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 Isabelle Roddy.

Two brothers, Thomas and John Buckner, founded a defense contractor in Pittsburgh, PA, known as Ibis Tek LLC, specializing in the expansion and improvement of transparent armor and miscellaneous gadgets for warfare vehicles. Specifically, Ibis Tek supplies and provides the United States Department of Defense with transparent armor, advanced lighting, and tactical vehicles and accessories. The founding brothers sold the company to new investors in February 2017.

While operating the company, the brothers executed numerous illicit activities, particularly through the “Michigan-based U.S. Army Tank-Automotive and Armaments Command or TACOM” (Mandak). They swindled TACOM by employing a cheaper Chinese firm to construct emergency window kit frames for only $20 and then selling them to TACOM for $60, thereby making a $40 profit on each frame. Additionally, the brothers “sold scrap aluminum relating to the manufacture of the frames” but retained the earnings (Mandak). Consequently, the individuals executed a “$6 million scheme to overcharge the U.S. Defense Department” (Mandak).

As a result, in May 2017, the brothers plead guilty “to charges of major fraud against the government and income tax evasion for filing returns that did not include the illegal income” (Mandak). The individuals were incarcerated and received monetary fines. Precisely, Thomas Buckner received a two and a half year sentence and a fine of $500,000. On the other hand, John Buckner only incurred a two-year sentence and a fine of $300,000. Thomas received the more severe penalty due to his day-to-day involvement in the company, prominently after retiring from the company’s management in 2007 (Mandak). Nevertheless, the brothers “have already repaid $6 million to the government, plus another $6 million to settle a lawsuit the government filed against them for the scheme,” and nearly $2 million in income tax losses and interest (Mandak). However, legal officials do not believe money damages are a sufficient form of punishment for the two given their affluence. Instead, they must provide more than mere monetary compensations.

Finally, the previous chief financial officer of the company, Harry Kramer, was charged as well due to his assistance in “filing false tax returns that understated Ibis Tek’s income in 2009 and 2010” (Mandak). He will be sentenced on October 18.

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

Source:

http://news.findlaw.com/apnews/34ae2fdc684b45188d9bb4907ad66a8a

Posted by Nicholas Cizin.

Artificial intelligence has the power to transform the business world like no other invention. It is the ability for computers to think and learn for themselves, quite often better than humans. A great example of this is IBM’s Watson. Watson is famous for its time on Jeopardy, thinking, generating, and then speaking answers quicker and more accurately than a human contestant. Recently, Watson has been revolutionizing healthcare, helping to diagnose cancer and develop new treatments (1). The positive potential of artificial intelligence on business is limitless. In the future, businesses will likely be able to use artificial intelligence to increase production efficiency, reduce expenses, and develop new products.

Despite such amazing business potential, AI also poses an extreme threat. Companies could easily use AI to exploit customers, hack other companies, and steal from competitors. Recognizing both the positives and negatives of artificial intelligence development, lawmakers have the responsibility to pass laws that regulate AI’s destructive power. As it is said, with great power comes great responsibility. There are laws to regulate technology, but currently none specifically for AI. Courts deem developers liable for harm caused by software like robotics when the developer is negligent or could foresee harm. But with AI’s ability to think for itself, there is potentially no fault by humans or foreseeable injury. Traditional tort law would therefore most likely find developers not liable (2). Companies and lawmakers alike agree new laws must regulate AI, unfortunately, the timing of this regulation is still under debate.

Some believe laws should be implemented only after artificial intelligence affects the business world. Thus, laws would be created on a case-by-case basis. For example, Thomas C. Henderson, a professor at the University of Utah’s school of computing, uses a speed limit analogy to represent his view on AI regulation. He says, “you only impose speed limits once you build cars that can go faster than is safe” (3). Although, Mr. Henderson’s opinion is quite logical, others believe AI has too much potential for harm to regulate only after a negative result has occurred. This is the opinion taken by the business-world famous, Elon Musk. Musk firmly believes, “we need to be proactive in regulation than reactive. By the time we’re reactive in AI regulation, it’s too late” (4). Elon Musk sees the potential harm AI can cause if not regulated from the start. The only issue is that it is quite difficult to regulate something that has not been created. For example, the British Parliament’s House of Commons Science and Technology Committee stated, “while it is too soon to set down sector-wide regulations for this nascent field, it is vital that careful scrutiny of the ethical, legal and societal dimensions of artificially intelligent systems begins now” (3). Governments around the globe fully recognize the challenge of regulating AI in its early stages of development.

In my opinion, AI regulation should be a combination of the two theories. If dangers of AI can be logically seen, laws should be put into place before the development of such activity ever occurs. This may inhibit AI’s potential, but is worth preventing foreseen harm. Not all harmful uses of AI can obviously been seen as it is in such infantile stages of development. This is why constant evaluation and laws on case-by-case basis must actively regulate AI. If a harm cannot foreseen, as most is not with developing technology, then the law must be able to expand and adapt quickly to prevent harms from being repeated. In the coming years, it will be interesting to see how laws regulate AI. One can only hope regulation is done so successfully.

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

Sources:

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

A veteran did the brave thing by taking a truck to drive victims of the Las Vegas shooting to the hospital. In the article, the author loosely uses the word “steal,” in reference to the truck, but in fact the defense of necessity would negate any charge of theft.

The veteran stated “he looked for victims with the most serious injuries first, loaded them into the truck bed and drove them to Desert Springs Hospital Medical Center. He made two trips before ambulances arrived on scene.”

Friends said of him: “‘You’re an outstanding example of what we should all strive to be in time of crisis,’” “There’s a lot of unsung heroes that day that stood up and helped people,” the veteran told the press.

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

Posted by Milan Rana.

Finally, SEC’s one of the biggest insider trading case reached a settlement on May 18, 2017. This case is no different than other wall street insider trading cases. However, the important thing to note here is unlike other hedge fund managers, Mr. Cooperman did not plead guilty to the charges against him. In an interview with CNBC he said, he would have won the case had it gone forward. Fortunately, he learned from his lawyers that settling the case would cost him far less than dragging it a long way, even though he knew he would have won regardless. Upon reading the details of the case, we realize that the defense seemed to be weak and hard to prove. Yet, it is surprising that how court let him go with a penalty of couple million dollars. On September 21, 2016, the SEC charged hedge fund manager Leon Cooperman and his firm Omega Advisors with insider trading based on the nonpublic information received and used by Mr. Cooperman.  The SEC alleged that in 2010 Mr. Cooperman generated significantly large profits by trading securities of APL (Atlas Pipeline Partners L.P.) based on the information that he received from the APL senior executives. The Venue for this case was carefully selected as the violations of the securities occurred in the Eastern District of Pennsylvania.

After spending 23 and a half years at Goldman Sachs, with last 1 and a half year serving as a Chief Investment Officer, he decided to move on and start his own hedge fund company. He had learned and practiced many client building and maintaining tactics while working at Goldman Sachs. One of the powerful strategies of Cooperman was to accumulate large positions in the publicly traded companies and develop close relations with the company executives. By December 2009, Cooperman held over 9 percent shares APL, valued at approximately $46 Million. As a result of this, he developed such close relationships with company executives that led him access to various information that other smaller shareholders had no access to. On July 7, 2010, Cooperman learned from one of the APL executives that APL was negotiating the sale of Elk City(One of the APL’S largest pipeline plant) for approximately $650 million. He knew that if the deal goes through, APL stock prices would rise significantly.

According to the SEC report filed with the court, Cooperman promised the executive to keep the information secret and would not use it to trade the securities. However, he did not abide by the promise and that same day he started buying APL securities. He bought every security he could – Stocks, Bonds, Call Options. The report also states that until July 7, 2010, there was not a single day on which Cooperman’s Offshore Account, Hedge Fund Accounts, Managed Accounts and Family Accounts traded in APL securities. However, between July 7 – July 28, 2010, Cooperman and his accounts had purchased 343,600 Stocks, 4,500,000 Bonds and 6,781 Call options of APL. On July 27, 2010, Cooperman spoke to one of the executives again and confirmed the sale for $680 Million. Mr. Cooperman allegedly collectively generated $4.09 Million by trading in APL securities. The report also states that in breach of a duty of trust or confidence, Cooperman and Omega knowingly or recklessly traded APL securities on the basis, and while in possession of material nonpublic information related to APL’ s Elk City sale that Cooperman obtained from APL Executive.

According to the article titled “The SEC’s Biggest Insider Trading Case Is Heating Up” in Fortune magazine, stated that in his one of the television appearance Cooperman uttered the words, “These charges are total without merit.” This case has largely impacted his reputation as a hedge fund manager. Two years ago, his firm Omega had $10.4 Billion in assets, which slid to $3.4 Billion now. Moreover, he had also decided that if the case would drag long enough, he would consider closing the business. After all it’s all about the hard-earned respect and reputation he has earned being in this industry.

A Forbes article titled “Hedge Fund Billionaire Leon Cooperman Settles With SEC On Insider Trading Charges.” States that SEC had offered Cooperman the opportunity to settle the case agreeing to five-year industry ban. He instead chose to contest the charges in order to keep his reputation intact. Months after when the case was set for trial, the court approved the settlement of $4.9 Million in fines and penalties and agree to have an independent compliance monitor at his funds. The SEC has also provided the phone conversation of Mr. Cooperman and Executives in their report. Also looking at the transactions that Mr. Cooperman and his firms made, it clearly shows that he has received some kind of tip that he suddenly started buying APL securities. Yet, it is very hard to believe that he got off the hook without pleading guilty, with a smaller fine than expected, and still in business. 

Milan is a graduate student in the Feliciano School of Business, Montclair State University.

Bibliography

Celarier, Michelle. “The SEC’s Biggest Insider Trading Case Is Heating Up.” Fortune Finance. Fortune, 18 Jan. 2017. Web.

Gara, Antoine. “Hedge Fund Billionaire Leon Cooperman Settles With SEC On Insider Trading Charges.” Forbes. Forbes Magazine, 19 May 2017. Web.

SEC VS LEON G. COOPERMAN. No. 2:16-cv-05043-JS. The Eastern District of Pennsylvania. 20 Mar. 2017. Web.

Posted by Marissa Aniolowski.

These two articles both address the same issue that occur in two different companies. This issue is sexual discrimination. In the first article, a woman accuses AutoNation of promoting a male over her solely because she is a female. The second article, addresses the issue of gender pay in the company Oracle.  As a female business student, I am concerned about being a woman in the business world because of issues like these.

In the first article, Jaqueline de la Torre filed a complaint about AutoNation because when the Parts Manager position opened up, AutoNation immediately hired a male despite the fact that they had a female Assistant Parts Manager who had been on the job for 10 years and was more than qualified to be promoted. According to De la Torre she was told they “needed a man” for the position, and she was then required to teach the new Parts Manager how to do his job because he was previously a sales associate at the dealership. Because the company failed to promote her, the Equal Employment Opportunity Commission is suing AutoNation for violating Title VII and the Civil Rights Act of 1964. As a female, I would defend De la Torre’s side because I know women are just as capable as men are. It is a difficult accusation to prove, but women are undermined in the work world, and that needs to change.

In the second article, three women in the senior product development role are accusing Oracle of paying their male colleagues in the same position more money. The article states, “It’s the third time this year that Oracle has been in the news around pay discrimination. In January, the U.S. Department of Labor filed a lawsuit against Oracle claiming the company systematically pays its white male workers more than women, and men of color.” The women’s lawyer is still searching for evidence to support their claim, but their lawyer, “says he wants to file a class action lawsuit that would cover some 1,200 women at Oracle.” How you prove the company is paying the white men more money than the rest of the workers based solely on their gender and color is a difficult task to prove, but why issues like this are still occurring is concerning. How long will it take people to realize that men, women, and people of different races are all capable of doing the same work, and the diversity will only help companies grow?

In many businesses, discrimination is still currently a big issue. It is an issue nationwide, outside the business realm that needs to be fixed, and should no longer be tolerated. The issues with these cases is finding enough evidence to support the claims and prove that they have been discriminate. The great strides that have been made to equality of race and gender are not something to ignore, but in today’s day and age, any person should not tolerate discrimination.

Marissa is a student at the Stillman School of Business, Seton Hall University, Class of 2020.

Sources:

EEOC sues AutoNation for alleged sex discrimination

https://www.bizjournals.com/southflorida/news/2017/10/02/eeoc-sues-autonation-for-alleged-sex.html

Oracle faces possible class-action lawsuit over gender pay discrimination

https://www.bizjournals.com/sanjose/news/2017/10/02/oracle-gender-pay-discrimination-lawsuit-orcl-goog.html

Posted by August Pimentel.

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

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

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

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

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

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

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

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

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

Sources:

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

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

Posted by Anna Fajnorova.

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

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

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

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

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