either disabled or replaced. Takata and various auto manufacturers are currently facing a great deal of impending charges based on the recent incidents involving the devices.

In the past, Takata has been recognized for many important contributions to automobile safety by the “NHTSA, the top U.S. auto-safety regulator.” Due to the current and the possibility of future lawsuits, widespread fear for the company’s financial well-being has caused the company’s shares to fall “about 50 percent so far this year, as news of the injuries and the $413 million charge it took this summer.” Currently the issues regarding the device malfunction are being fully investigated by Takata, automakers, and the “U.S Department of Transportation.”

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

Posted by Tiffany Zapata.

Sergei Pugachyov former banker, senator, and confidante to Valdimir Putin is now speaking out on his placement on Interpol’s most wanted list. According to Pugachov, he made the list because of a campaign created by elite Russian politicians against him. He is currently facing charges in Russia and the UK due to the 2010 collapse of the International Industrial Bank.

Pugachyov commented on Interpol’s activity, stating “Interpol’s involvement is illegal and he’ll explore ‘all avenues’ to fight to get his name removed.” He was listed on the international law enforcement agency’s roster and is being charged with counts of embezzlement, according to Interpol.

In attempts to prove his innocence, Pugachyov is trying to bring light to the situation and call-out Russian politicians. He stated: “The involvement of Interpol by the Russian authorities is an attempt to give credibility to the actions of high-level Russian officials involved in the expropriation, including direct orders of President Putin and a number of Russian cabinet ministers.”

He was subject to a red notice by Interpol but was able to cancel it by challenging it in court. He is determined and says he will do anything in his power to cancel the second notice as well.

Pugachyov was once known as one of the richest men in Russia. He now lives a bare life, stripped of all his assets and politically targeted in Russia due to the collapse of the bank in 2010. With the history of Russian governments, we can speculate this will not end well for Pugachyov.

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

The European ATM Security Team (EAST) discovered that ATM hackers are now drilling holes in ATM machines near the card reader and installing electronic devices which tap into the “read head” of the magnetic strip reader to steal information.  Normally, thieves would “skim” the information on the magnetic strip through an “overlay” device that would actually read the magnetic strip outside the machine when an unwary customer would insert his or her card.

Instead, these new devices work like a wiretap inside the machine and read the information as it passes through the head of the reader.  The hole is then covered up with a decal after the device is removed with the stolen data.  EAST still classifies the crime as “skimming” even though “‘the the magnetic stripe [on the customer/victim’s card] is not directly skimmed as the data is intercepted.’”

Cameras are still used by thieves to steal PIN numbers; therefore, EAST suggests customers cover the keypad with their hand before entering their PIN.

Posted by Genna Salvtoriello.

General Motors has been hit with a $3 billion dollar lawsuit by the state of Arizona. The lawsuit is due to a record number of 2.6 million vehicles this spring that have been claimed to be linked to safety defects such as a faulty ignition switch. This defect has been linked to 33 deaths and more injuries according to Kenneth Feinberg, who is looking after compensation to the victims of this defect and the damage that it has caused. Arizona’s lawsuit is focusing on the loss of value GM car owners have suffered due to the now damaged reputation of the “General Motors” name. The law that Arizona is suing General Motor’s under is a consumer fraud law that has a maximum penalty of $10,000. And that’s just for each individual violation. There are about 300,000 GM vehicles that are registered in the state of Arizona. Which means a judge could fine General Motors up to $3 billion dollar, according to a report in the New York Times.

However, the ignition doesn’t seem to be the only issue with GM cars. The lawsuit that Arizona is pending shows not just one, but multiple defects with the GM vehicles. These defects include seat belts, brake lights, airbags and transmission cables. The GM vehicles have dropped significantly in value because of the safety defects, which has cost those car owners to lose thousands of dollars. “GM is committed to setting a new industry standard for safety, quality and excellence. This includes recalling vehicles proactively when we identify a safety issue,” said spokesman James Cain. GM is also under investigation by the U.S. attorney in New York, congressional committees, and the National Highway Traffic Safety Administration. The number of claimants is rising for GM who is running a compensation program. The company is allowing potential victims of this recall over faulty ignition switches an extra month to file claims seeking compensation. It will be clear in the near future to see just how many people have been put at risk, or even worse, actually hurt by this life threatening recall.

Genna is a marketing major at Montclair State University, Class of 2017.

Posted by Genna Salvatoriello.

Target has come up with a brilliant way to not only give their shoppers good deals on Black Friday, but to make them come back wanting more. Target offered 10% off of its gift cards on Black Friday, which will help bring shoppers back. Target also revealed certain deals that will get its customers out of their homes and into the store. Some of these deals Target is offering include $50 off Beats headphones and $10 off an Apple TV. The catch is that it only applies if customers order online, and them pick these items up at the store. They also announced that their mobile app will offer 50% off a different toy each day throughout the holiday season.

After the data breach that compromised millions of customer accounts last holiday season, Target is hoping that these promotions will encourage more customers to shop with them. Target has made the right move with creating these promotions, especially because online shopping growth is expected to far outpace in-store growth this year. The National Retail federation projects that in-store sales will climb by 4.1%, while online sales will jump between 8% and 11%. Hopefully this will not be the case for Target, as they do their best to encourage customers back into their stores.

Genna is a marketing major at Montclair State University, Class of 2017.

Posted by Zhan’e Shaw.

Iknoor Singh, a Sikh student at Hofstra University, filed a lawsuit against the United States Army, claiming “the service refused to grant him a religious accommodation that would allow him to enlist in his school’s ROTC program without shaving his beard, cutting his hair and removing his turban.” The Army denied Iknoor Singh’s request for a religious exemption from the military’s grooming policies when he enlisted as a cadet on the grounds the exemption would have “’an adverse impact on the Army’s readiness, unit cohesion, standards, health, safety, or discipline.’”

The Army later stated Singh could seek an exemption only after he was enlisted as a cadet, “creating a reef in which Singh would have to violate his faith to be able to apply for a religious accommodation.” Singh stated “’I couldn’t believe the military was asking me to make the impossible decision of choosing between the country I love and my faith.’”

The ACLU and United Sikhs filed the suit on Singh’s behalf claiming the “Army’s denial of religious exemption violated the Religious Freedom Restoration Act.” In a statement, Hofstra said it “’entirely supports Mr. Singh’s ambitions to serve his country. He is currently enrolled in the ROTC class and we are providing him leadership training to the extent that the U.S Army has allowed.’”

In September 2014, the Army adjusted it’s grooming policies to allow female soldiers “to wear braids, cornrows,” and twists in their hair resulting from public complaints. The case is still ongoing.

Zhan’e is a business management major at Montclair State University, Class of 2016.

President Trump blocked the impending merger between Singapore-based, Broadcom, and U.S.-based, Qualcomm, over concerns that it would affect national security. The Committee on Foreign Investment in the United States investigated “the national security implications of the deal last week over concerns that it would hamper U.S. efforts to develop 5G wireless networks and other emerging technologies. CFIUS on Monday recommended that the president veto the deal.”

The President cited “‘credible’” evidence of risk to our national security. We would lose a company with the ingenuity and technology to build the next-generation of wireless networks.

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 Philip D Lacki.

‘The lid popped off”? How does a lid pop off without someone doing something to cause it to pop off? Just like the Liebeck v McDonald’s case, I find this case involving someone suing Starbucks for a faulty lid to be morally wrong in the sense of business law. “The stress activated [the plaintiff’s] Crohn’s disease, and as a result, he lost part of his intestine. He claims damages of $50,000. His wife also sued for loss of companionship.”

The eggshell skull rule is a well-established legal doctrine used in some tort law systems. It means that saying the injured person is frail is not a defense in a tort case.

In class, we discussed the McDonalds case and looked into the case. When do ends justify the means? In my discussion post about the video, we watched the video about the case and talked about how one may use bad or immoral methods as long as you accomplish something good by using them. (Not everyone agrees with this idea). The man suing Starbucks for $50,000 used immoral methods to accomplish something bad.

In class, we also discussed the Gucci case where a person in China was selling counterfeit Gucci products and selling them online. Gucci, who realized what was happening, notified the person in China without getting a response. The man in China was using immoral methods to accomplish something bad, and though it might be a bit extreme to compare, you can see how these two cases have similarities in both business and legal aspects.

Philip is a public relations major with a minor is business administration at Seton Hall University, Class of 2017.

Posted by Briana Encarnacion.

The articles by CBS News, USA Today, and Time Magazine below all discuss a case between a woman named Cynthia Robinson and R.J. Reynolds Tobacco Co., a cigarette making company. Ms. Robinson had filed suit against R.J. Reynolds on behalf of her husband, Michael Johnson, Sr., who passed away in 1996 due to lung cancer. According to Time Magazine, “Johnson got hooked on cigarettes when he was just 13-years-old, and eventually smoked up to three packs a day.” The article goes on to demonstrate how truly addicted Mr. Johnson was to cigarettes by quoting his wife, “When you’re on oxygen and you have to step outside for a cigarette, you can’t stop. You’re addicted.” So it was clear that Mr. Johnson was addicted to cigarettes and that is why he developed lung cancer, but the question was, how exactly was R.J. Reynolds to blame?

In an article published in USAToday, Christopher Chestnut, an attorney for Ms. Robinson, was quoted stating, “The environment today is completely different than it was in the ’50s and ’60s, when Ms. Robinson’s husband was alive . . . Reynolds knew its product was addictive, but it didn’t market it correctly. The company lied and marketed cigarettes as safe, yet they contained countless harmful chemicals.” This statement alone tells us who was to blame. It was R.J. Reynolds. Had the company been more transparent as opposed to intentionally hiding the negative effects of smoking their cigarettes, the punitive damages would have never been so great. However, because they intended to make profits by lying to their customers and causing harm to them in the process, punitive damages were granted to Ms. Robinson.

Time Magazine quotes Willie E. Gary, another attorney of Ms. Robinson, stating, “We expected every dime and more . . . Johnson started smoking when he was a teen. How aware of the risks can you be at that age? But [the tobacco industry] would market and target kids. To this day they are going after our youth, stuffing their pockets. It’s all about the profits and it’s nothing about the health and safety of the people.” This is exactly right. From what I have learned through studying business law, the ends do not necessarily justify the means, an idea conveyed in the principle of “double effect;” it is all about the intent. However, the means do in fact justify the end and in this case, R.J. Reynolds did not have good intentions. As Gary stated, they were focused solely on profit. Their goal was to make money by selling cigarettes that were addictive and contained harsh chemicals known to cause cancer. They knew that by targeting the youth and hiding the reality that their cigarettes could cause cancer, they would attain a market large enough to bring in a great deal of revenue. They failed to consider the long-run effects of this decision and in the end it came back to haunt them. Ms. Robinson and her son were awarded $7,302,625 and $9,591,208 in compensatory damages, respectively, and not to mention the $23,623,718,906.62 in punitive damages, according to cvn.com.

Still, as stressed in the article published by CBS News, the money was not what was important to Ms. Robinson and her family. What was important was that the tobacco industry learn their lesson and stop targeting the youth. Ms. Robinson’s attorney Gary stated, “The lawsuit’s goal was to stop tobacco companies from targeting children and young people with their advertising. . . If we don’t get a dime, that’s OK, if we can make a difference and save some lives” (CBS News). It was clear that although punitive damages might have been seen as overly excessive by the tobacco industry, especially R.J. Reynolds themselves, that was not the goal of Ms. Robinson. It was merely an added bonus to doing what was right on behalf of her husband.

This case is a great example of the theory of double effect and a good one to study when it comes to the debate on whether or not punitive damages should have a cap. Opinions will vary of course, however, it is interesting to study cases such as these and decide on your own whether or not you agree with the verdict.

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

Sources:

http://www.usatoday.com/story/money/business/2014/07/19/jury-hits-rj-reynolds-with-23b-verdict/12887315/
http://time.com/3016961/23-6-billion-lawsuit-winner-to-big-tobacco-are-you-awake-now/
http://www.cbsnews.com/news/r-j-reynolds-tobacco-hit-for-billions-in-michael-johnson-sr-lawsuit/
http://cvn.com/proceedings/cynthia-robinson-v-rj-reynolds-tobacco-company-et-al-trial-2014-03-03

Posted by Dana Domenick

Takeda Pharmaceutical Company is Asia’s largest pharmaceutical company and one of the most successful in the world. In the late 1990s, Takeda globally released an antidiabetic drug known as Actos. According to the FDA, the purpose of pioglitazone, the generic name for Actos, is to “improve control of blood sugar in adults with type 2 diabetes mellitus” (fda.gov).

Eli Lilly and Company is an American pharmaceutical company based in Indianapolis, Indiana. Takeda entered a partnership with Eli Lilly in which the American company would market Actos in the United States. In 2011, a New York resident, Terrance Allen and his wife filed a suit against Eli Lilly and Takeda claiming that the drug caused Terrance Allen to develop bladder cancer. The defendant had evidence to prove that the company failed to warn that Actos increases the risk of cancer. The trial took place in Lafayette, Louisiana. The jury sided with the plaintiff and awarded $9 billion in punitive damages. Lilly had to pay $3 billion while Takeda had to pay $6 billion. Both drug companies appealed the verdict and the damages were slashed to $36.8 million.

This suit was just one of the almost 9,000 pending claims toward Takeda made by Americans who had used the drug. All litigants argued that the company failed to warn them that use of the drug heightened their risk of cancer. In April 2014, the Japanese pharmaceutical company came to a settlement of $2.4 billion to cover the damages in all of the suits and costs against them in the United States. According to the New York Times, the damages given to each plaintiff will vary depending on individual factors including the amount of drug consumed and each individual’s physiological history (Andrew Pollack). According to Business Insider, Takeda expressed that the company is not concerned about the large settlement and they will continue to sell the drug.

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

Sources:

http://www.nytimes.com/2014/04/09/business/international/japanese-drug-maker-ordered-to-pay-6-billion-over-cancer-claims.html http://www.fda.gov/Drugs/DrugSafety/PostmarketDrugSafetyInformationforPatientsandProviders/ucm109136.htm

http://www.businessinsider.com/afp-takeda-warns-of-loss-after–2.4-bn-diabetes-drug-settlements-2015-4

Posted by Rilind Dauti.

$18 billion in goods alone in 2004. Every supplier wants to make deals with the inventory giant, Wal-Mart. To keep the deals going for the prices,Wal-Mart wants to negotiate, and these suppliers are forced to cut their costs (pay their workers less), in order to keep their contracts with Wal-Mart.

It doesn’t stop at the low wages. Wal-Mart’s healthcare plan has one of the lowest premiums, ranging from $9 to $27 dollars per pay period. What they don’t tell you is that there is a $5,000 annual out-of-pocket fee. If workers make an average of $20,000, the fee is approximately ¼ of an employee’s salary. Employees are forced to take advantage of government-funded programs like Medicaid. This insurance is covered by taxpayers, so taxpayers are forced to spend their money on Wal-Mart employees.

So what does this mean? Wal-Mart is where it is now because of their low wages, worker exploitation, and inadequate healthcare for its employees so that they can guarantee you their lowest prices. Their prices are low because of the unethical practices enforced by their CEO and higher officials in the corporation.

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

Posted by Michael Habib.

A growing and popular phenomenon in the U.S. is fantasy football. A person reported by The New York Times won $350,000 on FanDuel in a contest. There are two companies that dominate the fantasy football market: FanDuel and DraftKings. “The two companies together enjoy 95% market share of the daily-fantasy industry, have come under the harsh light of regulatory scrutiny, with investigations launched by the New York State Attorney General and the FBI,” according to Daniel Roberts. Both of these companies ecently have been banned in the State of Nevada. The State of Nevada Gaming Control Board ruled that all unlicensed daily fantasy sports companies must cease and desist in the state. It is very ironic in the state with the largest gambling industry shuts down two major fantasy football companies.

Many argue that fantasy football is not gambling, but more skill. Nevada labels it as gambling and not a game of skill; now these companies need to obtain a gambling license to continue to do business in Nevada. Companies such as Draftpot, StarsDraft and even Yahoo’s daily fantasy football also now needs to obtain the gambling licenses. However, other state’s laws differ on the definition of gambling. In “Kansas a contest must prove only that it involves more skill than change.” In “Tennessee and Arkansas, the contest must prove it involved no change and all skill.” Currently, these companies operate in 44 states. Since some state laws are unfriendly to the gambling business, it affects fantasy football drastically. FanDuel and DrafitKings stated that this will only be a growing problem, however they will fight to have everybody back to enjoying the contest.

Michael is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2017.

Posted by Michael Habib.

Many people today always hear about the search warrant and are police required to have probable cause to search a suspect’s cell phone. Recently, a case was heard in the Supreme Court regarding a robbery and police accessing information from the cell phone carriers that lead to Mr. Quartavious Davis’s arrest in Florida. Mr. Davis was convicted of a string of robberies in 2010 and was sentenced to approximately 162 years in prison, without parole. Mr. Davis challenged and argued that police did not access a search warrant when seeking information from his cellphone carrier MetroPCS Communications Inc. The information provided resulted and provided evidence of the approximate location of Mr. Davis during the time of the string of robberies. According to Lawrence Hurley, in May, the “11th U.S. Circuit Court of Appeals ruled that the failure of obtaining a warrant did not violate Davis’ right to be free from unreasonable searches and seizures under the Fourth Amendment to the U.S. Constitution.” This lead Davis to seek Supreme Court review and the result was the same as the 11th U.S. Circuit court of Appeals. The big question here that is constantly brought up by many people is how much privacy people and business have? Specifically, the four main cell phone carriers Verizon, AT&T, T-Mobile and Sprint, should they fight to keep their customers information private? According to Lawrence Hurley, this information is requested by law enforcement tens of thousands times per year. Many lower level courts have similar cases regarding business protecting the privacy of their customers and infringement of privacy.

A counter-argument can be for purpose where businesses and law enforcement may want to have the availability of this information to quickly solve cases such as Mr. Davis’s robberies. Business owners may support this for the purpose to protect their business from these robberies, however other business such as the cell phone carriers may argue that this is infringement of privacy towards their customers and hurts their business.

Michael is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2017.

Posted by Deane Franco.

While reading the Wall Street Journal, I found an article that deals with insider trading and why certain charges were being dropped. A year ago, SAC agreed to plead guilty to securities fraud and wire fraud and pay a $1.8 billion penalty and take responsibility for the actions of their employees, including Mr. Steinberg. Mr. Steinberg is a senior employee at SAC Capital Advisors LP who was charged with insider trading, along with 6 other analysts. The charges has since been dropped because Prosecutor Mr. Bharara said holding the accused any longer would be a form of injustice, since no information can be found incriminating the accused on their chargers. Before this came to light there were a few preceding facts. First, SAC’s founder Mr. Cohen has been on the radar of the SEC for years, as they try and gather proof that he used insider trading to boost his success. Also, Mr. Steinberg is a confidant to SAC founder Mr. Cohen, so this might have been the prosecutor’s way into discovering information about Mr. Cohen. Whatever the reason may be, after the public attention SAC Capital Advisors LP has now rebranded itself to be Point72 Asset Management LP. With all these facts being known, Mr. Bharara has still dismissed the charges against Mr. Steinberg and the case is currently in the process of being assessed by the SEC to see if they will accept the dismissal.

This case raises huge ethical flags to me because although prosecutors have not found any evidence to charge SAC capital Advisors with penalties, I think all its actions to this point have proven him guilty. A company has a moral duty to take responsibility for the actions of its employees as its own wrong doing. For that reason, employees conducting insider trading means the company also conducts insider trading and should be penalized for such. SAC Capital Advisors felt the heat of the media and SEC pressure to the point where they “rebranded” themselves as a new company, and now only manage Mr. Cohen’s fortune and no outside clients. An innocent company has no reason to hide behind the act of rebranding if their company truly acted in an ethical way. I would be curious to see if the SEC turns up any wire fraud charges or some procedural error in the way SAC Capital Advisors conducted their insider trading business.

The reason why I think insider trading and other illegal investment activities like this should be penalized harshly is because the educated few, take nonpublic information to give themselves an advantage that will take advantage of those who know less about the markets. When it comes to investing, investors should feel safe that they have received adequate information to make an informed decision that could eventually lead to a return on their investment. These dishonest acts in trading tip the scale to make investors not feel secure and confident that their money will not be consumed by a cheating wealthy party; and then who really loses when investors stop investing? I understand that so far, no evidence has risen to provide factual evidence of wrong doing, but there must be some leadership member of SAC who will own up to SAC’s ethical responsibility to society.

Deane is a finance and information technology management major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Ashley O’Connell.

Relating to the topic of criminal law, I found an article published on November 11, 2015 from FoxNews.com called, “‘The biggest sham’: Sheriffs fume at mass release of 6,000 federal inmates.” Numerous sheriffs, policeman, and local community attendees shared their concern in regards to their safety and their thoughts on the release of 6,112 inmates. These inmates were released from a federal prison and has caused worry for citizens in early November. The release took place at the El Reno federal Correctional institution in Oklahoma.

Participants of the criminal justice reform have stated how the process of the inmates being released is being highly monitored and “handled responsibly.” The idea of the inmates getting released came from a discussion from the U.S Sentencing Commission when they decided to “reduce sentences for most drug trafficking offenses.” Most of the criminals that were released had been in federal prison for nine years. In the article it states, “[Y]ou don’t have to be a sheriff to realize that a felon after nine years in jail isn’t going to be adding value to the community. A third are illegals and felons so they can’t work.” Reading this quote from the article opened my eyes and made me realize that I am not the only one with this opinion, and even sheriffs feel the same way but they cannot do anything about it.

The 6,112 inmates who were released are only a portion of the total number by the end of the year. Currently, there are 46,000 more cases in which are being investigated and reviewed. Of the number being reviewed along with the amount of people who were released, there is an uproar of concern of whether the inmates are going to be violent or not. A great point about this is brought up, “If the Obama administration is not capable of making honest and prudent decisions in securing our borders, how can we trust them to make the right decision on the release of prisons who may return to a life of crime? I’d be amazed if the 6,000 . . . being released are non-violent.” I agree with this statement in regards to the violence; I believe that there will be a handful of people who will be violent.

Criminal justice advocates disagree with the Sheriffs’ opinion and do not see the issue in releasing the inmates. Their defense was that there are always inmates that are being released and the 6,112 inmates this month are not going to make a difference. The article is closed with a great quote, “There are many sheriffs feeling as though the administration will go through the motions of asking the questions but really not care what the opinion or expert advice of law enforcement is.” With this closing quote, I completely agree with everything that was said in this article. I do believe that the law enforcement is not being taken seriously, and I am afraid of what will happen if more inmates get released on a daily basis.

Ashely is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2017.

Posted by Steven Doolittle.

Daily fantasy sports are a huge part of the culture in the United States. DraftKings and FanDuel are two of the largest providers of daily fantasy sports and the New York State attorney general on Tuesday ordered those two fantasy sports companies to stop accepting bets from New York residents, due to their games constituting illegal gambling under the current state law. This decision has caused a major problem for the multibillion dollar industry, which has created a demographic of young people and partnerships with professional sports teams. Belief that this decision will continue into other states, a downward spiral for this industry is possible.

In 2006, fantasy sports that involved gambling were exempted from a prohibition against processing online financial wagering, because it was decided the games took more skill than luck. However, now with the offering of huge prizes on more individual sports leads to it being more luck- based, and therrfore, the decision is being questioned. As stated in the article, “The two companies can challenge the attorney general’s order in court. According to Joseph M. Kelly, a professor of business law at the State University College at Buffalo, the state would have to prove that chance is a material factor in fantasy sports, which would make it gambling.” There is a lot the needs to happen to finalize whether it can be classified as illegal.

“The attorney general’s office said daily fantasy sports ‘appears to be creating the same public health and economic problems associated with gambling.’” FanDuel and DraftKings argue that fantasy sports is a game of skill and legal under New York state law. Politicians are saying people are not allowed to play a game they love. It is a debate that will change the world of fantasy sports.

Steven is a student at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Connor Lynch.

An article from The Wall Street Journal titled, “Toshiba Shares Fall After Loss, Lawsuits” involves an accounting scandal within the Toshiba Corporation. On Monday, Toshiba Corp. shares fell 7.5% after the company shocked the public with their poor financial results. Because of the decrease in share price, the Toshiba Corporation is suing their former executives that are in connection with an accounting scandal which may show prolonged legal uncertainties.

For the latest sixth month period, the technology giant Toshiba released statements that showed a $733 million loss. Investors were surprised by both the huge economic loss and the odd time period for releasing the financial statement. After showing a $1.12 billion dollar profit in the previous year, the publicly traded company is in an obvious state of distress. The corporation is not in a good state as of recently, “Equally unusual was Toshiba’s disclosure that it had sued three former presidents and two other executives, seeking to recover ¥300 million in connection with the scandal. Toshiba has said it overstated profits by ¥155 billion over seven years, prompting the resignation of then-CEO Hisao Tanaka in July.” In the lawsuits, the CEO and two other chief officers are said to have exhibited lax oversights on the financial statements of the company. This accounting scandal has led to several lawsuits that are reflecting poorly on the corporation for obvious reasons.

In July, Mr. Tanaka had released a statement apologizing for the problems but denies knowing about any inappropriate accounting. Because of the lawsuits involving shareholders, the stock price of Toshiba has reached its lowest level since 2012. The scandal is viewed as a disaster and many officials are speculative that Toshiba may have more skeletons in their closet. Toshiba is now viewed as a corporation with a negative outlook with businesses that seem unprofitable and need restructuring. As of now, it is unclear of Toshiba’s true position because of the accounting scandal effects on their financial reports.

The difficulty that Toshiba is experiencing as of late is causing them to consider reconstructing the corporation. Earnings are deteriorating and this is not good for Toshiba, “Sales plunged and losses swelled in the company’s consumer electronics business, and earnings fell sharply in its semiconductor arm, a leading maker of flash memory chips for smartphones and other gadgets. The chip business has been Toshiba’s main money maker in recent years.” Because of the decreasing sales in Toshiba’s business market, it causes the public to wonder if the previous financial success was based solely upon accounting tactics.

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

Posted by Johnny A. Guerrero.

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

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

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

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

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

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