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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Posted by Samantha Staudt.

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

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

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

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

Posted by Ryan Simoneau.

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

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

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

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

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

Posted by Elizabeth Win.

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

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

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

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

Posted by 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.