Posted by Lee Luu.

A federal grand jury indicted a man from Scotland for securities fraud after prosecutors said he manipulated stock prices using the social media application Twitter. James Alan Craig set up fake Twitter accounts in 2013 associated with real market research firms. Craig sent out false Tweets that would make the companies’ stock prices decrease, according to prosecutors. This would affect the shareholders on their purchase of stocks. After this atrocity, he would then buy the companies’ down-trending stock to make a profit when the stocks regained. According to prosecutors, shareholders’ stocks lost more than $1.6 million due to Craig’s illegal act.

The article quotes “This investigation dismantled a stock market manipulation scheme that operated with one goal in mind — to falsely defame a company in order to destroy its stock value for financial gain,” FBI Special Agent in Charge David Johnson said in a statement. Destroying a stock value for financial gain is unethical for it is detrimental to businesses. James Allen Craig committed a security fraud which meant inflating the price of stocks by brokers so that buyers can purchase a stock on the rise. Making profit from this was Craig’s only desire. He was accused of using his girlfriend’s online stock broker account to buy the stocks and sell them for a higher price.

Lee is finance major at the Feliciano School of Business, Montclair State University, Class of 2018.

Posted by Kirill Ivanov.

Tesla, a popular tech firm, is commonly known for its production of electronically-powered cars and batteries. Tesla Motors is among many ventures pioneered by Elon Musk, who has commanded the SpaceX programs as well as many other development projects. Tesla vehicles are not as popular as those produced by Honda or Toyota; while one may occasionally spot a Tesla model out on the road, sightings are few and far between. In order to expand their sales and drive more Tesla vehicles out onto the roads, Tesla Motors initiated a referral program. This referral program, which was based on rewarding customers for purchasing the company’s products, boasted many incentives for potential Tesla buyers as well as current owners.

According to Tesla Motors, anyone who ordered a brand new Tesla Model S before October 31st using a referral link from a current Tesla owner would get $1,000 off the listed purchase price. In return, the current owner providing the referral would receive a $1,000 voucher for a Tesla service center visit or a Tesla accessory. The offer went on to offer a $25,000 discount for a new Tesla Founder Series Model X, which is not available to the public, when a person provides ten referrals. Why was this program illegal? Tesla Motors simply created a way to thank its customers for building the Tesla community while simultaneously reeling in new customers to expand the existing community.

Unfortunately, Tesla’s referral program happened to violate a California State Law, which is quite ironic due to the fact that the company’s headquarters are located in Palo Alto, California. The company’s referral program violated the California Automobile Sales Finance Act, which states the following:

It is unlawful for any seller to induce or attempt to induce any person to enter into a contract subject to this chapter by offering a rebate, discount, commission, or other consideration, contingent upon the happening of a future event, on the condition that the buyer either sells, or gives information or assistance for the purpose leading to a sale by the seller of, the same or related goods.

As a result of its failure to comply with California State Laws, the Tesla Motors referral program did not attract the customers the company had hoped it would. Many businesses use referral programs to benefit loyal customers while simultaneously attracting new ones, but it is extremely important for such business to be aware of local laws. Ignorance on a company’s part can result in catastrophic legal damages, but lucky enough for Tesla the company only received a written warning from the California Department of Motor Vehicles.

Kirill is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Source: 

Title: DMV warns Tesla it’s referral program is unlawful

Author: Mark Glover

Published: October 15, 2015

Link: ( http://www.sacbee.com/news/business/article39309483.html )

Posted by Wing Sze Yu.

This article talks about China’s leading online marketplace, Alibaba, being sued by the owner of Gucci, Yves Saint Laurent, Puma, Kering Group, and other fashion brands for selling fake goods. This is not the first time that Alibaba is being complained about selling fake goods. The company states that it is taking action to fight against fake goods on its various websites.

Kering took legal action against Alibaba last, but the case was later dropped. However, Alibaba insisted that “it was enforcing a zero tolerance policy towards fakes.” To help customers to figure out if the products are authentic or not, Alibaba has recently announced a new anti-counterfeit technology. “The firm has announced a tie-up with an Israeli start-up to offer visual markers – similar to but less obtrusive than QR codes – that can be scanned with its Taobao app to prove that goods are genuine. Manufacturers are being invited to add the ‘dotless visual codes’ to their labels to help prove they are authentic.”

Wing is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Posted by Alyssa Cohen.

This year, JPMorgan Chase will settle the charges made against it for the use of illegal debt-collection practices made between 2009 and 2013. The lawsuit follows “a national settlement over similar allegations.” The nation’s largest bank miscalculated the amounts owed by customers, and sold debt to collectors that had been filed improperly against 125,000 Californians. It also obtained default judgment against active military personnel, which is against state and federal laws. While it is not illegal for a bank to attempt to collect overdue debt, the methods used by JPMorgan Chase were unethical and considered illegal by all states, as well as the federal government.

“In addition to other state penalties, Chase will pay $50 million in restitution to customers who were victims of its debt-collection practices.” It also agreed to conditions governing how they can collect or sell consumer debts to outside companies.

It just is not fair to customers who have not been able to notify the bank of their inability to pay. However, I believe that default judgment should be made against customers who were actively avoiding to pay back their debt. Dismissing the lawsuits that were filed improperly was a great sign of the progress that the bank has made to take responsibility for their wrongdoing, as well as not filing “any credit card debt suits against customers” since 2011.

Jumping ahead to filing lawsuits against a bank’s customers will no doubt hurt JPMorgan’s reputation. As with most lawsuits brought by the government, the majority of the fines collected went to the Consumer Financial Protection Bureau in order to help consumers take control of their own financial decisions. Protecting the consumer by educating and enforcing federal laws can make a great difference in the health of our economy.

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

Posted by Amber Piskunov.

GNC is a widely known and trusted nutritional health retailer that is now being sued for allegedly selling products known to contain an illegal amphetamine-like stimulant. The two chemicals are called Picamilon and BMPEA. In addition to selling the illegal drug, GNC clearly intended for it to be hidden because the chemical was not listed under the nutritional facts or ingredients. In today’s world, many people want to see fast results, such as losing weight or gaining muscle. Stimulants can do that by reducing digestion and hunger, while also increasing your energy output. However, it should be known that these drugs are illegal, addictive, and sometimes deadly. GNC didn’t properly label the product, making it dangerous for the consumers without prior knowledge of purchasing. The investigation is being aided by the US Food and Drug Administration; they have announced that the chemical is illegal and should not be sold to consumers. After this was found by the FDA, GNC has taken all products containing the chemical off the shelves for sale.

The lawsuit states that “GNC sells products obtained from third-party vendors that GNC knows or should have known it contained unlawful and potentially unsafe ingredients.” Being a previously trusted 2.6 billion dollar retailer of “nutritional and healthy supplements,” GNC has now publicly hurt their name because of the chemicals found. Consumers are most likely going to be worried about buying products from GNC because of the secret ingredients that were previously hidden. GNC has since denied any knowledge of the drug in their products or on their shelves, and the ones in question have been removed. They have also mentioned they are protected by federal regulations. The company is denying the claims against them and is strongly defending themselves against the lawsuit.

GNC has caused their company to have bad publicity, a decline in stocks, and also a decline in profits. This is a serious lawsuit regarding consumer safety. GNC was not properly selling their product and did not have the best intentions for the well being of the consumers. With that being said, GNC is now trying to gain sales back by promoting lower prices and a better store experience. This is a way for the company to try to stay stable while dealing with the negative attention the lawsuit has brought. The warning made by the FDA stated the product is, “a substance that does not meet the statutory definition of a dietary ingredient.” The laws were not followed when the company decided to not only put the chemicals in the product but to also not have it labeled for consumer knowledge. The public will now be safer with the product being off shelves. GNC ended up losing profits instead of gaining profits because statutory laws were not met.

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

Sources used:

http://www.bidnessetc.com/56383-gnc-holdings-inc-gnc-hits-new-52week-low-whats-instigating-the-crash/

http://money.cnn.com/2015/10/22/news/companies/oregon-ag-lawsuit-gnc/

http://www.bizjournals.com/pittsburgh/blog/the-pulse/2015/11/gnc-targeted-in-5m-class-action-lawsuit.html

Posted by Amber Piskunov.

The well known German car maker, Volkswagen, has made headlines regarding a scandal involving software that cheats diesel emissions testing. This software has affected over 11 million diesel fueled cars creating many lawsuits. The cheating software covered up nitrogen oxide emissions and underestimated greenhouse gas emissions and also fuel consumption. This scandal has created many more lawsuits against the car maker regarding the violations of the US environmental laws. Volkswagen has admitted to installing the software due to the investigation which also involves whistle-blowers of the company. There has been a lack of progress with this lawsuit because there is not a valid explanation as to whom allowed the decision for the cheating software.

The investigation is still ongoing; the EPA has called for the employees of Volkswagen to come forward with any information regarding the matter. They have until November 30th to provide information regarding the truth to the scandal. A statement was made by US law firm Jones Day stating, “Those who come forward before the deadline have nothing to fear from the company in the way of repercussions on the job such as being fired or held liable for damages.” However, this offer is only for those protected by the collective bargaining pact. This is a way for workers to feel less threatened by the scandal and to help the law firm gain information to further reach a decision. Volkswagen has said they have no influence over decisions made by other employees who decide to come forward. Volkswagen is trying to cover up as much information as they can to prevent further actions against them.

Volkswagen has been under the spotlight since the scandal was announced. Following the announcement, Volkswagen has had a drop in sales from all around the world. The company also announced they will begin fixing the emissions problem in January. Not only is Volkswagen beginning to fix the problem, they are also offering gift cards as a form of goodwill in hopes to help maintain their reputation. Compensation to car owners is still being discussed as the lawsuit continues.

The impact this has had on the car maker should have been looked upon before the decision was made to install the software. Volkswagen clearly knew this was an issue and still decided to produce the vehicles in hopes of profits. Not only did they get caught with illegally installing software that goes against the Environmental Protection Agency, they now have a massive lawsuit causing bad publicity and a decline in sales. All in all, Volkswagen has affected many aspects of their company along with the public and environment.

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

http://www.theguardian.com/business/2015/nov/13/volkswagen-car-sales-fall-october-emissions-rigging-scandal

http://www.wsj.com/articles/volkswagen-to-offer-whistleblowers-impunity-on-emissions-cheating-scandal-1447317337

Posted by Kirill Ivanov.

This article discusses a team of cyber criminals accused of cyber fraud for targeting various companies within the United States. Gery Shalon, Joshua Aaron, and Ziv Orenstein were charged in a 23-count indictment alongside crimes targeting 12 different companies. Their unlawful behavior is stated to be traced as far back as 2007. These men ran an enterprise that has been accused of pumping up stock prices, running online casinos, processing payments for criminals, laundering money, and exchanging illegal bitcoins. Prosecutors stated that the illegal proceeds from their manipulation of stock prices equaled tens of millions of dollars. One particular quotation that stands out describes the defendants’ schemes:

The alleged conduct also signals the next frontier in securities fraud – sophisticated hacking to steal nonpublic information, something the defendants discussed for the next stage of their sprawling enterprise. Fueled by their hacking, the defendants’ criminal schemes allegedly generated hundreds of millions of dollars in illicit proceeds.

The future of cyber crime could be moving into this “next frontier,” and it may even evolve to encompass other crimes such as insider trading. What if hackers discover a way to access a company’s emails and databases, then use the this inside information to trade outside the company? This ability would allow such criminals to operate from “within” the company without physically setting foot in its headquarters; these cyber criminals would, in essence, operate as ghosts.

Kirill is an accounting major at the Feliciano School of Business, Montclair State University, Class of 2018.

Source:

Title: “U.S. charges three in huge cyber fraud targeting JPMorgan, others”

Author: Jonathan Stempel and Nate Raymond

Published: November 10, 2015 4:43pm EST

Link: ( http://www.reuters.com/article/2015/11/10/us-hacking-indictment-idUSKCN0SZ1VM20151110#c1rBtki5qh764cBV.97 )

Posted by Wing Sze Yu.

In this article, Facebook intends to appeal a data privacy ruling in Belgium. This privacy ruling forces social media to stop collecting digital information from people who are not its users. There is a tough line about how American technology companies, such as Facebook, gain access to, manage and use people’s information on their website even for the European Court of Justice, as well as the European Union’s highest court. In Monday’s ruling, a court in Brussels states that Facebook has no right to collect person information in Belgium who do not have an account with the social network.

Prior to the data privacy rule, Facebook had collect data from people’s online activities, both Facebook users and non Facebook users through digital cookies. Facebook responds that it had been using digital cookies to collect information without facing complaints, so it would appeal the ruling. Yet, Facebook promised to stop collecting online information from people in Belgium who do not have a social media account.

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

Posted by Emmanuel Martinez.

Mark Cuban who is well known for his high profile lifestyle has recently been acquitted from the charges against him for insider trading. The SEC brought a “civil lawsuit against Cuban in November 2008. A judge dismissed the suit in 2009 but an appeals court revived the case the following year.” Cuban decided to go to trial.

The lead prosecutor in the case, Jan Folena, accused Mark Cuban of getting a private tip to avoid a loss of about $750,000 when he sold his interest in Momma.com.  Cuban was accused of getting a tip from Chief Executive Guy Faure, who supposedly gave him a heads up about the company planning a private placement, which would had affected the investment Cuban had in the company;  his investment amounted to about $7.9 million dollars.

Mamma.com dropped 9.3% after the private placement offering. Mark Cuban was accused of insider trading because he sold his shares two weeks prior to the stock dropping. Cuban stated that potential investors were being contacted to participate in the private placement and this is how he made his judgment to sell his shares. He denied any inside information being given to him that the public did not have.

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

Posted by Kesha Patel.

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

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

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

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