Posted by Mario Damasceno.

In mid-February of 2015, federal prosecutors investigated United Airlines and its close relation with then chairman of the Port Authority of New York and New Jersey, David Samson. The investigation arose shortly after Samson’s resignation, resulting from emails released that showed aids to Governor Chris Christie had intentionally organized lane closures on the George Washington Bridge. This is particularly significant because during his time in office, Samson would spend his weekends in Aiken, SC, which was located 50 miles from the Columbia, South Carolina airport, however, United never initially offered that route from its New Jersey hub.

The New Jersey paper known as the Record reported, “Federal aviation records show that during the 19 months United offered the non-stop service, the 50-seat planes that flew the route were, on average, only about half full,” and “was reportedly money-losing,” (The Economist). This, in turn, lead to the route being named, “The Chairman’s Flight.” The route itself “left United Airlines’ Newark hub each Thursday night bound for Columbia, S.C. On Monday mornings, United Express flew back to Newark,” (Bloomberg Business). Furthermore, federal prosecutors argued that, not by coincidence, “United cancelled the flight on April 1st, 2014—just three days after Mr. Samson resigned from the Port Authority” (The Economist).

The entire situation is worth looking into, and in fact, the Port Authority along with United Airlines have been issued subpoenas examining the communication between David Samson and the airline. Mary Schiavo, a former federal prosecutor and Department of Transportation inspector general stated, “If United realized they were offering this flight to curry favor with a public official, then United’s in the soup—it’s a bribe,” (Bloomberg).

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

Bachman, Justin. “Did United Put a Whole Route in the Sky for One Very Important Passenger?” Bloomberg Business. N.p., 25 Feb. 2015. Web. 27 Oct. 2015. .

Gulliver. “The Chairman’s Flight.” The Economist. N.p., 10 Feb. 2015. Web. 27 Oct. 2015. .

“United Airlines: The Chairman’s Flight.” Reinventing the Company 12 Sept. 2015: n. pag. Web. 27 Oct. 2015. .

Posted by Deena Khalil.

There are two sides of every story. According to Kelly Wallace who works for CNN, “It’s a case of she said versus they said.”

Rachael Cunnings, a young girl from New Jersey, accused her parents of throwing her out of their house when she turned eighteen. They refused to pay for her private school tuition, and so she sued them for expected future expenses, such as transportation, bills, college tuition, and living expenses.   The teen’s parents argue “that she was not kicked out of the house. Instead, they say she left on her own back in October because she didn’t want to abide by their rules.” There were many claims against each side, such as Rachael’s parents not liking her boyfriend, missing curfews, getting suspended, and apparently the teen’s parents were abusive.

The judge in the New Jersey Superior Court denied Cunnings request for high school tuition and living expenses. “The judge sounded skeptical of some of the claims in the lawsuit, saying it could lead to teens ‘thumbing their noses’ at their parents, leaving home and then asking for financial support.” There was another hearing that took place the following month about other issues in the case including her college expenses. Before the hearing, Rachael dropped the case; she was accepted by Western New England University with a $56,000 scholarship. In the end, the teen did not end up empty handed.

Deena is a finance major at Montclair State University, Class of 2017.

Posted by Justin Ihnken.

For many years, especially those who found themselves in an area of economic success, investors who succeeded because they worked with a financial advisor. The roll of the advisor is to assist individuals in asset portfolio management. Investments in both fixed market vehicles, and those driven with equity in the market, have [for the majority of advisors] been the number one and two sources of financial security investments. Both of these categories are tied together with the strategic planning and goal orientations of specific individuals. This theory comes primarily because “your advisor” would allocate dollars in a way that would ultimately secure monies for specific reasons and even more so, provide an aspect of future practical growth.

As time continues, there are still many individuals that work with advisors and insist that they do planning and individual investments on their own. Coming changes in investments will show that there is a driving need for RIA’s (Registered Investment Advisor). Unfortunatly, the traditional fixed income and equity allocations are rather lacking for specific individuals that wish to diversify their portfolios accordingly. A recent study done by Bridget Bearden, director of retirement research at fund industry consultant, Strategic Insight, went as far as to say many folks do not understand that the effects of falling short on their diversification strategy may have a serious impact in the long run.

“The fund industry generally advocates a 10 percent to 20 percent allocation to liquid alternatives for risk mitigation. But many off-the-shelf asset allocation portfolios seem to fall short of that.”

Many RIA’s are of traditional thought, however the coming realization of alternative investments is proving itself to be a more prominent tool to properly advocate clients. An example of a small and “up and coming” firm that shows its mindset is multiple footsteps ahead of the curve would be that of Circled Squared Alternative Investments. Circled Squared was founded in 2014, by Jeffrey Sica, CEO and President of Sica Wealth Management. With the changing times and ability to allocate dollars properly will prove to be a huge outlet for this small powerhouse. In an interview with a Berkshire Hathaway associated press, Sica spoke on his outlook and thoughts on the future for both Circle Square and alternative investments.

Add to this the inescapable conclusion that investors are growing increasingly dissatisfied with the stagnant performance and unacceptable volatility they’re getting from traditional investments like stocks and bonds, and you have a situation in which advisors have fewer and fewer ways to provide value to their clients.

As the stock market continues to be a murky water, few dare to try to understand the various inlets and outlets of the market. With the change of alternative investments slowly phasing themselves into our everyday planning as RIA’s, we must work above and beyond the curve and enable our’ clients and potential clients alike to take advantage of the various opportunities that alternative investments withhold.

**About Circled Square Alternative Investments

“Circle Squared Alternative Investments is a firm devoted to providing independent financial advisors with access to a range of innovative alternative investments previously available only to institutions and ultra-high net-worth investors. The suite of investment products will include real estate, private equity, private credit, natural resources, private placement offerings, entertainment and media.”

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

Sources:

1. D’Allegro, Joe. “A Retirement Riddle Placing $1 Trillion at Risk.” Cnbc.com. CNBC, 10 Nov. 2015. Web. 12 Nov. 2015.

2. Healy, Andrew. “Jeff Sica Launches New Alternative Investments Firm for RIAs; Unlocks Door to ‘Real Economy’.” Business Wire: A Berkshire Hathaway Company. Berkshire

Posted by Anna Fintor.

Wells Fargo is currently involved in a legal scandal in which it is said to have opened bank accounts and credit cards without the costumer’s consent. According to Reuters, “The U.S. Consumer Financial Protection Bureau and other regulators ordered United States’ third-largest bank by assets to pay $190 million in fines and restitution to settle civil charges.” The scandal has been going on for several years and there were as many as 2 million accounts opened illegally.

Wells Fargo has been known for its “high-pressure” sales culture, which one of my personal friends who has worked in one of the branches can account for. The Bloomberg article I have read describes how anonymous users have been posting cartoonish videos on YouTube presenting the negative work atmosphere at Wells Fargo. The videos show how management pressured and threatened workers that if the unreasonable goals were not met the workers would be let go.  It is suspected that the videos were created by employees as far back as in 2010.

While reading the articles, I remembered one of the discussions from class of how in large corporations top executives can pressure the bottom level workers to commit the illegal activity. One of the YouTube videos shows that bankers received $5 McDonald’s gift cards for opening a new account, while the executives received generous bonuses. In my opinion that’s very unethical and just wrong.

In the recent weeks the CEO, Jhon Stumpf has resigned and Wells Fargo continues to be under investigation. I feel like this situation is going to hurt Wells Fargo not only financially but also create bad reputation. Due to the popularity of social media, the videos will spread to a vast number of the population, including to those who may not be keeping up with the news.

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

Sources:

https://www.bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal-after-wells-fargo

https://www.bloomberg.com/gadfly/articles/2016-10-21/psst-regulators-watch-videos-for-bank-scandal-after-wells-fargon fines and restitution to settle civil charges

http://www.reuters.com/article/us-wells-fargo-accounts-california-idUSKCN12J2O

Posted by Ashley Torres.

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

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

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

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

Posted by Dylan Beland.

One of the most talked about issues in business law news is the Wells Fargo scandal. The story behind this scandal is that the Department of Justice and many attorneys are investigating the possibility that Wells Fargo has millions of fake accounts opened at their banks. The result of the investigation was Wells Fargo had to pay a 185 million dollar fine.  Wells Fargo had to let go over 5,300 workers for fraudulent sales tactics.

From this, the concern and worry in the banking industry instigated a lot of questions about the fake accounts being opened. Employees were pushed to reach near-impossible sales targets, which in turn led to the creation of fake accounts. Mike Mayo, a banking analysist at CSLA, said the investigation “reflects pent-up frustration by the public over the lack of accountability at big banks post financial crisis.”

The people that could see some blame for this are the investors of the banks. One of Wells Fargo’s biggest investors has not spoken, since the situation has arisen. Warren Buffett is Wells Fargo’s biggest investor and he owns Warren Buffett’s Berkshire Hathaway.

On September 20, Wells Fargo is meeting with the Senate and is having John Stumpf, CEO, represent and testify at the hearing. He apologized for the fake accounts but also said he does not plan on resigning from being CEO of Wells Fargo.

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

Posted by Justin Cohen.

Martin Shkreli a pharmaceutical CEO raised the price of an AIDS drug that saves people’s lives. In December of 2015, the prices of the drug, called Daraprim, was raised by five thousand percent, one bottle originally being $13.50 to $750.

The ethical problem in this situation was by making the drug so expensive that only a select few could afford it, hurts the people the company is allegedly trying to help. The company made this drug not only to make a profit, but also to help patients with AIDS. Shkreli states “Because the drug was unprofitable at the former price, so any company selling it would be losing money. And at this price it’s a reasonable profit. Not excessive at all” –Shkreli.

This drug has been selling for sixty-two years. I think the new price of this drug is very excessive. The company has been living off the past profit for years. The price could have been raised, but 5,000 percent is very excessive.

Companies making drugs to help save lives should be more worried about the people they are serving than making the most profit they can. This brings up the ethical questions, was making money more important to Shkreli than saving lives? What did he think was going to happen to the patients who now could not afford the drug? Why did Shkreli put himself before thousands of other people? Lastly, what are the ethical obligations of a company to aid the public vs. making a profit?

Justin is a sports management major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Jose L. Diaz.

Imagine having a potential life-ending disease or illness that you depend on medication for to survive. Money is tight, and most of your savings goes towards purchasing the medication in order to survive. Suddenly, just overnight, the price of this drug not only increases, but it increases by 5000%. While it sounds absolutely absurd, this actually happened when Turing Pharmaceuticals, a startup company being run by a former hedge fund manager, increased the price of their drug called Daraprim, from $13.50 a tablet to $750 a tablet overnight. That is not $750 a prescription–it is $750 per tablet. This brought the annual cost of treatment for some patients to over a hundred thousand dollars.

Martin Shkreli, CEO of Turing Pharmaceuticals, claims that the drug is so rarely used that the price increase would not have a significant effect on the health system. He claims that the money earned from the price increase would go towards developing better treatments for toxoplasmosis, the disease that is treated by Daraprim. However, the price increase will make it almost impossible for private insurers like Medicare and patients in hospitals to attain. The fact that the drug is so expensive and hard to attain now, it makes it harder for other companies to make samples of the drug and replicate it. Overall, the drug is the leading treatment for the life-threatening parasitic infection toxoplasmosis. The increase in price seems to be an only profit-driven choice.

Jose is finance and accounting major at the Stillman School of Business, Seton Hall University.

Posted by Joseph Papandrea.

Chipotle is a company that has had a rough year due to people getting sick from eating at the popular fast-food chain. Steve Ells and Monty Moran, two executives who share the job as CEO, were affected when people started getting sick. Just before that outbreak, the company’s stock reached an all-time high. It was going for $758 a share, but once people started getting sick it was down to a little over $507 a share. Both Ells and Moran brought in around $13.8 million each, with the based salaries increasing by just over $100,000. The outbreak of this health crisis hurt Chipotle’s sales and had a huge impact on their image. For this to happen during a time where stocks and sales were up is tragic. The company did the right thing by temporarily closing their restaurants for the safety of society. The company had to sit down and figure out what was causing this health crisis.

This was the first time the company had a decrease since opening 10 years ago. The company took in only $68 million in profit, which reflected a 44% drop. Things like this are going to happen to companies. A company that is very successful has its down falls. Chipotle did the right thing by closing temporarily. Getting their image back from this crisis will be be tough. The focus for the company should be getting the trust back from their customers. We know this breakout was called E.coli, but the cause was never determined.

The best thing the company could do is advertise to get the trust back. The customers should always come first and their satisfaction should as well. The company still did fairly well even when the health issue broke out. This is an eye opening situation for all businesses, that even though there is a downfall they could always bounce back and get the customers trust back. Customers were hospitalized, and it is best that Chipotle is able to prevent that from happening again.

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

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 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 Justin Gandhi.

Cuban was originally accused of ditching a stock in 2004 called Mamma.com, a metasearch Internet company. He was accused of ditching this stock due to obtaining an inside tip on an upcoming offer that would have diluted his shares.

The SEC didn’t have much evidence on its side and claimed that Cuban ditched the stock in order to avoid $750,000 dollar losses. The SEC had to prove that Cuban received confidential, significant, nonpublic information which is the reason for him selling his stock. The SEC received this information through an eight-minute phone call recorded between Cuban and Mamma.com’s CEO.

During the phone call, the CEO stated he told Cuban confidentially that he was planning a stock offering called Private Investment in public equity. Cuban responded with, “Now I’m screwed. I can’t sell.” This was an indication the insider information and decided to sell anyway.

Cuban testified that there were many reasons he ditched the stock, and that he was never told to keep the information secret. In addition to that, the information wasn’t important in his decision and said the public had this information too, as shown in a website posting. This was basically one man’s word against the others.

Lastly, insider trading requires that a trader act on “material, nonpublic” information, meaning that this information must be significant as well. It wasn’t significant, as shown in a study by Dr. Erik Sirri, a former high-ranking official at the SEC.

Overall, if Cuban went to trial, he could have faced about a 2 million dollar fine, which was less than the amount he spent on lawyers to prove the SEC wrong.

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

Posted by Kate Robinson.

Tyco International, Limited, is a corporation that provides over three million customers globally with fire protection and security products and services. It is currently the world’s largest pure-play fire and security company. Tyco is incorporated in Switzerland and its operational headquarters are located in Princeton, New Jersey.

In 2002, Tyco’s former CEO, Dennis Kozlowski and CFO, Mark Swartz, were charged for stealing $150 million and inflating the company income by $500 million. The two of them were siphoning money through unapproved loans and fraudulent stock sales. They would then smuggle the money out of the company disguised as executive bonuses and benefits.

The Securities and Exchange Commission (SEC) and the Manhattan District Attorney investigated the scheme and uncovered questionable accounting practices, such as large loans made out to Mr. Kozlowski, which were later forgiven. After discovering these violations, Mr. Kozlowski and Mr. Swartz were sentenced to 8 to 25 years in prison and a lawsuit was filed forcing Tyco to pay back $2.92 billion to their investors.

Kate is a sports, events and tourism marketing major at Montclair State University, Class of 2017.

Posted by Daniel Lamas.

Just recently, on May 12 in Philadelphia, an Amtrak train derailed and killed eight people and sent over 200 to the hospital. A question everyone is asking is why the train was going that fast and why it curved. Brandon Bostian, who was the engineer, has agreed to be interviewed and many feel that he will be able to answer some important questions.

Bostian claims that he has no recollection of the accident and denies a lot of claims made about the way he operated the train. It was proven that Bostian was going 106 miles per hour when the train should have only been going at 50 miles per hour. Bostian has refused to talk about that part of the case, as he has a Fifth Amendment right to remain silent, and has only said that by the time he tried to pull the safety brakes, it was too late. Bostian has already gotten a lawyer and is prepared if he is sued. Even though there are not yet any charges against Bostian, he knows that he must prepare himself for what is to come. Mayor Michael Nutter said, “He doesn’t have to be interviewed if he doesn’t want to at this particular stage. . . . That’s kind of how the system works.”

Daniel is a business management and merchandising major at Montclair State University, Class of 2017.

Donald Trump’s tax plan will make it more simple to pay the government. There are four tax rates under the plan: 25%, 20%, 10% and 0%, eliminating most deductions. The death tax will be eliminated.

According to the website, “The Trump plan eliminates the income tax for over 73 million households. 42 million households that currently file complex forms to determine they don’t owe any income taxes will now file a one page form saving them time, stress, uncertainty and an average of $110 in preparation costs. Over 31 million households get the same simplification and keep on average nearly $1,000 of their hard-earned money.”

Small business should see some relief. Under the new proposed law, all businesses will be paying the same rate. “No business of any size, from a Fortune 500 to a mom and pop shop to a freelancer living job to job, will pay more than 15% of their business income in taxes. This lower rate makes corporate inversions unnecessary by making America’s tax rate one of the best in the world.” A corporate inversion occurs when a U.S. company incorporates in another country to avoid paying high taxes here on income not earned in the U.S.

Posted by Ovais Ahmed.

An article posted by the Wall Street Journal talks about the time it takes for high courts to actually hear a case. The average time runs around 6 years, and since 2009 that time period has been extended. There has been a case involving two businesses that are battling about who gets trademarks rights to screws they use. The article states,

The Supreme Court on Tuesday will consider a business battle over trademark rights for screws that has been in the courts for more than 16 years, an extreme example of how cases headed for the high court can be matters of endurance. . . . The average age for a high court case is nearly six years, but 37% of cases have taken longer since 2009. In most circumstances a case can spend at least three to four years in the courts before resulting in a high-court ruling.

The process to get a case heard at the high court is a true test of endurance, and the willingness to wait the time period in order to get the issue resolved in these courts.

The cost of legal fees overtime can add up to high numbers, and is one of the reasons people involved in the case can get emotional. The article states, “ Given the time and money litigants put into cases, emotions can run high by the time the Supreme Court gets involved. That is true in the long-running trademark case before the court this week.” There isn’t a specific reason that cases take so long to be heard in the Supreme Court, but it’s just that some rulings for appeals happen to take a while. Criminal cases are considered more important, and so if a civil case arises during the same time as a criminal matter, the civil case will have to wait.

The Supreme Court only sits 9 times out of the year, and if a case lands on the right timing of when the court sits, that case is likely to be heard quicker than if it landed during off season. If one needs a case to be heard in Supreme Court, I suggest he or she has the time, money, and endurance to wait his or her turn.

Ovais is a business administration major with a concentration in management at Montclair State University, Class of 2015.

Bank of America reached a settlement with federal prosecutors over the sale of mortgage-backed securities in the run-up to the 2008 financial crisis.  BofA will pay 10 billion cash and about 7 billion in consumer aid.  Most of BofA’s trouble is inherited from its purchase of Countrywide Financial.  BofA was charged with misrepresenting the quality of loans it sold to investors.

BofA sold residential mortgages from borrowers who were unlikely able to repay their loans; yet, these securities were promoted as safe investments.  Subsequently, the housing market collapsed and investors suffered billions of dollars in losses.

The consumer aid component should come in the form of reducing the principal on loans BofA knows it cannot recover in full.  This is one of the “consumer-friendly” activities BofA can engage in order to achieve “credits.” Credits consist of a multiple for each dollar spent on each form of consumer relief.  Critics claim that because of credits, tax write-offs, and “other tricks” the fines paid by banks who break the law are worth only a fraction of the amount.

Posted by Tiffany Zapata.

Wells Fargo is the most recent bank to get caught in the act of predatory lending. The bank was accused in court filings of targeting minorities, such as black and Latino borrowers, for more costly home loans in comparison to whites. The acts took place in Cook County, Illinois, with a population of about 5 million. The case was filed in Chicago federal court.

The bank’s strategies encompassed home-loan origination, refinancing, and foreclosure. Their main concentration was equity stripping. Equity stripping is asset based lending which maximizes lender profit and makes it nearly impossible for the borrower to pay it off due to onerous loan terms. Before getting caught, the bank got away with 26,000 loans. The court order called for 300 million dollars in money damages.

Tom Goyda, a spokesman for the San Francisco-based Wells Fargo stated: “It’s disappointing they chose to pursue a lawsuit against Wells Fargo rather than collaborate together to help borrowers and home owners in the county,’’ Goyda said. “We stand behind our record as a fair and responsible lender.”

Wells Fargo is also currently involved in a lawsuit with the federal government due to its mortgage lending. This is not the first time courts have seen these sorts of acts from banks. Miami and Los Angeles filed similar suits alleging banks were “red-lining” minorities to block loans and for not informing investors on the status of the mortgages that were sold.

Wells Fargo ended up wining the lawsuit brought by the City of Miami in July. The City claimed Wells Fargo sold predatory mortgages in neighborhoods immersed with minorities before the “housing bubble burst.” The judge decided the City was not qualified to file these claims under the Fair Housing Act. The decision is being appealed.

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

Posted by Melissa Nomani.

Lawsuits filed against Lumber Liquidators claim that homeowners who put certain laminate flooring into their home are being exposed to high levels of formaldehyde. This puts them at risk and also lowers the value of their property. As of this July, the number of lawsuits filed against the company has gone up from only a mere ten in June. Many lawsuits began being filed after a 60 Minutes episode that aired on March 1, 2015, exposing the high levels of formaldehyde in laminated flooring made in China. Formaldehyde is a known carcinogen and has been linked to cancer and respiratory problems. A study done by 60 Minutes showed that 30 out of 31 of the tested flooring samples (all of the sample were Lumber Liquidators products).

According to a study conducted by 60 Minutes, 30 of 31 flooring samples from Lumber Liquidators did not meet formaldehyde emissions standards. It is estimated that thousands of people have Lumber Liquidators flooring in their homes. Some lawsuits claim that homeowners have suffered from respiratory problems after installing the laminate flooring.

Another issue that has risen is that Lumber Liquidators is being accused of false advertising and selling products comprised of particles that come from endangered habitats and trees. The US Department of Justice is investigating the company for their alleged use of wood. The wood was illegally cut down from Russia–this directly violates the Lacey Act. The Lacey Act does not allow for the importation of products made from woods that are illegally logged.

Furthermore, this past May, Lumber Liquidators CEO, Robert Lynch, resigned. During this month the company also announced that it would be suspending the sale of flooring from China. The company offered homeowners free  indoor air quality screening, if they had purchased laminate flooring from China.

The number of lawsuits against Lumber Liquidators continues to grow.

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