Several states have statutes that make it a crime to refuse to take a breathalyzer if suspected of driving under the influence. Some states, like New Jersey, make refusal a civil offense. The High Court is reviewing statutes in North Dakota and Minnesota that make it a crime for people suspected of drunken driving to refuse to take alcohol tests. Drivers prosecuted under those laws claim they violate the Fourth Amendment’s prohibition on unreasonable searches and seizures.

The justices questioned lawyers representing the states as to why police cannot be required to get a telephonic warrant every time they want a driver to take an alcohol test. “Justice Stephen Breyer pointed to statistics showing that it takes an average of only five minutes to get a warrant over the phone in Wyoming and 15 minutes to get one in Montana.”  However, this may not be correct.

“Kathryn Keena, a county prosecutor representing Minnesota, suggested some rural areas may have only one judge on call, making it too burdensome to seek a warrant every time. She said even if a warrant were procured, a driver could still refuse to take the test and face lesser charges for obstruction of a warrant than for violating drunken driving test laws.”

Telephonic warrants have also been the rule in New Jersey since 2009. Recently, the New Jersey Supreme Court reversed itself, reverting back to the federal standard requiring police to obtain a warrant after establishing they have probable cause. Under the more stringent standard of using telephonic warrants, police were complaining it took to long to reach a judge. Police also used consent forms they carried, causing an outcry from the defense bar that such a practice may lead to further abuses. Justice Anthony Kennedy said the states are asking for “an extraordinary exception” to the warrant rule by making it a crime for drivers to assert their constitutional rights.

The problem for the states is that without the threat of a refusal penalty, the only proof available at trial as to whether someone was intoxicated while driving is the observations made by police. Observations, however, cannot prove blood alcohol level.

Posted by Patrick Osadebe. 

On September 17, 2014, a federal judge sentenced Timothy Cromer, a former Detroit public library official, to 10 years in prison for bribery and conspiracy to commit bribery. He was charged for accepting more than $1.4 million in bribes from contractors of the library.

Timothy Cromer, 46, was the chief administrative and technology officer for the Detroit library from 2006 to 2103. Cromer helped James Henley set up a company called “Core Consulting and Professional Services.” Cromer then made it possible for the company to win the bid to provide information technology in the library.

Cromer also collected kickbacks from another individual who was charged in the indictment. All of these crimes took place between 2008 and 2011. Hearn and Henley both plead guilty to the charges and are currently awaiting sentencing on October 28, 2014.

Patrick is a finance major at Montclair State University, Class of 2016.

Bank of America (“BofA”) recently settled with the U.S. Consumer Financial Protection Bureau and Office of the Comptroller of the Currency for deceptive credit-card practices.  BofA is ordered to pay $727 million in refunds to customers and $45 million in penalties.

The allegations were BofA induced customers to purchase certain add-ons, such as identity-theft protection, debt cancellation, credit monitoring and credit reporting services.  Some services were superfluous since they were already mandatory under federal law. Others were never received by the customer.

The allegations included BofA defrauded 1.4 million customers through “deceptive marketing” practices, and about 1.9 million customers were illegally charged for credit monitoring and credit reporting services that were not provided.

Richard Cordray, Director of Consumer Financial Protection Bureau, stated, “Bank of America both deceived consumers and unfairly billed consumers for services not performed.  We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

In class, students learn about bribery of public officials and its criminal penalties. Bribery can also be an ethics violation. Generally, public officials are prohibited from accepting gifts in relation to their official duties. Both federal and state governments have fashioned rules regarding acceptance of gifts and these rules can extend to family members.

In Section III of the New Jersey Uniform Ethics Code, for example, it states that no state officer or employee “shall accept any gift, favor, service or other thing of value related in any way to the State official’s public duties.” The same holds true for federal judges. Under the Regulations of the Judicial Conference of the United States under Title III of the Ethics Reform Act of 1989 Concerning Gifts, judges “shall not accept a gift from anyone who is seeking official action from or doing business with the court . . . .”

But there are exceptions to the rules and each one has to be carefully construed. Some, like the New Jersey Uniform Ethics Code, will permit certain “gifts or benefits of trivial or nominal value” as long as the gift “does not create an impression of a conflict of interest or a violation of the public trust.” Other codes may provide a dollar-limit. For example, the “Regulations” for federal judges above provide that gifts having “an aggregate market value of $50 or less per occasion” are permitted “provided that the aggregate market value of individual gifts accepted from any one person . . . shall not exceed $100 in a calendar year.”

Common sense is the foundation of these rules. If the gift has the appearance of impropriety, it is better to graciously decline it.

Posted by Mike Bocchino.

Tom Brady has been accused of knowing about his team deflating footballs in the 2015 AFC championship game against the Indianapolis Colts. The footballs’ air pressure had been significantly reduced to a point where other players could tell the difference. The NFL commissioner, Roger Goodell, investigated and suspended Brady for knowing about the tampering of the footballs. Brady fought the suspension in federal district court and his lawyers persuaded the judge. He ruled that Brady did not need to serve his suspension because it was an unfair punishment for just being accused of knowing about the deflation.

The commissioner then took the case to the court of appeals where they did not look at the facts of whether or not Brady deflated the ball, but rather whether or not Goodell was able to cast such a punishment on a player. They looked solely at whether Goodell, as arbitrator, acted in the spirit of the collective bargaining agreement. Judges Barrington Daniels Parker Jr. and Denny Chin wrote in their opinion, “We hold that the commissioner properly exercised this broad discretion under the collective bargaining agreement and that his procedural rulings were properly grounded in that agreement and did not deprive Brady of fundamental fairness. Accordingly, we reverse the judgment of the district court and remand with instructions to confirm the award.”

Basically they agree that the commissioner acted on the powers which he, the league, and the players union had all agreed upon in 2011. So those of you out there saying that Goodell has too much power, the players agreed to what he can and cannot do. Plus, the tampering of footballs is cheating and this is not the first time that Brady had been caught cheating, never mind countless times that he did not get caught. It was only a matter of time.

But overall, the court of appeals did a great job looking at whether or not Roger Goodell stepped over the line or acted within his range of duties and whether or not it was the best interest of the league, which it was.

Mike is business administration major with a concentration in finance at the Feliciano School of Business, Montclair State University, Class of 2018.

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 Michael Larkin.

When one checks into a hotel, one would expect to have their information stored in a company’s database, but one would not expect that database to get compromised. Wyndham Worldwide Corporation was using a property management system that stored customer’s names, addresses, and credit card number. On three separate occasions in 2008 and 2009, Wyndham was hacked and this information was pulled off of over 600,000 accounts. Damage was approximately $10.6 million and the Federal Trade Commission (FTC) brought Wyndham to trial.

Even though Wyndham was the company that got hacked, it was the customers who got hurt and that is why the FTC filed against Wyndham. The FTC argued that the hacks were caused due the very limited security that the management system used. It was found that the credit card numbers could easily be read, passwords were easy to guess, and a firewall was not deployed along with various other issues. Wyndham argued that the FTC had no right to file a suit against them and that the unfairness and deception claims were not sufficiently validated. It was founded that Wyndham didn’t provide a fair system for its customers and the court required the company to change in order to protect its customers. Mainly, Wyndham needs a more comprehensive security program in order to protect account information and also conduct annual information security audits and maintain a safeguard for its servers.

This case was a matter of protection and privacy for the company’s customers. A customer is providing personal information in order to engage in business so Wyndham has a duty to protect that information. Having a higher security will ensure that hackers will not be able to breach the system and steal information. The FTC won the trial, and in doing so, made sure that a company had a high security to protect the customers.

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

Sources:

FTC v. Wyndham Worldwide Corp.

Verdict From: https://www.ftc.gov/news-events/press-releases/2015/12/wyndham-settles-ftc-charges-it-unfairly-placed-consumers-payment

Posted by Nadia Haddad.

Throughout the article, “Intellectual Property,” the author Darren Dahl talks about four different common fallacies that small business is unaware. The two most precious resources for any small business owner are time and money. Small business owners believe that it is not worth the time or effort to secure intellectual property rights. A patent can cost up to $25,000 to secure, in comparison to trademarks and Web addresses, which are cheap and can be obtained with the help of a lawyer.

In one case, Daniel Lubetzky, chief executive of New York City, Kind Snacks, heard that one of his competitors had copied the packaging, look, and feel of his bars. Lubetzky had secured components for his property like trademarks, trade dress, and Web addresses after founding his company. Mr. Lubetzky sent a competitor that was stealing his IP a cease-and-desist letter in order to stop the offender.

The above example stresses the erroneous belief that “once I get a trademark, my brand is safe.” In another case, Tracey Deschaine, who runs a restaurant called Dixie Picnic in Ocean City, N.J., secured trademarks, logo and name of her signature item, cupcakes. Even though she had trademarks for her business, someone else was monitoring the activity on the United States Patents and Trademark Office’s website and her spotted her application. They secured the Web address, or URL, before she could. This shows that, just because you have a trademark, it does not mean you are completely protected.

The third topic mentioned was about how “having a patent gives me the right to produce something.” What a patent does is gives you the right to prevent someone else from producing what your patent covers. Mr. Kocher of Cryptography Research says, “having a strong IP position helps ensure that other pay you for your innovation like they would on a toll on a road.” (Dahl).

Another fallacy mentioned is “If I have a patent or trademark in the United States, I don’t need to worry about the rest of the world.” In some countries, like Japan, it is expensive to acquire patents. The author suggested when deciding what your international IP strategy should be, consult a lawyer, and conduct some cost-benefit analysis to see if expanding your IP rights makes proper sense.

The last fallacy the article states “people who collect patents but don’t actually make anything are ‘patent trolls.’” In many cases, companies invent something, obtain a patent, and license it out for manufacturing by another. An example described was how a patent for wireless e-mail delivery held by NTP, a small holding company, something that R.I.M eventually would pay millions of dollars to license from them. The problem with this was NTP was trying to enforce its patent when it did notmake any products itself from the beginning.

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

Hacking into computer systems is nothing new, and government and businesses alike have always been aware that they must be one step ahead of computer criminals. But the attack on Sony Pictures Entertainment was more than that. It was a shot across the bow in what appears to be a potentially rampant future form of warfare. As a result, every cyber attack on government or business systems must now be carefully examined to see whether it is either criminal or an act of war.

In the face of evidence from the FBI that North Korea was responsible for the Sony attack, senior Republican senators disagree with the administration that it was only a form of “cybervandalism.” Sen. McCain stated this attack “is a new form of warfare, and we have to counter that form of warfare with a better form of warfare.” Sen. Lindsey Graham called “the cyberhacking ‘an act of terrorism’ and suggested re-imposing sanctions on North Korea and adding the country to the terrorism list.” In 2001, President George W. Bush called North Korea part of the “Axis of Evil,” along with Iran and Iraq.

The FBI concluded the attack on Sony was evidenced by IP addresses directly linked to North Korea. This attack was similar to those that occurred last year against South Korean banks and media outlets. The FBI stated:

We are deeply concerned about the destructive nature of this attack on a private sector entity and the ordinary citizens who worked there. . . . Further, North Korea’s attack on SPE reaffirms that cyber threats pose one of the gravest national security dangers to the United States. Though the FBI has seen a wide variety and increasing number of cyber intrusions, the destructive nature of this attack, coupled with its coercive nature, sets it apart.

North Korea’s actions were intended to inflict significant harm on a U.S. business and suppress the right of American citizens to express themselves. Such acts of intimidation fall outside the bounds of acceptable state behavior.

There will most likely be more cooperation between business and government in sharing information and technology. Only together can this new threat to our national security and economy be defeated.

A district court judge has ordered Apple to unlock a cell phone used by one of the shooters in the California massacre. Apple is fighting the order, claiming that doing so could make it easier to for anyone to hack into phones.

Apple has secret keys that can open up the software that it will not give to the FBI. The FBI also wants Apple to create a program that will permit it to hack into phones at anytime. The problem lies with a toggle in “Settings” that will make the phone delete all information on it if someone fails to put in the right passcode more than 10 times. This would make it impossible for the FBI to use a program that can guess random codes.

The case has Fourth Amendment implications for various reasons, including conscripting a private entity to become a government agent.

Posted by Bridget Uribe.

During the summer of 2015, one of the world’s most known Japanese companies broke headlines as a top accounting scandal. Investigators found the company was overstating operating profits by at least 151.8 billion yen ($1.2 billion in U.S. dollars) between the years of 2008 and 2014. Their accounting problems primarily began from company employees understating costs on long-term projects, according to an investigation by a former top prosecutor in Japan.

The investigation also cited issues with improperly valued inventory also as the cause for the enormous overstatement of operating profits. Details of the scandal emerged when an independent investigative panel released a report describing, “Toshiba CEOs put intense pressure on subordinates to meet sales targets after the 2008 global recession.” The investigative report revealed that the CEOs did not directly instruct anyone to cook the books but rather placed immense pressure on subordinates and waited for the corporate culture to turn out the results they wanted. The investigative panel also pointed out that the weak corporate governance and a poorly functioning system of internal controls at every level of the Toshiba conglomerate didn’t mitigate or stop the inappropriate behaviors. Internal controls in the finance division, the corporate auditing division, the risk management division, and in the securities disclosure committee were not functioning properly. The accounting misconduct began under CEO Atsutoshi Nishida in 2008 due to the global financial crisis that immensely lowered Toshiba’s profitability. It continued unabated under the next CEO, Norio Sasaki, and eventually ended in scandal under Tanaka. Toshiba CEO Hisao Tanaka announced his resignation, in light of the scandal.

It has been four months since the scandal broke headlines and much new information has come to light. Since then, Toshiba has amended and restated those losses as to being more than $1.9 billion. As a consequence of the scandal, the Tokyo Stock Exchange has already designated Toshiba’s shares as “securities on alert” and fined the company $760,000 for “undermining the confidence of shareholders and investors.” In addition, Toshiba also faces the possibility of lawsuits from angry shareholders in Japan who have seen the company’s share price tumble.

Such action is already being taken in the United States, where an investor has filed a class-action lawsuit against Toshiba in June. The Rosen Law Firm representing the plaintiff has called for other Toshiba shareholders to join the suit. Despite the consequences Toshiba is facing, the one burning question has yet to be solved. Who did this? How did all this came about? How could their fraud be maintained for so long, and who should take direct responsibility?

Bridget is a graduate forensic accounting student at the Feliciano School of Business, Montclair State University, Class of 2016.