The Justice Department charged fourteen people, including nine current or former FIFA figures and five sports marketing professionals, for allegedly “‘foster[ing] a culture of corruption and greed that created an uneven playing field for the biggest sport in the world,’” FBI Director James Comey said. The government alleged racketeering and corruption involving more than $150 million in bribes and kickbacks spanning two decades.

“The investigation grew out of allegations of payoffs to officials who decided where to hold the next two World Cups, the biggest international event in sports, that landed the games in Russia for 2018 and Qatar in 2022, according to three senior U.S. law enforcement officials. The U.S. was runner-up to Qatar’s win.”

FIFA appears to be relieved with the indictments. In a statement posted on its website, it said it “welcomes actions that can help contribute to rooting out any wrongdoing in football.”  FIFA further said, “We are pleased to see that the investigation is being energetically pursued for the good of football and believe that it will help reinforce measures that FIFA has already taken.”

The Clinton Foundation is under scrutiny for accepting money from FIFA and Qatar.  “In 2014, the Qatar 2022 Supreme Committee, set up by the Qatar government to ensure a successful FIFA world cup, awarded the Clinton Foundation between $250,000 and $500,000; the State of Qatar donated between $1 million and $5 million.”  According to the Clinton Foundation website, the money was for “research and development for sustainable infrastructure at the 2022 FIFA World Cup to improve food security in Qatar, the Middle East, and other arid and water-stressed regions throughout the world.”

Cell phone video capability is commonplace now, and police in New Jersey are getting used to it. Experts claim that under the First Amendment recording police in plain view is protected. A police officer may not seize a cell phone, delete anything on it, or even demand that the person turn it over to him without a warrant. As long as the person is not truly interfering with a police investigation, they can record as much as they want.

Robert W. Fox, president of the New Jersey State Fraternal Order of Police, stated police should face the fact that cell phone cameras are a reality.  “‘We tell our officers out there . . . that, anything they do, consider themselves being filmed,’” Fox said. “‘No matter where you are anymore, there is some sort of video on the incident – whether it comes from a building camera or an individual cellphone or things like that.’” Arguably, the videos not only protect citizens but also the police from being falsely accused. For most police, video recording should not matter, because they are doing things by the book anyway.

It should be noted that cell phone videos may not capture everything that is taking place during a police encounter. Therefore, rushing to judgment against police would be unfair.

Posted by Jen Suarez.

On April 6th, 2015, Phi Kappa Psi at University of Virginia announced that it is taking legal action against Rolling Stone Magazine for falsely accusing them of gang rape. Columbia Journalism School Review stated the magazine “acted recklessly and defamed the chapter’s members” by publishing this “shock narrative” and as a result the fraternity house has been vandalized. A police investigation was started but was suspended due to lack of evidence after two weeks.

The woman who wrote the article, only identified as “Jackie,” claimed to be the victim of this gang rape. Rolling Stone magazine vowed to analyze their practices and remove the article, which has been viewed by millions, but publisher Jann S. Wenner refused to fire anyone for this obvious case of bad journalism. The fraternity stated, “The reporter in question not only failed to apologize to members of Phi Kappa Psi, but doesn’t even acknowledge the three witnesses she quoted in the article but never interviewed.” This controversy has damaged the school’s reputation, sparked protests, and hurt efforts to fight sexual violence. Rolling Stone Managing Editor, Will Dana, and author, Sabrina Rubin Erdely, have both apologized but the school and fraternity are still waiting for a sincere apology from corporate and for those responsible for this serious fault to be reprimanded.

Libel is the defamation by written or printed words, pictures, spoken words, or gestures. It is also defined as malicious and damaging misrepresentation. We have all seen ignorant comments on the Internet from people all over the world. They say inaccurate and hurtful things because they can hide behind a keyboard and these vicious comments can be very damaging to the reputation of the individual and company. They cry out “Freedom of Speech!” but they aren’t exercising their rights; they are intentionally trying to bring the target into ridicule, hatred, scorn or contempt of others. Defamation is considered a civil wrong and is cause for a lawsuit for damages. In many cases, the target must be able to prove that the statements published were a lie. In this case, however, there is overwhelming lack of evidence and inaccurate information.

Jen is a business administration major with a concentration in management at Montclair State University, Class of 2017.

A New Jersey appellate court recently ruled in James v. Ruiz that testifying experts cannot bolster their opinions by piggybacking or “bootstrapping” the written conclusions of other experts who are not testifying in court.

The Sixth Amendment of the U.S. Constitution protects the right of the accused to confront witnesses against him, thereby excluding hearsay from a case. Hearsay is testimony from a witness who relays information to a jury from a second-hand witness. Hearsay is considered unreliable because the witness who supposedly said the statement is not present in court to be subject to cross-examination.

To illustrate how this works, imagine a case where counsel is trying to prove that Peter was in New York at the time of a robbery. Counsel asks a witness on the stand whether Patrick told him that Peter was in New York in order to place Peter in New York at that time. This is an out-of-court statement made to prove the truth of the matter asserted (that Peter was in New York), and therefore, cannot be cross-examined by opposing counsel because Patrick is not in court. As a result of scenarios like this, rules of court have been crafted to prevent juries from considering hearsay statements in both criminal and civil cases.

Under Federal Rule 703, “an expert may base an opinion on facts or data in the case that the expert has been made aware of or personally observed.” New Jersey has adopted Rule 703 and takes a strict view on what constitutes personal observance. For example, while certain medical records can be admitted under the business records exception to the hearsay rule, if those records contain medical opinions regarding a complex medical condition, then under the recent decision in James, they cannot be referenced by a testifying witnesses as a consistent (or non-consistent) opinion to his opinion, unless the testifying expert relied on those opinions for his or her own “personal” findings. The witnesses relied upon must be testifying as well. Therefore, simply rubber-stamping one’s own opinion based on a non-testifying expert’s opinion, is bootstrapping and violative of Rule 703.

Together with the business records exception and Rule 703, New Jersey also has Rule 808, which has no federal analog. Under N.J.R.E. 808:

Expert opinion which is included in an admissible hearsay statement shall be excluded if the declarant has not been produced as a witness unless the trial judge finds that the circumstances involved in rendering the opinion, including the motive, duty, and interest of the declarant, whether litigation was contemplated by the declarant, the complexity of the subject matter, and the likelihood of accuracy of the opinion, tend to establish its trustworthiness.

Thus, there are times when a non-testifying expert’s opinion can be permitted, but the trial judge must evaluate the expert’s motives, duty, and interest in giving the opinion; whether they had litigation in mind at the time of the opinion; the complexity of the subject matter; and whether the opinion is accurate. If the opinion regards something that is complex and contested in the lawsuit, the opinion will not be permitted under Rule 808. If it is an uncontested opinion or something insignificant, then it will more than likely be admitted.

There is a line drawn between facts and data, which any expert can discuss, provided that they are relied upon by other experts in the field, and expert opinions. And again, non-testifying expert opinions cannot be admitted unless the testifying expert relied upon those opinions in his analysis of the case and will be testifying. According to the court, “[i]f the requirements of Rule 808 are met, and a testifying expert has reasonably relied upon the non-testifying expert’s opinions, then the testifying expert may be permitted to refer to that absent expert’s opinions in the course of explaining his or her own opinions in court.”  The court continued: “However, this pathway should not be used as a ‘subterfuge to allow an expert to bolster the expert testimony by reference to other opinions of experts not testifying.’”

The bottom line is testifying experts cannot be used as a conduit to admit non-testifying expert testimony. This applies especially to bootstrapping “net opinions” in this manner. In addition to the constitutional issues raised here, doing so is simply unfair. If a plaintiff has an expert who is testifying against the defendant’s expert with an opposite opinion, then permitting the bootstrapping of a non-expert’s opinion is like having two experts against one in front of the jury for the price of one.

Posted by Robert Santos.

Usually when people go on vacation, they come home with a souvenir of some sort such as a hat or refrigerator magnet. Lauren Guerra will be going home with a little more than a silly souvenir–in fact she will be going home with 3.5 million dollars. This will be a trip to remember for Guerra but not in the way one would want. Although Guerra will be going home a very rich woman, the damage that has been done is something that all the money in the world couldn’t fix.

On October 27, 2013, Lauren Guerra was one of the many passengers on the Star Line Tours of Hollywood bus giving a tour to passengers of Hollywood. These buses are popular and very well known for they give tours of the famous locations in California, and are known for the unique design of not having a roof but a open deck level for tourists to have a better view of sites and take better pictures. Unfortunately this would be Guerra’s biggest regret, for while aboard one of these buses, a tree branch flew into her face leaving her permanently disfigured. She immediately sued the company after hearing of another death on the same type of bus under the same company. In July 2014, and has been in a back and forth battle since then.

The court battle was vigorous and both sides seemed to have fair arguments. Mark Cunningham who is the attorney for the Starline Bus Company argued that Guerra was at fault because she was standing while the bus was in motion and also was drinking prior to being on the bus. Brian Kabateck, who is Guerra’s attorney, responded by admitting his client did indeed have a drink or two before entering the bus. But there was no way anyone could of avoided this injury, sober or not. Guerra’s attorney argued Star Line could have done more to prevent the situation such as having a worker on the second level of the bus, and also having individuals scout to see what type of environment the bus routes consisted of before actually allowing the buses on them. After a day-long discussion among jurors, the court finally awarded Guerra a settlement of 3.5 million dollars.

Something says that whether you weigh the negatives or the positives, Guerra will never forget this vacation.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Robert Santos.

It seems that multiple companies are beginning to merge in an attempt for one company to make a larger profit and the other company to remain alive. Some companies tend to merge in order to both strengthen their profits and publicity. In this specific case, these companies merged in order to create a better and more powerful drug that could be beneficial and a game changer for individuals who suffer from multiple sclerosis. Or so it seemed. Unfortunately for these French companies, there well planned venture did not go as planned.

In 2011, a giant French pharmaceutical company known as Sanofi acquired Genzyme, a small biotech company based in Cambridge, Massachusetts. Sanofi paid 20 billion dollars for the company, and although that seems a bit much for a small-time company, Genzyme was making strides to create a powerful and promising treatment to multiple sclerosis called Lemtrada. It seemed like a good deal that would not only benefit the two companies but the world as well.

Unfortunately things did not turn out for the best with this venture between the two companies. It turned out that Sanofi was developing their own treatment to multiple sclerosis. The drug is called Aubagio and would have been a competitor against Lemtrada. Sanofli was faced with a dilemma: they could have followed F.D.A regulations and worked to seek approval for Lemtrada, or finish working on Aubagio. The only catch would be that by focusing on Lemtrada, Sonafli would have to give additional payments to the Genzyme rights holders in the estimate of 3.8 billion dollars. Of course Sonafli choose the latter option and focused on their drug without the right holders of Genzyme knowing, and now a lawsuit has been issued.

A lawsuit was filed against Sonafli by Genzyme rights holders under the claim that Sonafli failed to fulfil its obligations under their deal. Because of this, the individuals who invested in Genzyme have not received the money owed to them in a sum of 708 million dollars. The lawsuit claims Sonafli may have taken it upon themselves to slow the approval of Lemtrada through the F.D.A in order to avoid having to pay the right holders of Genzyme, while the approval of Sonafli’s drug Aubagio was an easier process and did not have as much difficulty of being approved as Lemtrada did. It has already been noted by F.D.A officials that the time process for Lemtrada to be approved took longer than it should have, therefore, it already seems that Sofali is in the wrong.

Unfortunately, this is a case where the wellbeing of individuals is outweighed by the possibility of profit. If what Genzyme is claiming is true, we would have been witness to another company thinking about their pockets before the health of many. Considering the impact these drugs could have had on the lives of the somewhat 2.3 million people in the world who suffer from multiple sclerosis, it is a sad thing to see money interrupting the process of progress. Hopefully, we see some agreement and it happens as fast as possible so these companies can go back to focusing on what’s important, and that’s saving a life.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Deane Franco.

In a recent article posted in the Wall Street Journal, I read about General Motors being charged with punitive damages due to a defective part causing multiple deaths. General motors had been in the process of recalling millions of vehicles, when a defective ignition switch caused 100 or so deaths.

The punitive damages will be limited to the extent of a lawsuit based on claims and knowledge that GM had of a new company auto maker’s 2009 restructuring. GM attempted to prevent plaintiffs for bringing punitive damages based on personal injury or wrongful death. Unfortunately for GM, Robert Hilliard who is representing all those injured by GM feels that punitive damages “are the only way to properly compensate victims who have been harmed by defect.” This is because punitive damages are meant to be a large enough punishment to the corporation to send a notable message with the intent of assuring the corporation understands its wrong doing.

Although GM tried to fight the punitive damages, the plaintiffs won outright. What this means for GM is that punitive damages could reach millions or even billions of dollars awarded to those affected, depending on the ruling, previous defective GM part cases may also be included.

GM has already paid $935 million in damages and has also agreed to $625 million in compensation for the victims. But we will see if the court will stop there. Moreover, GM is being considered for additional charges because they had acknowledged that they mislead regulators about the defective car parts and still put them into production. The hairy part, however, comes in when GM addresses their bankruptcy filing, because technically, “Old GM” filed for bankruptcy and would be responsible for all these defective parts liabilities and, “New GM,” the product of the bankruptcy reorganization, is a new company separate from the actions of the old.

This article relates to the discussion post this week in class where we discussed the hot coffee spill in Liebeck vs. McDonalds. In that situation, punitive damages were used not necessarily as a fair compensation to the victim, but to ensure McDonald’s knew of its intentional wrong doing and would be more likely to halt such procedures.

The pricing of the punitive damages was said to be very important for Mr. Hillard because he knows that those damages tend to run very high and would lead to fair compensation for the victim’s losses. This is a little different from the Liebeck case, because in that case, there appeared to be dual responsibility as to   both the temperature and the spilling of coffee; in this GM case, all responsibility falls on the manufacturer for selling a defective car which caused death to numerous victims. It does not matter that GM has rebranded itself after going through bankruptcy filings.  At this point in time, there may be products on the market that have not been recalled, which caused injury and or death to numerous victims. For these reasons, the punitive damages should be high to balance out the victim’s loss and GM’s punishment.

Deane is a member of the The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, and a finance and information technology management major, Class of 2018.

Posted by Abigail Anaemeje. 

Yet, another automobile scandal! In September, the Environmental Protection Agency found that Volkswagen sold 482,000 cars in the U.S. that contained a “defeat device.” This type of software was used in diesel engines, “that could detect when they were being tested, changing the performance accordingly to improve results.” The result of this led to the “engines emitting nitrogen oxide pollutants 40 times above what is allowed in the US.” In addition, in November of this year, Volkswagen also found irregularities of carbon dioxide emissions levels in about 800,000 cars in Europe. In response to the emission-cheating scandal, Volkswagen has acknowledge their failure. As a result, they will have to pay a fine to the EPA of $37,500 for every vehicle that goes against the allowed standards.

This issue has not only effected the U.S. and Europe, but also France, South Korea, the UK, Italy, Canada, and Germany. In total, 500,000 cars in the U.S., 2.4 million in Germany, and 1.2 million cars in the U.K. have been recalled as a result of the emissions scandal. So far, no employees have been directly fired over the incident. However, the management board member and the head of sales and marketing, Christina Klingler is leaving the company on an unrelated issue.

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

Posted by Abigail Anaemeje.

In September of this year, a settlement was finally reached involving GM and their issue involving small- car ignition switches. In the last year, the company has had to recall over 2.6 million of their older cars to replace defective switches that, “shuts off the engine and disables power-assisted steering, power brakes and the air bags.” Such problems have been found in models such as the Saturn Ion and Chevrolet Cobalt. This deadly case drew even more attention when it was the cause of at least 124 deaths and 275 injuries. GM, the Detroit automaker, admits that, “some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year.” After hiring a federal prosecutor, Anton Valukas, he discovered that there has been no wrongdoing made by the top executives. However, in light of the incident, 15 employees of GM have been fired for falling to act in correcting the issue.

Overall, GM Motors will have to pay a wire fraud charge of $900 million in a late prosecution agreement. As for the families who have lost their loved ones, each will receive at least $1 million. In addition, $625 million has been set aside to compensate people who will agree with the settlement. Ironically, this case occurred a year after Toyota was caught hiding information about its defects that caused similar outcomes. Since it was much severe, Toyota agreed to pay a penalty of $1.2 billion; making it the largest penalty enforced on an automobile company.

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

Posted by Yasmine Miller.

Around the time of July, 2015 Whole Foods was being sued for misleading sugar claims. Shoppers of Whole Foods were angry when discovering that the evaporated cane juice is actually sugar. The company has built their popular reputation on only selling foods that are supposed to be healthier than the foods that you would get in local grocery store. Whole Foods has been fighting against their allegations in the misleading and false advertisements on their cookies.

According to the article “The plaintiffs allege that Whole Foods called sugar “evaporated cane juice” on the label of its Gluten Free All Natural Nutmeal Raisin Cookies in an attempt to make consumers believe that the cookies do not contain as much sugar as they in fact contain.” Further, still today Whole Foods denies the claims in the Missouri lawsuit. “In their filing in support of this motion, they argue that no reasonable customer could have been led, by the label on its cookies, to believe that the product didn’t contain sugar.”

Whole Foods mislead their customers by conceiving them that their healthy snack (cookies) weren’t as healthy as everyone thought. The company mislead and falsely advertised their cookies and violated laws that are in place to protect clients from being misled about products and or services. From my understanding, businesses are not allowed to make statements that lead to incorrect impressions.

Whole Foods violated the Code of Conduct in Business for their deception and dishonesty towards their customers. A code of conduct (also known as the code ethics) provides employees with guidance for handling difficult ethnical situations related to the business. Whole Foods definitely violated this conduct.

Yasmine is a psychology major at Seton Hall University, Class of 2017.

Posted by Leonardo Terzulli.

Two new cases that have just arose, DraftKings and FanDuel, two one-day fantasy sports websites that guarantee immediate cash payouts, have been banned in the state of New York. New York’s Attorney General Eric Schneiderman, sent a cease-and-desist letter earlier this past week accusing FanDuel and DraftKings to be considered illegal gambling. This whole debate started over news that had been circulating that an employee who worked for DraftKings won $350,000 in a contest on the website. There were allegations that the employee had inside information that was used to help him win the contest. DraftKings response to the allegation was “the information was only available after player lineups had been locked in.” Both companies claim that employees are banned from participating in competition on the website, and failed to check-up on internal controls.

Both DraftKings and FanDuel have chose to file lawsuits feeling that the Attorney General wasn’t fair in his cease-and-desist order. “The two companies made separate filings that asked the New York Supreme Court to throw out Schneiderman’s order. In its lawsuit, DraftKings argued that Schneiderman’s cease-and-desist order is unconstitutional, saying the Attorney General acted as ‘judge, jury and executioner.’”

While there are already a few states that have prohibited daily sports, I feel that this case is really going to be contingent on the employee who violated the rules and lack of check-up on the internal control in the companies.

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

Posted by Leonardo Terzulli.

McDonald’s has recently been involved in a case of a customer, Lynn Gipson, having hot water spill on her at a McDonald’s drive-through. The incident happened in 2012 when a cup’s lid popped off, “spilling the scalding water and causing second-degree burns on Ms. Gipson’s thigh and stomach,” a quote from the court documents. This incident is similar to the 1994 incident when Stella Liebeck sued McDonald’s in the case Liebeck v. McDonald’s Restaurants in which a top to a coffee lid came off in between Liebeck’s legs causing severe burn injuries with resulted in skin grafting. The turnout for this case was Liebeck was awarded $2.86 million. Gipson is alleging that McDonald’s drive-through employees delivered tea and other hot liquid substances in a negligent matter.

Unlike the case the in 1994, McDonald’s is most likely opting to not take the case to court and settle. The turnout for the 1994 case ended in the jury calling for McDonald’s to pay punitive damages. Knowing that they have faced a few court cases already this year, and that they will probably lose this case again, they feel the best choice for them is to just settle with Gipson’s terms. Although the case is still not fully resolved, it is safe to say that McDonald’s is going to lose. Similar to the 1994 case, this is a case that might seem a little obscure but, Lynn Gipson exerted all of her options, taking into account all actions by both parties, and taking the educated step to ensure she was given justice.

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

Posted by Ryan Neligan.

Human beings have a natural tendency to expand upon whatever the present is. In America, pilgrims settled in the state of Massachusetts and eventually expanded all the way to California. This trend of expanding continues today, as now people look forward to what is beyond Earth: Outer Space. This week Congress has passed a bill called the Space Act of 2015, which will help the small business of asteroid mining become an official operation.

The resources that are in outer space could be quite valuable to our world for the future. There are so many things untouched out there and in such great supply. In the past, “the prospect of large scale extraction of minerals from other planets or cosmic bodies has been both technologically and legally questionable, with starry-eyed entrepreneurs hard at work on the first part, but without much guidance on the second” (Good Magazine). Our civilization has not had the knowledge or technology in order to make obtaining a vast amount of resources from outer space an appropriate business. That has changed in current day though, as technology has made leaps forward in progress of this venture, and now to is officially about to become legitimate. With the passing of the Act, the business of space mining could boom into a full blown industry in the market, for “this lays the legal groundwork for private businesses to own extra-planetary resources, as well as sell their goods back on Earth” (Good Magazine). Huge potential is seen for space mining. Businesses are waiting for the new act to become official so they can jump into the extraterrestrial world of space mining and make as profit off of it.

The Space Act of 2015 is not yet complete to be used, but it is laying the foundation to open up endless possibilities that reach far beyond he extant of this world. Humans continue to expand the horizons that are in front of them, and this act would put them in the galaxies.

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

Posted by Ryan Neligan.

Earlier in the month, the state of New York banned the use of Fanduel and Draftkings, both websites in which people use to bet on daily fantasy sports. These websites are run daily in which people place down money and compete against each other in order to see who the best judge of sports is, and the winner acquires a large sum of money from those people who took place in the game. Games like this take place all over the world through these websites and have instantly gained a great amount of popularity.

The attention it is getting from the population has caused some heads to turn, such as the state government of New York. It has seen these websites as illegal gambling taking place within the state, and New York’s attorney general is set on shutting down this business. FanDuel and DraftKings are not going down without a fight though, as “the two biggest daily fantasy sports sites are taking on Eric Schneiderman in court, accusing him in lawsuits of bullying and abusing his powers in ordering that they stop operations in New York and are seeking a judge’s order to let them keep operating” (BloombergBusiness). To lose the participation of New York would be a huge blow for these two businesses, because New York accounts for “more than $1 billion each and have drawn investors across the sports, media and venture-capital industries. The state accounts for 5 percent of FanDuel’s customers and more than 7 percent for DraftKings, according to the companies’ filings” (BloombergBusienss).

Fanduel and DraftKings are taking action and are filing suit against this banning, for they do not see their business as an illegal online gambling site. They see it as a game of skill and knowledge in sports. Fanduel stated in its complaint about the case that “Such a shutdown would deprive hundreds of thousands of subscribing New Yorkers of the opportunity to pit their skills against the skills of others in selecting a ‘fantasy’ team of athletes from different sports teams and competing in contests offering prizes to the players whose fantasy teams perform best” (BloombergBusiness).

The case can be made for both sides of the argument. These websites are definitely a test of skill in the area of sports just like when people play regular Fantasy games, but it can also be seen as a website used for gambling and requiring money online, which is illegal in the state of New York. If these website continuing operating, the attorney general will take action and put chargers against these companies. The people of New York will be watching this case closely to see what the final outcome is, but for now daily fantasy sports has been banned from the state.

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

Posted by Robert Santos.

Usually when people go on vacation, they come home with a souvenir of some sort such as a hat or refrigerator magnet. Lauren Guerra will be going home with a little more than a silly souvenir–in fact she will be going home with 3.5 million dollars. This will be a trip to remember for Guerra but not in the way one would want. Although Guerra will be going home a very rich woman, the damage that has been done is something that all the money in the world couldn’t fix.

On October 27, 2013, Lauren Guerra was one of the many passengers on the Star Line Tours of Hollywood bus giving a tour to passengers of Hollywood. These buses are popular and very well known for they give tours of the famous locations in California, and are known for the unique design of not having a roof but a open deck level for tourists to have a better view of sites and take better pictures. Unfortunately this would be Guerra’s biggest regret, for while aboard one of these buses, a tree branch flew into her face leaving her permanently disfigured. She immediately sued the company after hearing of another death on the same type of bus under the same company. In July 2014, and has been in a back and forth battle since then.

The court battle was vigorous and both sides seemed to have fair arguments. Mark Cunningham who is the attorney for the Starline Bus Company argued that Guerra was at fault because she was standing while the bus was in motion and also was drinking prior to being on the bus. Brian Kabateck, who is Guerra’s attorney, responded by admitting his client did indeed have a drink or two before entering the bus. But there was no way anyone could of avoided this injury, sober or not. Guerra’s attorney argued Star Line could have done more to prevent the situation such as having a worker on the second level of the bus, and also having individuals scout to see what type of environment the bus routes consisted of before actually allowing the buses on them. After a day-long discussion among jurors, the court finally awarded Guerra a settlement of 3.5 million dollars.

Something says that whether you weigh the negatives or the positives, Guerra will never forget this vacation.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Robert Santos.

It seems that multiple companies are beginning to merge in an attempt for one company to make a larger profit and the other company to remain alive. Some companies tend to merge in order to both strengthen their profits and publicity. In this specific case, these companies merged in order to create a better and more powerful drug that could be beneficial and a game changer for individuals who suffer from multiple sclerosis. Or so it seemed. Unfortunately for these French companies, there well planned venture did not go as planned.

In 2011, a giant French pharmaceutical company known as Sanofi acquired Genzyme, a small biotech company based in Cambridge, Massachusetts. Sanofi paid 20 billion dollars for the company, and although that seems a bit much for a small-time company, Genzyme was making strides to create a powerful and promising treatment to multiple sclerosis called Lemtrada. It seemed like a good deal that would not only benefit the two companies but the world as well.

Unfortunately things did not turn out for the best with this venture between the two companies. It turned out that Sanofi was developing their own treatment to multiple sclerosis. The drug is called Aubagio and would have been a competitor against Lemtrada. Sanofli was faced with a dilemma: they could have followed F.D.A regulations and worked to seek approval for Lemtrada, or finish working on Aubagio. The only catch would be that by focusing on Lemtrada, Sonafli would have to give additional payments to the Genzyme rights holders in the estimate of 3.8 billion dollars. Of course Sonafli choose the latter option and focused on their drug without the right holders of Genzyme knowing, and now a lawsuit has been issued.

A lawsuit was filed against Sonafli by Genzyme rights holders under the claim that Sonafli failed to fulfil its obligations under their deal. Because of this, the individuals who invested in Genzyme have not received the money owed to them in a sum of 708 million dollars. The lawsuit claims Sonafli may have taken it upon themselves to slow the approval of Lemtrada through the F.D.A in order to avoid having to pay the right holders of Genzyme, while the approval of Sonafli’s drug Aubagio was an easier process and did not have as much difficulty of being approved as Lemtrada did. It has already been noted by F.D.A officials that the time process for Lemtrada to be approved took longer than it should have, therefore, it already seems that Sofali is in the wrong.

Unfortunately, this is a case where the wellbeing of individuals is outweighed by the possibility of profit. If what Genzyme is claiming is true, we would have been witness to another company thinking about their pockets before the health of many. Considering the impact these drugs could have had on the lives of the somewhat 2.3 million people in the world who suffer from multiple sclerosis, it is a sad thing to see money interrupting the process of progress. Hopefully, we see some agreement and it happens as fast as possible so these companies can go back to focusing on what’s important, and that’s saving a life.

Robert is a philosophy major at Seton Hall University, Class of 2016.

Posted by Deane Franco.

In a recent article posted in the Wall Street Journal, I read about General Motors being charged with punitive damages due to a defective part causing multiple deaths. General motors had been in the process of recalling millions of vehicles, when a defective ignition switch caused 100 or so deaths.

The punitive damages will be limited to the extent of a lawsuit based on claims and knowledge that GM had of a new company auto maker’s 2009 restructuring. GM attempted to prevent plaintiffs for bringing punitive damages based on personal injury or wrongful death. Unfortunately for GM, Robert Hilliard who is representing all those injured by GM feels that punitive damages “are the only way to properly compensate victims who have been harmed by defect.” This is because punitive damages are meant to be a large enough punishment to the corporation to send a notable message with the intent of assuring the corporation understands its wrong doing.

Although GM tried to fight the punitive damages, the plaintiffs won outright. What this means for GM is that punitive damages could reach millions or even billions of dollars awarded to those affected, depending on the ruling, previous defective GM part cases may also be included.

GM has already paid $935 million in damages and has also agreed to $625 million in compensation for the victims. But we will see if the court will stop there. Moreover, GM is being considered for additional charges because they had acknowledged that they mislead regulators about the defective car parts and still put them into production. The hairy part, however, comes in when GM addresses their bankruptcy filing, because technically, “Old GM” filed for bankruptcy and would be responsible for all these defective parts liabilities and, “New GM,” the product of the bankruptcy reorganization, is a new company separate from the actions of the old.

This article relates to the discussion post this week in class where we discussed the hot coffee spill in Liebeck vs. McDonalds. In that situation, punitive damages were used not necessarily as a fair compensation to the victim, but to ensure McDonald’s knew of its intentional wrong doing and would be more likely to halt such procedures.

The pricing of the punitive damages was said to be very important for Mr. Hillard because he knows that those damages tend to run very high and would lead to fair compensation for the victim’s losses. This is a little different from the Liebeck case, because in that case, there appeared to be dual responsibility as to   both the temperature and the spilling of coffee; in this GM case, all responsibility falls on the manufacturer for selling a defective car which caused death to numerous victims. It does not matter that GM has rebranded itself after going through bankruptcy filings.  At this point in time, there may be products on the market that have not been recalled, which caused injury and or death to numerous victims. For these reasons, the punitive damages should be high to balance out the victim’s loss and GM’s punishment.

Deane is a member of the The Gerald P. Buccino ’63 Center for Leadership Development at the Stillman School of Business, Seton Hall University, and a finance and information technology management major, Class of 2018.

Posted by Abigail Anaemeje. 

Yet, another automobile scandal! In September, the Environmental Protection Agency found that Volkswagen sold 482,000 cars in the U.S. that contained a “defeat device.” This type of software was used in diesel engines, “that could detect when they were being tested, changing the performance accordingly to improve results.” The result of this led to the “engines emitting nitrogen oxide pollutants 40 times above what is allowed in the US.” In addition, in November of this year, Volkswagen also found irregularities of carbon dioxide emissions levels in about 800,000 cars in Europe. In response to the emission-cheating scandal, Volkswagen has acknowledge their failure. As a result, they will have to pay a fine to the EPA of $37,500 for every vehicle that goes against the allowed standards.

This issue has not only effected the U.S. and Europe, but also France, South Korea, the UK, Italy, Canada, and Germany. In total, 500,000 cars in the U.S., 2.4 million in Germany, and 1.2 million cars in the U.K. have been recalled as a result of the emissions scandal. So far, no employees have been directly fired over the incident. However, the management board member and the head of sales and marketing, Christina Klingler is leaving the company on an unrelated issue.

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

Posted by Abigail Anaemeje.

In September of this year, a settlement was finally reached involving GM and their issue involving small- car ignition switches. In the last year, the company has had to recall over 2.6 million of their older cars to replace defective switches that, “shuts off the engine and disables power-assisted steering, power brakes and the air bags.” Such problems have been found in models such as the Saturn Ion and Chevrolet Cobalt. This deadly case drew even more attention when it was the cause of at least 124 deaths and 275 injuries. GM, the Detroit automaker, admits that, “some of its employees knew about the problem for more than a decade, but no cars were recalled until early last year.” After hiring a federal prosecutor, Anton Valukas, he discovered that there has been no wrongdoing made by the top executives. However, in light of the incident, 15 employees of GM have been fired for falling to act in correcting the issue.

Overall, GM Motors will have to pay a wire fraud charge of $900 million in a late prosecution agreement. As for the families who have lost their loved ones, each will receive at least $1 million. In addition, $625 million has been set aside to compensate people who will agree with the settlement. Ironically, this case occurred a year after Toyota was caught hiding information about its defects that caused similar outcomes. Since it was much severe, Toyota agreed to pay a penalty of $1.2 billion; making it the largest penalty enforced on an automobile company.

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

Posted by Yasmine Miller.

Around the time of July, 2015 Whole Foods was being sued for misleading sugar claims. Shoppers of Whole Foods were angry when discovering that the evaporated cane juice is actually sugar. The company has built their popular reputation on only selling foods that are supposed to be healthier than the foods that you would get in local grocery store. Whole Foods has been fighting against their allegations in the misleading and false advertisements on their cookies.

According to the article “The plaintiffs allege that Whole Foods called sugar “evaporated cane juice” on the label of its Gluten Free All Natural Nutmeal Raisin Cookies in an attempt to make consumers believe that the cookies do not contain as much sugar as they in fact contain.” Further, still today Whole Foods denies the claims in the Missouri lawsuit. “In their filing in support of this motion, they argue that no reasonable customer could have been led, by the label on its cookies, to believe that the product didn’t contain sugar.”

Whole Foods mislead their customers by conceiving them that their healthy snack (cookies) weren’t as healthy as everyone thought. The company mislead and falsely advertised their cookies and violated laws that are in place to protect clients from being misled about products and or services. From my understanding, businesses are not allowed to make statements that lead to incorrect impressions.

Whole Foods violated the Code of Conduct in Business for their deception and dishonesty towards their customers. A code of conduct (also known as the code ethics) provides employees with guidance for handling difficult ethnical situations related to the business. Whole Foods definitely violated this conduct.

Yasmine is a psychology major at Seton Hall University, Class of 2017.

Posted by Leonardo Terzulli.

Two new cases that have just arose, DraftKings and FanDuel, two one-day fantasy sports websites that guarantee immediate cash payouts, have been banned in the state of New York. New York’s Attorney General Eric Schneiderman, sent a cease-and-desist letter earlier this past week accusing FanDuel and DraftKings to be considered illegal gambling. This whole debate started over news that had been circulating that an employee who worked for DraftKings won $350,000 in a contest on the website. There were allegations that the employee had inside information that was used to help him win the contest. DraftKings response to the allegation was “the information was only available after player lineups had been locked in.” Both companies claim that employees are banned from participating in competition on the website, and failed to check-up on internal controls.

Both DraftKings and FanDuel have chose to file lawsuits feeling that the Attorney General wasn’t fair in his cease-and-desist order. “The two companies made separate filings that asked the New York Supreme Court to throw out Schneiderman’s order. In its lawsuit, DraftKings argued that Schneiderman’s cease-and-desist order is unconstitutional, saying the Attorney General acted as ‘judge, jury and executioner.’”

While there are already a few states that have prohibited daily sports, I feel that this case is really going to be contingent on the employee who violated the rules and lack of check-up on the internal control in the companies.

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

Posted by Leonardo Terzulli.

McDonald’s has recently been involved in a case of a customer, Lynn Gipson, having hot water spill on her at a McDonald’s drive-through. The incident happened in 2012 when a cup’s lid popped off, “spilling the scalding water and causing second-degree burns on Ms. Gipson’s thigh and stomach,” a quote from the court documents. This incident is similar to the 1994 incident when Stella Liebeck sued McDonald’s in the case Liebeck v. McDonald’s Restaurants in which a top to a coffee lid came off in between Liebeck’s legs causing severe burn injuries with resulted in skin grafting. The turnout for this case was Liebeck was awarded $2.86 million. Gipson is alleging that McDonald’s drive-through employees delivered tea and other hot liquid substances in a negligent matter.

Unlike the case the in 1994, McDonald’s is most likely opting to not take the case to court and settle. The turnout for the 1994 case ended in the jury calling for McDonald’s to pay punitive damages. Knowing that they have faced a few court cases already this year, and that they will probably lose this case again, they feel the best choice for them is to just settle with Gipson’s terms. Although the case is still not fully resolved, it is safe to say that McDonald’s is going to lose. Similar to the 1994 case, this is a case that might seem a little obscure but, Lynn Gipson exerted all of her options, taking into account all actions by both parties, and taking the educated step to ensure she was given justice.

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

Posted by Ryan Neligan.

Human beings have a natural tendency to expand upon whatever the present is. In America, pilgrims settled in the state of Massachusetts and eventually expanded all the way to California. This trend of expanding continues today, as now people look forward to what is beyond Earth: Outer Space. This week Congress has passed a bill called the Space Act of 2015, which will help the small business of asteroid mining become an official operation.

The resources that are in outer space could be quite valuable to our world for the future. There are so many things untouched out there and in such great supply. In the past, “the prospect of large scale extraction of minerals from other planets or cosmic bodies has been both technologically and legally questionable, with starry-eyed entrepreneurs hard at work on the first part, but without much guidance on the second” (Good Magazine). Our civilization has not had the knowledge or technology in order to make obtaining a vast amount of resources from outer space an appropriate business. That has changed in current day though, as technology has made leaps forward in progress of this venture, and now to is officially about to become legitimate. With the passing of the Act, the business of space mining could boom into a full blown industry in the market, for “this lays the legal groundwork for private businesses to own extra-planetary resources, as well as sell their goods back on Earth” (Good Magazine). Huge potential is seen for space mining. Businesses are waiting for the new act to become official so they can jump into the extraterrestrial world of space mining and make as profit off of it.

The Space Act of 2015 is not yet complete to be used, but it is laying the foundation to open up endless possibilities that reach far beyond he extant of this world. Humans continue to expand the horizons that are in front of them, and this act would put them in the galaxies.

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

Posted by Ryan Neligan.

Earlier in the month, the state of New York banned the use of Fanduel and Draftkings, both websites in which people use to bet on daily fantasy sports. These websites are run daily in which people place down money and compete against each other in order to see who the best judge of sports is, and the winner acquires a large sum of money from those people who took place in the game. Games like this take place all over the world through these websites and have instantly gained a great amount of popularity.

The attention it is getting from the population has caused some heads to turn, such as the state government of New York. It has seen these websites as illegal gambling taking place within the state, and New York’s attorney general is set on shutting down this business. FanDuel and DraftKings are not going down without a fight though, as “the two biggest daily fantasy sports sites are taking on Eric Schneiderman in court, accusing him in lawsuits of bullying and abusing his powers in ordering that they stop operations in New York and are seeking a judge’s order to let them keep operating” (BloombergBusiness). To lose the participation of New York would be a huge blow for these two businesses, because New York accounts for “more than $1 billion each and have drawn investors across the sports, media and venture-capital industries. The state accounts for 5 percent of FanDuel’s customers and more than 7 percent for DraftKings, according to the companies’ filings” (BloombergBusienss).

Fanduel and DraftKings are taking action and are filing suit against this banning, for they do not see their business as an illegal online gambling site. They see it as a game of skill and knowledge in sports. Fanduel stated in its complaint about the case that “Such a shutdown would deprive hundreds of thousands of subscribing New Yorkers of the opportunity to pit their skills against the skills of others in selecting a ‘fantasy’ team of athletes from different sports teams and competing in contests offering prizes to the players whose fantasy teams perform best” (BloombergBusiness).

The case can be made for both sides of the argument. These websites are definitely a test of skill in the area of sports just like when people play regular Fantasy games, but it can also be seen as a website used for gambling and requiring money online, which is illegal in the state of New York. If these website continuing operating, the attorney general will take action and put chargers against these companies. The people of New York will be watching this case closely to see what the final outcome is, but for now daily fantasy sports has been banned from the state.

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

Posted by Kieran Tonero.

Throughout the last four years many scammers have taken advantage of homeowners and business owners who lost properties during Superstorm Sandy.  State officials have reported that scams that relate to Superstorm Sandy total $20 million.  Many residents in Ocean County have been affected by Sandy-related fraud.   The Ocean County Prosecutor’s Office has prosecuted more than 50 cases.  Many of the cases involved contractors who took advantage of people that were looking to rebuild their houses and businesses.  Some schemes that have been investigated so far include contractors that have not registered with the Division of Community Affairs and contractors that have taken money and failed to finish or even start jobs.

One of the most prominent cases in Ocean County involved a couple who owned two repair businesses.  The couple was charged with “…taking more than $1 million from storm victims and using the money to gamble or buy luxury items instead of making the repairs” (Spoto).  The couple was charged with theft by failure to make required disposition of property, money laundering, misconduct by a corporate official, tampering with public records, filing a fraudulent tax return, failure to file a tax return and failure to pay tax. The state attorney General Christopher Porrino said that “…20 owners paid the couple and their companies more than $1 million to repair, elevate, or rebuild their homes but work was either never started or abandoned in mid-stream” (Spoto).  It is truly remarkable that many of these contractors took advantage of people after one of the worst storms in the history of the tri state area.

At last, another case that got attention for Hurricane Sandy fraud involved an Ocean County motel owner who falsely claimed he provided refuge to Hurricane Sandy victims in the aftermath of the storm.  Sandipkumar Patel admitted that he took $81,567 from the Federal Emergency Management Agency.  The money from FEMA was meant to provide transitional housing for storm victims.  According to the article Patel billed the federal government for housing 11 people in the wake of the storm.  The state investigation found that eight of those people never stayed there while the three others were there for a shorter time than Patel claimed.  Patel also used names of family members who were found to be not displaced by the storm.  Patel will serve three years in prison while pleading guilty to second-degree theft by deception.  Patel has also paid full restitution.

Kieran is a graduate accounting student with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University.

Posted by Leandro Iglesias.

The article “There Should be No Special Deal for Tax-Evading Cameco,” written by Murray Dobin describes Cameco, a Canadian based uranium mining colossus, that is currently facing charges in Federal Court by the Canada Revenue Agency for avoiding $2.2 billion in Canadian income taxes. As the article states, this case has been delayed for years and the fact that it has finally made it before a judge is good news. However, as we discussed in class, a lot of these forensic cases end up with companies settling and individuals are usually not held responsible. Because of that, it is important that Cameco’s case does not follow the same path, and that Cameco is held responsible for all its wrongdoings and not allowed to settle for any less. Cameco has been so arrogant in its tax avoidance, that it does not even bother to justify their tax planning and just states that they are following relevant laws and regulations. In order to bring attention to off-shore tax havens and to stop companies from abusing such tactics, Canada needs to make an example of Cameco.

As the article states, Cameco’s tax avoidance started in 1999, where they drafter Cameco drafted a 17-year uranium supply agreement at a fixed price of $10 a pound. In 1999, $10 a pound was the reasonable market value. However, as you can imagine, over the 17-year period it is obvious that price would change. As Dobin notes, “That world price went to almost $140 a pound in 2007 and is now around $35.” In order to understand the problem with the above scenario, we need to mention that the Canada corporate income tax is 27%, compared to the 10% tax rate in Switzerland. By the transfer pricing agreement, Cameco was paying Canadian income tax on revenue up to that $10 threshold, but any revenue above that was being paid in Switzerland, at a much lower 10% tax rate. As stated above, prices increased substantially from the 1999 market value, and so Cameco was benefiting of this transfer pricing agreement. The reason why this is a big deal is because the uranium was in Canada, and most of the uranium was also sold in Canada. Cameco would purposely sell its uranium at a lower $10 price to its subsidiary in Switzerland, and then recognize any revenue above $10 in Switzerland instead of in Canada, in order to avoid paying a higher Canadian income tax rate. However, as noted, an insignificant amount of revenues was actually coming from Europe.

This case sheds light on the intriguing topic of transfer pricing. Although Cameco is not a known company in the US, this case relates to the current news on Apple. Apple is facing a US$15 billion tax bill from the European Commission for its abuse of transfer pricing in Ireland. Many companies use transfer pricing to avoid paying higher taxes, which is not illegal. However, Cameco’s revenue is not generated in Switzerland, and they have no full-time employees or even an office location in Europe. Dobin states, “Virtually all the substantive work was performed in Canada. All of the uranium is mined in Canada, all of Cameco’s sales are negotiated and completed in Canada, and literally all of its profits are generated in Canada. The company’s scheme is pure scam which is why fair-tax activists in Saskatchewan call the company Scameco.”

There are ways in which transfer pricing can legally be used to decrease their tax burden, however companies are not allowed to create operations in foreign countries with the sole purpose of tax avoidance. As the article states, there is no operating business reason for Cameco to be in Europe; they neither mine uranium there or make sales abroad. The sole purpose of Cameco in Europe is tax evasion, and as a result they should be found guilty of tax evasion.

Finally, I found this article intriguing because it relates to topics we discussed in our “Legal Issues” class, and also in our Forensic Accounting class. Transfer pricing is just one of the ways in which corporations are boosting their profits, and loop-holes will always exist, hence why tax law and accounting law is always changing. Because of this reason, I believe the demand for forensic accountants is increasingly growing. Furthermore, when cases like Cameco are brought up, they usually all end up the same way, with corporations settling with the Government. I think it is important for corporations and individuals to be held responsible for their wrongdoings, and until that happens, corporations will keep on believing they can get away with it. Forensic accountants should play a bigger role in discovering and investigating cases like the one described in this article.

Leandro is a graduate accounting student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Posted by Heidy Sanchez.

Chipotle Mexican Grill, is an fast casual restaurant which is known for specializing tacos and burritos. Their priority is to serve fresh organic food by hand nationwide, yet things took a drastic change after they announced their temporary closure. The E-coli controversy began in August 2015, when more than 200 people were sickened with norovirus after eating at one of its restaurants, according to the article Every Day’s a Safety Drill as Chipotle Woos Customers Back written by Stephanie Strom. This incident lead to another 64 people, who were affected with salmonella poisoning. Yet it was not until November, when the Chipotle company announced it had closed a string of stores across the Pacific Northwest because of E. coli contamination. Chipotle Mexican Grill took drastic measures to ensure the safety of their food to their customers in order to keep their reputation intact as well as their profits.

Strom states that more than 2,000 Chipotle’s Mexican restaurants were forced to use a digital kitchen timer, which gave employees a regular reminder every 30 minutes to wash their hands in order to prevent any similar problems in the future. The company established a new position of “food safety leader” to ensure that workers followed the orders and suggestion of Dr. Marsden, a food safety expert that Chipotle hired. Dr. Marsden long history of dealing with food-safety crises allowed him to create an innovative idea that would permit managers to check workers every morning for illnesses, to regularly check the temperature of food, to removing any possible contamination of the vegetables used in the restaurant. These procedures included drizzling chopped tomatoes, onions, jalapeno and avocados in citrus juices after they were immersed in hot water to kill germs on their peels, and rinsing and draining the lettuce and later submerge it in a vinegar solution. Dr. Marsden suggested marinating the chicken in the evenings to reduce risk of contamination. Chipotle’s efforts have been slowly paying off. “Robert Gravani, who teaches food safety at Cornell University, said what he had heard about what Chipotle was doing under Dr. Marsden’s direction seemed good (Strom).”

Chipotle’s controversial E-Coli caused their reputation and sales to decline and they have managed to work through this issue by creating innovative ideas. According to Strom  “Some sales have returned, but more slowly than investors expected, and shares have fallen 45 percent in the last year.” This ultimately lead to the company’s bad reputation amongst customers, not to mention the decline in stock prices. Overall, Chipotle has  managed to enhance food safety among its suppliers in order regain public’s confidence as well as their profits. Although, it is currently safe to eat Chipotle now, I would have stopped eating it  during the E-Coli controversy. Chipotle has currently recovered and their efforts to bring back their clients and increase sales are now paying off.

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

Source:

Posted by Ricardo Collado.

One of the most awkward questions you can be asked in a job interview is “What are you salary requirements?” or “How much are you making in your current job?”. Massachusetts has become the first state to bar employers from asking about applicants’ salaries before offering them a job. The new law will require hiring managers to state a compensation figure upfront, based on what an applicant’s worth is to the company, rather than on what he or she made in a previous position.

Massachusetts governor Charlie Baker signed a law, which goes into effect on July 1, 2018. The pay disparity between men and women is still pronounced nationwide, even the size of the gap is in dispute. This bill is being pushed  as a model for others states, as the issue of men historically outearning women who do the same job has leapt onto the national political scene. A new research from career site Glassdoor, which analyzed pay by job title at individual companies, said women earned 94.6 cents for every dollar earned by men in the same positons. Also the law will require equal pay not just for workers whose jobs are alike, but also for those whose work is of “comparable character” or who work in “comparable operations.” Workers with more seniority will still be permitted to earn higher pay, but the law effectively broadens the definition of what is equal work.

“I think very few businesses consciously discriminate, but they need to become aware of it,” said State Senator Pat Jehlen, a Democrat and one of the bill’s cosponsors. “These are things that don’t just affect one job; it keeps women’s wages down over their entire lifetime.” For example if  you are in a job interview and a hiring manager asks you how much you make or how much you are looking for, Sethi, HR consultant, says you should say something like, “You know what, I’m happy to discuss money down the road, but right now I’m just trying to see if there’s a good fit for both of us. I’m sure you’re trying to do the same thing.”

Massachusetts joins at least 12 other states that already require companies to let employees compare notes about how much are paid. Massachusetts has created a new wave, not only to close wage gaps but to lower poverty rates and create a stronger economy for our country as a whole.                                                                       

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

Sources:

New York Times, http://nyti.ms/2aKzR5c

Business Insider, http://www.businessinsider.com/massachusetts-equal-pay-law-2016-8

Quartz, http://qz.com/749476/massachusetts-salary-history-job-interviews/

Posted by Karolina Staron.

A lawsuit was brought against Dannon Company, Inc for falsely advertising their yogurt brand. Dannon Company for years has claimed their popular product to be the healthiest on the market, ultimately pricing higher than competitors. Stating that daily consumption of the yogurt will reduce occurrences of colds and strengthen individual’s immune system. Consumers profoundly believed in the advertising, willing to pay a higher price.

One individual, however, challenged those claims. Trish Wiener suffered with digestive problems, the consumption of the yogurt that guaranteed digestive system improvements was intended to aid with the discomfort. Inspire of this, with time the yogurt failed to relieve the daily burden and Wiener began to question the accuracy of the advertisement.  “In its ads for the yogurts Dannon claims the products use exclusive strains of what are known as probiotic bacteria, [which] are live microorganisms, usually bacteria, similar to the beneficial ones found in the human digestive system. In the right amounts, they ‘confer a health benefit on the host.’” While, in fact no clinical testing has been accomplished to support the existence of probiotics in the dairy product.

Dannon Company, Inc. although denying any allegations against false advertising, has agreed to settle the Federal Trade Commission law suit. The settlement required acceptance to omit disclosing “scientific proof” benefit of their products. “Claiming that any yogurt, dairy drink, or probiotic food or drink reduces the likelihood of getting a cold or the flu, unless the claim is approved by the Food and Drug Administration.” The Company’s intention behind settling was forgo incurring additional expenses.

In the modern times, busy work schedule and daily tasks often take away time from properly planning meals and force people to rely on quickly obtainable foods. With a busy lifestyle people neglect the need to educate themselves on the quality of products they purchase. If the media states a specific food is beneficial to ingest, the statement is relied upon by the public without further questioning. This is only one case that has been brought to the public’s attention that addresses the topic of food quality and false advertisement. Many of the goods consumed on a daily bases possesses even lower value, yet are an accepted norm.  The lesson taken from this case is to inform ourselves on the supposed benefits of the purchased products, because in truth unless we grow and produce foods ourselves, we won’t know the true ingredients embedded in every product.

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

Sources:

http://abcnews.go.com/Business/dannon-settles-lawsuit/story?id=9950269

https://www.ftc.gov/news-events/press-releases/2010/12/dannon-agrees-drop-exaggerated-health-claims-activia-yogurt

Posted by Nick Contey. 

In the past, Canada’s reputation against fraud has been nothing shy of embarrassing. Their inefficient methodologies created a hole in the financial fraud sector, giving little chance for victims to stand up against the suspects and letting convictions slip away. A perfect example has been the criticism towards the Integrated Market Enforcement Team of the Royal Canadian Mounted Police (RCMP) for not effectively doing their job. Since 2003, there have only been 5 convictions of white-collar criminals despite their annual budget of roughly $40 million. Regardless of Canada’s past performances, the future seems to be a bit more optimistic due to new regulatory and enforcement programs. The new era of their fraud administration aims to focus on developing the three previously inefficient areas, which are enforcement, regulation, and prosecution. It seems that Canada will not stop until they have completely revamped their fraud methodologies, having improvements coming from both federal and provincial bodies.

Since 2012, there have been numerous changes on both the federal and provincial side that give authorities high expectations when it comes to fighting fraud in the future. One federal change came from the RCMP, expanding the mandate of its Commercial Crime Program which allows them to tackle more types of fraud files such as investment fraud, securities fraud, and several more. One provincial change came from the Ontario Securities Commission (OSC) in 2013 where they created a new department called the Joint Serious Offences Team (JSOT). This innovative program creates more collaboration between federal and provincial bodies, giving authorizes a stronger chance of winning their fight against future fraud. The JSOT is a partnership team consisting of the OSC, the RCMP Financial Program, and Ontario Provincial Police Anti-Rackets branch. According the 2015 Annual Report by Ontario Securities Commission, the JSOT executed 69 search warrants, had seven matters under investigation, and commenced 31 cases. “Canada is notably the only G7 economy without a national securities regulator,” (Richdale and Teal, 2016). The lack of a national regulatory establishments has been due to certain Constitutional literature. However, the Supreme Court has been debating on allowing a combined tactic between federal and provincial bodies as long as there are no contradictions to the provincial nature of securities regulations under Constitution. Although it is not officially implemented the Cooperative Capital Markets Regulatory System is the first step in encouraging more collaborative methods against fraud. This system currently consist of British Columbia, Ontario, Saskatchewan, New Brunswick, Prince Edward Island, Yukon, and the federal government.

Ontario has been the leader in the fight against fraud establishing three other changes that have already shown a positive impact, the OSC’s Whistleblower Program, the OSC’s no-contest program, and the increase in litigation funding. Effective July 24, 2016 the program gives whistleblowers the opportunity to receive 15 percent of the total monetary sanctions ordered (a maximum of $1.5 million). Whistleblowers also have the possibility to increase their reward to $5 million if the monetary sanctions exceed $10 million and their participation in the case were a direct result of $1 million or more in monetary sanctions. The no-contest program began in 2014, where its focus is to settle cases without creating an extensive litigation process. “The OSC has already approved a number of ‘no-contest’ settlements, including a large $156.1 million settlement with CI Investments Inc. in February, as well as a $13.5 million settlement with TD Waterhouse and related Entities,” (Brigeeta and Teal, 2016). The process of increasing litigation funding aims to give victims the ability to recover their losses as a result of the committed fraud. This shift showed its true impact in 2012 when the Supreme Court allowed litigation funding for the Livent Inc. v Deloitte & Touche case.  “This funding arrangement ultimately allowed Livent’s receiver to pursue a costly 68-day trial against Deloitte. The trial judge awarded Livent damages in the amount of more than $84 million, (Richdale and Teal, 2016).” While Canada still isn’t considered a heavy hitter in the fraud investigation field, the effects of their recent changes show that their involvement will only get stronger.

Nick is a graduate accounting major with a concentration in Forensic Accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Source:

Richdale, B., & Teal, C. (2016, November/December). Canada fighting fraud with new laws, enforcement. Fraud Magazine, 31(6). http://www.fraud-magazine.com/article.aspx?id=4294994746

Posted by Ryan Borgo.

In 1977, the United States implemented the Foreign Corrupt Practices Act.  This act states that it is a crime to pay another country’s public official for favors.  Since this time many companies have been accused of disobeying this law and as a result were forced to pay a substantial fine or even faced jail time.  The company Embraer, a Brazilian aircraft manufacturer, are currently under scrutiny for violating this act.  The article related to this story by Forbes states “Brazilian aircraft manufacturer Embraer has agreed to pay $205m in fines to authorities in the U.S. and Brazil to settle a bribery investigation involving aircraft sales to Saudi Arabia, Mozambique, the Dominican Republic and India.”  This settlement was announced on October 24^th, 2016.  These bribery payments had been reoccurring throughout the company for many years.  For example, in the article it states “Embraer had paid bribes to a number of government officials and other intermediaries in the four countries and falsified its records in connection with the sale of 16 aircraft in four deals between 2008 and 2011.”  Even though Embraer is a Brazilian company, if you are listed in the U.S (which Embraer was), you will still be subject to obey American corruption laws.

As a result of participating in these bribery transactions, Embraer earned a profit of $84 million dollars.  These bribery deals included a plethora of illegal business transactions.  For example, Embraer paid a government official $3.52 million dollars in the Dominican Republic in order to seal the deal on a contract to sell the Dominican Air Force military aircraft for $92 million dollars.  By offering these officials a bribe it gives Embraer an unfair advantage over its competitors that are looking to do business in the Dominican Republic.  It is also important to note that even if these officials did not accept the bribe, Embraer would still be charged as they still intended to offer the bribe.  These individuals who accepted the bribe were charged due their involvement in these illegal business transactions, as they accepted these bribes when they could have denied them and reported Embraer to the authorities.  In addition, in the following year Embraer “paid an agent $5.76m to secure the sale of three planes to the Indian Air Force for $208m.” As you can clearly see, Embraer has a long history of initiating bribery transactions amongst various countries.

The details of the settlement were highlighted in the article.  “The settlement announced today involves payment of a criminal penalty of $107.3m. In addition, Embraer is paying the SEC $78.2m and Brazilian authorities a further $20m. The investigation was carried out by the US authorities under the U.S. Foreign Corrupt Practices Act.”  Furthermore, the Brazilian Authorities have charged 11 individuals in the Dominican Republic for accepting these bribes offered by Embraer.  The business decisions taken by Embraer over the past years were insufferable and are considered unlawful in accordance with the Foreign Corrupt Practices Act.

It is not fair to other companies within the industry that complied with the law, as they may have lost many business deals as a result of the bribes committed by Embraer.  For instance, Embraer is considered the world’s third largest company in the sector.  However, much of this success may be as a direct result of the bribe transactions that they participated in the past.  Therefore, in my opinion, the other companies in this industry should be compensated as a result of Embraer’s actions.  Due to this settlement, authorities should closely monitor the future business transactions conducted by Embraer to ensure that they are legally sufficient.

Ryan is accounting graduate student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University. 

Posted by Francesca Mecionis.

The owners of America’s Test Kitchen filed a 39-page lawsuit against Christopher Kimball, and some of his other associates, on November 3. According to the suit, Kimball and his accomplices “conspired to literally and conceptually rip off” the Boston TV show. The reason for his actions were said to be for his personal benefit in order to help launch his new brand, Milk Street. There are accusations of “stolen customer lists and trade secrets, sneaky tactics to secure a radio deal, and new office space.” Kimball had a fiduciary responsibility to the show. However, the owners believed he had stolen their entire business model, “right down to how recipes are written,” and also had worked on his own project while still being employed by America’s Test Kitchen.

Kimball, in response to the suit, claims it is “absurd” and “was meant to generate publicity and to shore up the America’s Test Kitchen brand.” Yet, there is proof of his actions in writing. There was a forensic search of his emails, which showed “Kimball’s scrambling to set up his new business before he left the old one, securing copies of his work contacts and packing up his belongings.” In another email, Kimball wrote to his assistant, “Want to get ahead of the partners!” in regards to using the America’s Test Kitchen name to find a new office space for his business.

The lawsuit was issued in the Superior Court of Suffolk County of Massachusetts. The owners are hunting for “unspecified monetary damages, repayment of some of the compensation that America’s Test Kitchen paid Kimball and the people who left with him, and asks the court to prevent him and his new company “from exploiting information, assets and opportunities stolen from America’s Test Kitchen.” Lawyers are arguing that Kimball’s motivation to steal secrets from the show stemmed from when the board and investors pushed him out. In 2013, America’s Test Kitchen’s rating decreased dramatically, and the show responded by hiring a new set of employees. By 2015, a new CE whom outranked Kimball had taken over, and eventually he stopped showing up to work, telling his coworkers “he had been fired.” “Kimball, in an interview Wednesday, cautioned not to read too much into the allegations, saying most were false or twisted interpretations.” His legal team is preparing to go against these accusations, within this month. Hopefully, the truth will be revealed and both parties receive what they deserve.

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

Posted by Paul Della Vecchia.

The recent Bloomberg article “Wal-Mart Balks at Paying $600-Million-Plus in Bribery Case” written by Tom Schoenberg and Matt Robinson, depicts a long standing bribery case Wal-Mart participated in. The article is dated October 6^th, 2016. Wal-Mart is said to have been paying foreign officials in Mexico, India, and China. They did this to take a fast track into getting into those countries. A fast track is speeding up the process to start a business in a country, and it allows them to get their business permits. Wal-Mart reported sales of $482 billion, and $14 billion in profits. In this case alone, “Wal-Mart has already spent $791 million on legal fees and an internal investigation into the alleged payments and to revamp its compliance systems around the world, it said” (Schoenberg and Robinson). These legal fees are starting to add up as the investigation goes longer, but Wal-Mart is not looking to settle. To settle the case, it would be $600 million.

Bribing foreign officials is illegal under the 1977’s Foreign Corrupt Practices Act. Wal-Mart tried to outsmart the system by “Calculating a fine based only on the amount of the alleged bribes, as the department has done in some cases, would yield a lower penalty, they said” (Schoenberg and Robinson). Companies are in the business of making money, and Wal-Mart looked at the pros and cons of this bribery. They believed that they would be able to actually make a profit off breaking the law, and to do that they ran calculations to see whether the fine would outweigh the benefit. Clearly it did not, because they were able to bribe their way to the top, and open more foreign companies. The case is so long standing, because the evidence the officials have is outdated. To work around this, the investigators are trying to look to more recent allocations of bribery from Wal-Mart in Brazil. As each day goes by, evidence becomes more outdated and less reliable. In 2011, “Wal-Mart disclosed possible violations in Mexico to the justice Department and SEC” (Schoenberg and Robinson). There wasn’t much done at the time, and now we fast forward to 2016 and that 5 year old evidence is not looking as clear. So the investigators are beginning to look elsewhere to try and solve this problem. The article also makes reference to attempts to find bribes in China, but to no avail.

Wal-Mart is looking to fight this case, because they are unsure what the criminal charges against them would be. If they decide to settle, the settlement “would rank among the highest levied under 1977’s Foreign Corrupt Practices Act” (Schoenberg and Robinson). The article relates the Wal-Mart case to the similar VimpelCom Ltd. and Siemens AG case. Both cases deal with bribing foreign officers to win business, and both settlements were higher than Wal-Mart. Judging the case off precedent and the increasing costs of legal fees, settlement should be a viable option for Wal-Mart. A company making $14 billion in profits should be able to sponge any damages done by their illegal acts. Wal-Mart does not want to settle, because they are unaware how it would affect their company. The timing is just not right at the moment to be spending the settlement costs, the article alludes to. “Wal-Mart said Thursday that net income for the year through January 2018 will be “relatively flat” as the company invests in its website and mobile app” (Schoenberg and Robinson). So if they have the option to clear their name and spend a little extra money or settle and have their brand slightly tarnished, they are going to fight for now. This way they are able to compete with Amazon in their work on their mobile app and website for online shopping.

Paul is an graduate accounting student with a concentration in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

Posted by Michael Del Piano.

When people hear the word CPA, they think of an accountant that is normally behind a desk working on some taxes. However, this was not the case for Ronald L. Durkin. Durkin was not your ordinary accountant. Instead, he was an FBI agent that was working undercover to establish a business relationship between a crime ring and Durkin’s fake accounting firm. Durkin came into the face of danger early on in his investigation. When he was undercover eating dinner with some of the criminals, he accidentally pulled out his personal credit card to pay the bill. Luckily for him, he was able to get out of it by yelling at the waiter and accusing him of incorrectly charging them. This would not be the last time that Durkin would find himself in danger. On another occasion, Durkin was on SWAT duty and engaged in a fire-fight. After a great carrier, Durkin left the FBI to work in the private sector. Durkin worked for Arthur Andersen and then later was the partner in charge of fraud and misconduct for investigation for KPMG.

Another individual that did not follow the traditional path of traditional accountant was Letha Sparks. Sparks is well-known for her work of investigating a $100 million fraud involving life insurance policies. A&O Resource Managements Ltd.’s owners did not pay the premiums on the life insurance policies. Instead, they used the money to buy fancy cars and multimillion dollar homes.

Generally, people do not see accountants as crime fighters. However, forensic accounting has been widely used to catch white collar criminals. Accounting is one of the five “FBI Special Agent Entry Programs” that qualify an individual for possible employment. In fact, the FBI employs around 700 CPAs as special agents. They even have 600 forensic accountants employed. Another interesting fact is that not all of these forensic accountants that work for the FBI are CPA’s.

CPA’s and accountants greatly help the FBI catch criminals. I personally believe that it is important to let other people know the different kinds of roles that accountants can play. You do not always have to follow the traditional path of accountants and sit behind a desk doing taxes. There are other options available and the world needs forensic accountants to help catch criminals.

Michael is a graduate student in accounting with a certification in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2017.

According to the latest ruling by Second Circuit, the NSA’s collection of massive amounts of phone records violated the US Patriot Act. Although they never reached the constitutional question, the court said that Congress never gave the agency the authority. But Senate Intelligence Committee Chairman Richard Burr, a North Carolina Republican, believes the court had it wrong, and that Section 215, the provision in question, authorizes the NSA to conduct mass collections. The Act is set to expire in a few weeks. Congress will either renew the Act, change it, or eliminate it altogether.

Under Section 215, certain investigators

may make an application for an order requiring the production of any tangible things (including books, records, papers, documents, and other items) for an investigation to protect against international terrorism or clandestine intelligence activities, provided that such investigation of a United States person is not conducted solely upon the basis of activities protected by the first amendment to the Constitution.

The controversy is over the words “any intangible things,” and in other parts of the Act, the words “information likely to be obtained by such installation and use is relevant to an ongoing criminal investigation.” The court agreeing with privacy advocates that the “relevant to an ongoing criminal investigation” language is too broad. Members of Congress, however, believe that the language is necessary to prevent future terrorist attacks. In any event, any phone record seizure must be preceded by a warrant.

The House is set to vote on the USA Freedom Act. The Freedom Act extends the Patriot Act but removes the power of the NSA to collect bulk phone records.

The Federal Reserve has a lot of power over the economy. It is obligated to promote maximum employment and guard against inflation. In the near term, long-term interest rates, which presently are very low, could rise after the Fed raises its benchmark rate. Rates have been hovering near zero since 2008. Yellen is cautious, however, not to take the market by surprise with any change in monetary policy.

In a recent interview, Yellen said equity market valuations are high and warns of “potential dangers.” Yellen said that “she sees risks as moderated and does not see any bubbles forming, though the central bank is watching the issue closely.”

Posted by Stephanie Simms.

In this article, Ruby Tuesday is facing a civil rights lawsuit for discriminating against male job candidates. The government is suing on behalf of, Andrew Herrera, who worked at an Oregon Ruby Tuesday, and Joshua Bell, who worked at a Ruby Tuesday in Republic, Missouri. They were only allowed to work there for a temporary period of time. What makes the situation worse for Ruby Tuesday is they specifically had an internal job posting that stated only girls should apply to their restaurant. The law of discrimination based on gender states that, employers are prohibited from classifying jobs based on gender, unless employer can prove gender is essential to the job.

The government’s Equal Employment Opportunity Commission lawsuit was filed in the federal district court in Oregon. The lawsuit explains how the postings which were passed around to stores within nine states, and their content is a violation to the Equal Opportunity Employment laws from the Civil Rights Acts of 1964 and 1991. EEOC San Francisco Regional Attorney William R. Tamayo stated, “It’s rare to see an explicit example of sex discrimination like Ruby Tuesday’s internal job announcement. . . . This suit is a cautionary tale to employers that sex-based employment decisions are rarely justified and are not consistent with good business judgment.” Everyone is entitled a fair chance when it comes to jobs, because one cannot just tell someone they cannot work somewhere without putting them up to the task. Both of the men say they were denied the opportunity to earn more money because they were not allowed to compete for the jobs.

In the end, Ruby Tuesday hired seven women and no men for the 2013 summer jobs. EEOC’s Seattle Field Office Director, Nancy Sienko said, “[Mr. Herrera] was shocked and angered that Ruby Tuesday would categorically exclude him and other male employees” from a lucrative job. The job announcement was distributed to restaurants located in Oregon, Arizona, Colorado, Iowa, Minnesota, Missouri, Nebraska, Nevada and Utah.

The lawsuit does not indicate exactly how much in damages the men were seeking for the discrimination due to their gender.

Stephanie is business administration with a minor in biology at Montclair State University, Class of 2017.

Posted by Nadia Haddad.

“Intellectual Property law works, until it is stretched.” According to a New York Times article, the problem with intellectual property law is that lawyers try to push the idea of I.P. too far in other areas, like software development, because they believe more the better. The article states that a software patent is a good example of a failed “experiment” because no one today can name a major software innovation whose investments relied on a patent. Some software innovations such as Lotus 1-2-3 spreadsheet, Netscape’s browser, or Google’s search are not responsible for their existence because of a patent. The article mentioned how software patents are expensive, threaten competition, and are occasionally used for accounting fraud.

Intellectual Property plays an important role for all humans in society. In general terms, intellectual property is any product of the human intellect that the law protects from unauthorized use by others. Intellectual property is important because it drives economic growth and competition, as well as creating and supporting high paying jobs.

The mind is the most important thing a human possesses, because that is the root of who you are and what you want to do. We live life through people’s intellectual properties or inventions, which is why we need to protect them.

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

Posted by Taylor Gonzales.

A major issue in the United States is the suffering economy. There are not many jobs to apply for and even those available do not pay enough to support oneself or their family. To counteract this issue, states have opted to give a higher minimum wage. In Seattle, they have chosen to raise it to $11 per hour this year; they are allowing small businesses to adjust to the set price of $15 per hour over six years and larger businesses get two years to rise up to that amount. Such a change may be good in terms of income for employees, yet it offsets the business and their current budget.

A pizza shop in Seattle has to close down because it is considered a large business and is unable to make the adjustment of the high wage hike within two years. Ritu Burnham, the owner of the shop, stated, “I’ve let one person go since April 1[;] I’ve cut hours since April 1[;] I’ve taken them myself because I don’t pay myself,” she says. “I’ve also raised my prices a little bit[;] there’s no other way to do it” (Patel, 2015).

Legislation that enforces minimum wage seems to be aimed to protect people, except business profits should be taken into account as well. One idea is each business have a set wage that is efficient for them to stay open and large enough to support their employees. That wage would be enforced through a contract, and if the potential employee comes to an agreement with their wage proposal, then they will sign and be hired.

Sometimes the government needs to allow businesses to take care of themselves, especially in hopes of bettering the economy.

Taylor is a marketing major at Montclair State University, Class of 2017.

Posted by Taylor Gonzales.

Uber and Lyft have become new technological businesses that have gotten a lot of attention for offering taxi service straight from your phone. An app is required that allows an account to be made, linked to a credit card, where you are able to request a taxi to a certain location to bring you to another one. It is a business, however, that is not the typical taxi service. Any person who needs extra cash can be a driver when requests to the apps are made. However, the article states, “The state regulates for-hire passenger transportation through the Limousines Transportation Act 271 of 1990 and the Michigan Vehicle Code. All vehicles transporting passengers are defined as limousines under the law and must have a commercial license plate. Drivers are required to have a chauffeur’s license” (Oddy, 2015). Yet, in Michigan for-hire drivers are not required to have a chauffer’s license.

Though it is not illegal in the state of Michigan, as a business, they should realize that it does not reach the moral minimum. The law may not require such a license for their for-hire drivers, however, they should realize that this poses risks for their customers, because Uber’s and Lyft’s employees may not be qualified to fulfill the position safely and successfully. Both businesses should have created an ethical code of conduct that should be followed to ensure the upmost excellence of their business procedures and safety of their customers.

There is a contract between the customer and the provider, even with these types of business, and through that contract they should make an adjustment to ensure that each driver is properly trained and has a chauffeur license regardless of state law. In cases like this, it is not so much that they are breaking the law, but rather not running a morally and ethically stable business.

Taylor is a marketing major at Montclair State University, Class of 2017.

Posted by Sukayna Khalifeh.

Spoofing became illegal in 2010 when an amendment stating that “bidding or offering with the intent to cancel the bid or offer before execution” was added to the Commodity Exchange Act. Navinder Singh Sarao was criminally charged for this so-called spoofing, because he was allegedly driving down the price of stocks of Standard & Poor on purpose by making other traders sell their stocks, and then at the last minute, buy those stocks himself and cancel his hoaxed sell orders. He would make a profit after the price came back up and everything goes back to normal. According to the New York Times (Henning), the government also thinks that he was one of the causes that lead to the “flash crash” in May 2010, where the “Dow Jones industrial average dropped nearly 1,000 points in just a few minutes before quickly recovering.” This was proven not to be the case when the blame was actually pinned on Waddell & Reed Financial in 2010 and Sarao was still placing orders after that yet no sudden drops in the market occurred. This proves the government had made the wrong analysis.

Henning brings up a question of whether there is enough proof to call this process a fraud. If it is constituted as one, then Navinder Singh Sarao might have to be deported to Britain by the government. According to the Commodity Futures Trading Commission, since 2009, Sarao had made about $40 million just by spoofing. Sarao counter argues that this is just the way he trades and that he had made this estimated profit within 20 trading days. Henning also describes that the “victims of Mr. Sarao’s orders are not ordinary investors” but they are instead “sophisticated investors who use algorithms that try to predict where the market is headed.” This brings up the fact that these sophisticated or high frequency investors are most likely the ones caught with spoofing charges. So, is this actually affecting or “harming ordinary long-term investors” (Henning)? This type of fraud is still violating the law regardless of who the victims are but according to the New York Times (Henning), these high frequency investors, with their access to data about large orders, could have easily adjusted their algorithms to find out what type of orders Sarao used. In that process, they would not have fell for the scheme.

Also, it is not obligatory that once you enter an order it must be filled. According to the New York Times (Henning), “more than 90 percent [of orders] are estimated to be cancelled.” This is not considered to be spoofing since the order might be filled. Henning views this as an illustration of the “fine line between accepted practices and illegal conduct.”

In order for Sarao to be extradited to Britain, the Justice Department must prove that he had true intention of not filling the order after entering them in. Also, the British court can block this extradition if it “would not be in the interests of justice” (Henning).

According to the New York Times (Henning), this case took the prosecutors six years to put together and will take them a little while longer to find out if Sarao actually committed fraud.

Sukayna is a double major in finance and management, information and technology (MIT), Class of 2017.

Posted by Sukayna Khalifeh.

According to the New York Times (Peter J. Henning), there are no real findings of liability for violations from the cases arising from the 2008 financial crisis. Henning wrote about two cases in particular that were recently resolved but the top managers in the companies were not held liable. One of them involved fraud charges against Freddie Mac’s former chief executive, Richard F. Syron. This case “concluded only with an acknowledgment that no party is the prevailing party” (Henning). This was concluded because there was “no accepted definition of a subprime mortgage,” so there was no way to prove Syron had intentionally given false accounts of loans. The second case was against Ernst & Young, an auditor of Lehman Brothers. They were charged for accounting fraud but reached a settlement with the government for $10 million instead even though Lehman Brothers set off the financial crisis in September 2008 by going bankrupt. It was the largest bankruptcy in American History according to the New York Times (Henning).

Both of these cases were huge contributors to the financial crisis yet the perpetrators still were not held liable for illegal or dishonest behavior. “Management was aware of accounting maneuvers used to make its finances look stronger than they were,” (Henning) yet the Security Exchange Commission still stopped the investigation on Lehman Brothers in 2012. They were not criminally charged nor was any civil action taken.

Henning also wrote about the Financial Institutions Reform, Recovery and Enforcement Act (FIRREA), which is designed to pursue “cases against banks for violations of the mail and wire fraud statutes.” This has been a successful and helpful tool that prosecutors used against JPMorgan Chase, Bank of America and Citigroup. Although this is a powerful tool, it has not been used to hold individuals for violations. Henning implied that the Justice Department should focus more on individuals in the corporation and charge them for misconduct instead of the corporation as a whole. The guilty individuals inside the company should be held liable for wrongdoing.

Sukayna is a double major in finance and management, information and technology (MIT) at Montclair State University, Class of 2017.

Posted by Stephanie Simms.

Over the past decade or so, Congress has created multiple bills with regard to cybersecurity, but sadly made no progress whatsoever. In December 2014, lawmakers along with the President set aside disagreements over the topic of cybersecurity reform and passed the following into law: (1) National Cybersecurity Protection Act (NCPA); (2) Cybersecurity Enhancement Act of 2014 (CEA); (3) Federal Information System Modernization Act of 2014 (FISMA 2014); (4) Cybersecurity Workforce Assessment Act (CWWA); and (5) Border Patrol Agent Pay Reform Act (BPAPRA).

These bills mentioned above generally address federal government departments with respect to cybersecurity. FISMA 2014, is a revision of the Federal Information Security Management Act 0f 2002 (FISMA) and was meant to “provide a framework for the federal government to assess and ensure its information security controls.” The CWWA and BPAPRA handle cybersecurity workforce issues at the Department of Homeland Security (DHS). The NCPA focuses only on promoting “information sharing” between the government and the private sector via DHS. The CEA officially is a bill that is governed-focused, but of all the bills passed in December, “it is the one that may have the biggest chances of causing unintentional effects on private sector organizations.”

Stephanie is business administration with a minor in biology at Montclair State University, Class of 2017.

Posted by Kyle Gatyas.

The US vendor of Chinese flooring products, Lumber Liquidators, has been facing an array of lawsuits ranging from allegations of stock price affectations to defective products. More recently, the company not only failed to meet California’s CARB-2 safety standards, but plaintiffs have also claimed exceeding levels of formaldehyde in their products. On March 5, 2015, a class action lawsuit was filed by John and Tracie-Linn Tyrrell because of certain symptoms they were experiencing shortly after John Tyrrell’s son-in-law installed the laminate flooring. They claimed they began having shortness of breath, weakness, fatigue, and incessant coughing and sneezing (Gibb). The lawsuit stated, “despite repeated medical tests, his doctors have not been able to identify the cause of these symptoms.” (Gibb).

The report aired on CBS News on 60 Minutes; it was said that the reason for higher levels of formaldehyde in their products was used to keep the cost down (Gibb). “According to an interview done by 60 Minutes, the amount of formaldehyde in the products is a serious threat because the toxins can escape into the air, making homeowners extremely ill.” (Gibb). The class action lawsuit permits representing any consumer who purchased the Chinese flooring products in the last four years and has had any medical complications. Reimbursement for the material and installation will also be included as damages in the lawsuit.

Kyle is currently undeclared at Montclair State University, Class of 2017.

Posted by Ricardo Collado.

One of the most awkward questions you can be asked in a job interview is “What are you salary requirements?” or “How much are you making in your current job?”. Massachusetts has become the first state to bar employers from asking about applicants’ salaries before offering them a job. The new law will require hiring managers to state a compensation figure upfront, based on what an applicant’s worth is to the company, rather than on what he or she made in a previous position.

Massachusetts governor Charlie Baker signed a law, which goes into effect on July 1, 2018. The pay disparity between men and women is still pronounced nationwide, even the size of the gap is in dispute. This bill is being pushed  as a model for others states, as the issue of men historically outearning women who do the same job has leapt onto the national political scene. A new research from career site Glassdoor, which analyzed pay by job title at individual companies, said women earned 94.6 cents for every dollar earned by men in the same positons. Also the law will require equal pay not just for workers whose jobs are alike, but also for those whose work is of “comparable character” or who work in “comparable operations.” Workers with more seniority will still be permitted to earn higher pay, but the law effectively broadens the definition of what is equal work.

“I think very few businesses consciously discriminate, but they need to become aware of it,” said State Senator Pat Jehlen, a Democrat and one of the bill’s cosponsors. “These are things that don’t just affect one job; it keeps women’s wages down over their entire lifetime.” For example if  you are in a job interview and a hiring manager asks you how much you make or how much you are looking for, Sethi, HR consultant, says you should say something like, “You know what, I’m happy to discuss money down the road, but right now I’m just trying to see if there’s a good fit for both of us. I’m sure you’re trying to do the same thing.”

Massachusetts joins at least 12 other states that already require companies to let employees compare notes about how much are paid. Massachusetts has created a new wave, not only to close wage gaps but to lower poverty rates and create a stronger economy for our country as a whole.                                                                       

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

Sources:

New York Times, http://nyti.ms/2aKzR5c

Business Insider, http://www.businessinsider.com/massachusetts-equal-pay-law-2016-8

Quartz, http://qz.com/749476/massachusetts-salary-history-job-interviews/

Posted by Karolina Staron.

A lawsuit was brought against Dannon Company, Inc for falsely advertising their yogurt brand. Dannon Company for years has claimed their popular product to be the healthiest on the market, ultimately pricing higher than competitors. Stating that daily consumption of the yogurt will reduce occurrences of colds and strengthen individual’s immune system. Consumers profoundly believed in the advertising, willing to pay a higher price.

One individual, however, challenged those claims. Trish Wiener suffered with digestive problems, the consumption of the yogurt that guaranteed digestive system improvements was intended to aid with the discomfort. Inspire of this, with time the yogurt failed to relieve the daily burden and Wiener began to question the accuracy of the advertisement.  “In its ads for the yogurts Dannon claims the products use exclusive strains of what are known as probiotic bacteria, [which] are live microorganisms, usually bacteria, similar to the beneficial ones found in the human digestive system. In the right amounts, they ‘confer a health benefit on the host.’” While, in fact no clinical testing has been accomplished to support the existence of probiotics in the dairy product.

Dannon Company, Inc. although denying any allegations against false advertising, has agreed to settle the Federal Trade Commission law suit. The settlement required acceptance to omit disclosing “scientific proof” benefit of their products. “Claiming that any yogurt, dairy drink, or probiotic food or drink reduces the likelihood of getting a cold or the flu, unless the claim is approved by the Food and Drug Administration.” The Company’s intention behind settling was forgo incurring additional expenses.

In the modern times, busy work schedule and daily tasks often take away time from properly planning meals and force people to rely on quickly obtainable foods. With a busy lifestyle people neglect the need to educate themselves on the quality of products they purchase. If the media states a specific food is beneficial to ingest, the statement is relied upon by the public without further questioning. This is only one case that has been brought to the public’s attention that addresses the topic of food quality and false advertisement. Many of the goods consumed on a daily bases possesses even lower value, yet are an accepted norm.  The lesson taken from this case is to inform ourselves on the supposed benefits of the purchased products, because in truth unless we grow and produce foods ourselves, we won’t know the true ingredients embedded in every product.

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

Sources:

http://abcnews.go.com/Business/dannon-settles-lawsuit/story?id=9950269

https://www.ftc.gov/news-events/press-releases/2010/12/dannon-agrees-drop-exaggerated-health-claims-activia-yogurt

Posted by Francesca Mecionis.

The owners of America’s Test Kitchen filed a 39-page lawsuit against Christopher Kimball, and some of his other associates, on November 3. According to the suit, Kimball and his accomplices “conspired to literally and conceptually rip off” the Boston TV show. The reason for his actions were said to be for his personal benefit in order to help launch his new brand, Milk Street. There are accusations of “stolen customer lists and trade secrets, sneaky tactics to secure a radio deal, and new office space.” Kimball had a fiduciary responsibility to the show. However, the owners believed he had stolen their entire business model, “right down to how recipes are written,” and also had worked on his own project while still being employed by America’s Test Kitchen.

Kimball, in response to the suit, claims it is “absurd” and “was meant to generate publicity and to shore up the America’s Test Kitchen brand.” Yet, there is proof of his actions in writing. There was a forensic search of his emails, which showed “Kimball’s scrambling to set up his new business before he left the old one, securing copies of his work contacts and packing up his belongings.” In another email, Kimball wrote to his assistant, “Want to get ahead of the partners!” in regards to using the America’s Test Kitchen name to find a new office space for his business.

The lawsuit was issued in the Superior Court of Suffolk County of Massachusetts. The owners are hunting for “unspecified monetary damages, repayment of some of the compensation that America’s Test Kitchen paid Kimball and the people who left with him, and asks the court to prevent him and his new company “from exploiting information, assets and opportunities stolen from America’s Test Kitchen.” Lawyers are arguing that Kimball’s motivation to steal secrets from the show stemmed from when the board and investors pushed him out. In 2013, America’s Test Kitchen’s rating decreased dramatically, and the show responded by hiring a new set of employees. By 2015, a new CE whom outranked Kimball had taken over, and eventually he stopped showing up to work, telling his coworkers “he had been fired.” “Kimball, in an interview Wednesday, cautioned not to read too much into the allegations, saying most were false or twisted interpretations.” His legal team is preparing to go against these accusations, within this month. Hopefully, the truth will be revealed and both parties receive what they deserve.

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

Posted by Cecylia Bigos.

Non-Compete agreements are a good method of protecting a business from former employees but their provisions must be reasonable or else the important limitation provisions (distance from business, duration) will not be enforced or worse yet the entire agreement will be declared void by a court. I came across an interesting article on Non-Compete provisions on the Entrepreneur.com. The article does an excellent job in summarizing how restrictive or broad the limiting provisions should be in order to protect the business yet still be enforceable in just a few sentences. “Your business is your baby. It may be tempting to be heavy-handed in your non-compete provisions, but it’s important to be reasonable. Excessive restrictions in your non-compete make it more likely that a judge will not enforce it.”

There are many fears in hiring new workers, yet new workers are essential to developing and evolving your business. One of the worst fears a business owner has is hiring and training an employee, introducing them to clients so they can perform their duties, to later learn that the employee left and is working for your former clients, essentially stealing your business right from under your nose. Yet we live in a country that encourages free thinking, expansion, new ideas and capitalism, and preventing employees from leaving businesses to start their own businesses would run contrary to our capitalistic beliefs; therefore, the limiting provisions cannot be too restrictive. The article uses one or two years as a reasonable restriction on time before a former employee can start performing the same work: longer for higher level/high skill employees. “You may reasonably demand a longer duration for higher level employees, like CEOs, where three to five years is not unheard of, depending upon the facts and the jurisdiction.” And the article explains that the geographical restriction should not be “any larger than the area in which you ordinarily conduct business.”

In my opinion, the article does not give too many examples, but using my understanding of non-compete clauses I can give some examples. Time and geographical limitations in non-compete clauses in the medical profession typically depend very heavily on how specialized a doctors practice is. For example a neurologist can limit a former practicing neurologist from working within 30 miles of the practice in which the young neurologist left. However, the geographical limitation for a general practice/family doctor would be much less than 30 miles maybe as little as 5 miles. Non-complete provisions restricting lawyers from practicing law are completely unenforceable. My hair stylist who works for a big salon and cuts my hair is not allowed to open her own salon within 5 miles of the salon and 3 years after leaving the salon. She may not even cut hair for her friends and family in her own house.

In summary, non-compete clauses are helpful in protecting entrepreneurs expanding their business yet the restrictions cannot be too restrictive or broad or else they will not be enforced by a court of law. “While a court may modify an unreasonable term or terms of a non-compete agreement, it can also invalidate an entire agreement if it finds credible evidence that the employer deliberately included overly broad language that renders an agreement unreasonable and oppressive.”

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

Posted by Mladen Trajkov.

Uber has become really successful and has grown and increased its market share tremendously in the last four years. The company is operating worldwide, and is valued around $62.5 billion. Their increase in presence can be seen in various places, especially in New York City. However, not everything looks so perfect with Uber. The drivers are not employed with the company, but they are self-employed and just sign contracts with Uber for the time period of work. Therefore, Uber is not entitled to pay them the minimum wage required by the state. “Research by Citizens Advice has suggested that as many as 460,000 people could be falsely classified as self-employed, costing [millions] a year in lost tax and employer national insurance contributions”, is written in the Guardian. Uber can`t classify its drivers are self-employed, therefore it has to provide the necessary benefits. This is based on two drivers in the UK who were employed by Uber. They were pressured to work long hours, instead of really working for themselves and make their schedule of working hours. Therefore, Uber was accused of “Resorting in its documentation to fictions, twisted language and even brand new terminology.”

This is going to have a bigger impact, because Uber is not the only business that does the self-contracting principle. Looking at Uber, a lot of other companies follow what Uber does, implements similar principles, and traps their employees in the self-employment scheme, which of course is not ethical. “The effect of this judgment is that those kinds of business may owe a lot more to their workers, such as paid holiday and minimum wage, than they had bargained for,” is said in the Guardian. This is an opportunity for those workers to enjoy the same privileges as regular workers do, for which they were previously denied and not entitled for.

A self-employed driver for Uber means that they do not qualify for health insurance, holiday pay, or the national minimum wage. On the other side, being self-employed means that you get to choose your hours of work and how much you work; basically you are your own boss. There are drivers who agree with this model, however some drivers are still disappointed. Drivers who agree are happy mostly because of the benefits of health insurance; however, they believe they are going to make less money now if they work less hours and make only the minimum wage. Other drivers who disagree, don`t really see themselves being employed. They prefer the freedom of choosing the hours of work and having their flexible schedule.

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

References:

https://www.theguardian.com/technology/2016/oct/28/uber-uk-tribunal-self-employed-status

http://www.bbc.com/news/business-37802386

Posted by Xiangni Meng.

There have been at least 16 deaths caused by a ruptured Takata air bag inflator worldwide. The first U.S. death report of a Takata inflator is a 17-year-old high school senior, who died in Texas in a moderate speed crash. The most recent death in the United States was confirmed by U.S. safety regulators. A 50-year-old California woman died in a Honda Civic that was first recalled in 2008 because of a defective airbag.

The problem is that “[t]he defective air bag inflators deploy with too much force sending metal fragments flying.” This accident spurned the search and recall for noncompliant vehicles. This deficiency covers more than 60 million air bags in vehicles from BMW, Ford, Honda, Tesla, Toyota, and 12 other corporations. That is one of every five cars on the road in the U.S. The biggest recall could affect more than 100 million vehicles around the world.

Actually, about 11.4 million inflators in the United States have been fixed, while more than 20 million were left unrepaired. Takata spokesman Jared Levy said the “tragedy underscores the importance of replacing those airbag inflators that have been recalled by automakers.” However, owners can be difficult to find. Even Honda has mailed letters, placed Facebook ads, made telephone calls, and in some instances visited owners, but some owners just refuse to get it repaired. “Safety advocates have called for laws banning the sale of any vehicle until recall repairs are made, or a national requirement that recalls be done before license plates can be renewed.” Spokesman Bryan Thomas said, The U.S. National Highway Traffic Safety Administration (NHTSA) doesn’t have legal authority to order those recalling steps.

A Senate investigation and personal injury litigation have turned up company documents suggesting that Takata executives ignored their own employees and hid the potential danger from Honda, their biggest customer, as well as from U.S. regulators. It is said Takata is seeking a financial investor to help pay for huge liabilities from the world’s biggest auto recall. Also, Takata could face $200 million fine over faulty airbags.

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

Sources:

http://www.nytimes.com/aponline/2016/10/29/business/ap-us-air-bag-danger.html?src=busln

http://fortune.com/2016/10/21/takata-air-bag-deaths/

http://www.bloomberg.com/news/features/2016-06-02/sixty-million-car-bombs-inside-takata-s-air-bag-crisis

Posted by Sarah Velez.

International business relations is a major component of the United States economy. Foreign countries send their ships to the United States to pick up shipments and deliver products. While this global trade relationship is highly beneficial, the challenges that arise as a result of compliance issues and differences in ethical standards have recently been brought to light. The article “Greek Shipping Companies Fined $1.5 Million for Pollution” written by Gene Johnson of the Associated Press, reports a case of a Greek vessel that “deliberately pumped oil-polluted water into the ocean, then repeatedly lied and falsified records in an effort to deceive inspectors with the U.S. Coast Guard.” These illegal actions led to a million and a half dollar fine to be paid by the companies that jointly own Gallia Graeca, the Greek vessel.

In October of 2015, Gallia Graeca arrived in Seattle to pick up a substantial shipment of soybeans. This ship, owned by both Gallia Graeca LTD and Angelakos SA, was routinely inspected by U.S. Coast Guard Petty Officer Daniel Hamilton once it arrived at the port. As reported by Petty Officer Hamilton, the oil was not properly cleaned and it was actually in areas where it should not have been as a result of the poor maintenance of the oil-water separator. A deeper investigation made by the prosecutors showed that the ship had discarded “5,000 gallons of oil-fouled bilge water” (Johnson). In addition to knowingly dumping this substantial amount of oil, the engineers on the ship also presented the U.S. Coast Guard with false records and feigned the functioning of the oil-water separator. According to the U.S. Attorney’s Office, company executives were aware of the entire operation which shows the unethical behavior throughout the company chain.

While the Coast Guard has reported cases of sea pollution, they consider that holding corporations, as well as individuals, criminally liable is “notoriously difficult to detect and prove” (Johnson). Not only were the two companies charged with forging log books and polluting, but other involved individuals were also held accountable and the engineers on board were sentenced to jail time. U.S. District Judge John Coughenour stated that this case “will resonate with other parties in this industry and cause them to pause when they think about creating a corporate culture that encourages deception.”

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

Posted by Lindsey Pena.

In business, ethics are strong guiding principles that aid managers, employees, and investors to correctly conduct business transactions. When ethical matters are disregarded, the end result is fraud, embezzlement, among many other illegal actions. One of these illegal actions is called a Ponzi scheme. Perhaps the most famous Ponzi scheme was devised by Bernie Madoff, a well-respected financier, who conned investors out of an estimated $65 billion. Madoff was caught in December of 2008 and charged with 11 counts of fraud, perjury, theft, and money laundering. He ultimately faced 150 years in prison as a result of his decades long Ponzi scheme.

Because of the magnitude of this Ponzi scheme, eight years later, the consequences are still being addressed. Recently, the estate of Stanley Chais, one of Bernie Madoff’s friends, agreed to pay the victims of Madoff’s Ponzi scheme $277 million to settle claims that insisted Chais profited from the scheme. Irving Picard, a trustee liquidating Madoff’s firm, has recovered more than $11.2 billion for the investors who were conned. They achieved this my suing the banks and offshore accounts that hid the money in addition to investors who profited from the fraud. In the 2009 lawsuit against Chais and his wife, Picard claimed that they “reaped about $1 billion in profit from fake securities transactions at Madoff’s firm.” Chais also reaped rewards through fees that he would earn when he gave his customer’s money to Madoff’s firm. In addition to this, Chais was also sued by the SEC in 2009 because he “steered assets from three investment funds to Madoff, “despite having clear indications Madoff was engaged in fraud.”

Chais, along with five of Madoff’s employees, were not the only ones who received consequences. Thousands of innocent investors trusted Bernie’s reputable, veteran background hoping to make profit from their investments. While reading this article, I could not help but to think about the Kantian ethics which states that a person should evaluate their actions by the consequences if everyone in society acted the same way. Bernie Madoff made the exception for himself when he decided to execute the treacherous plan and the consequences of his actions will cost him the rest of his life.

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

Posted by Enerd Pani.

During the beginning of October, there was a vast change where control of the internet source code was transported from the United States, to what most likely will be the United Nations. The result is that countries not only in Europe, but all over the world can vie for control of the internet. Arguably unscrupulous countries such as Russia, China and Iran can cause issues with human rights violations and can censor areas of the internet in other countries, not only within their own home country. The second issue is that the President did not ask Congress for approval to give a piece of U.S property to overseas forces. The following action has been criticized as going against US interests, and mitigating any form of American supremacy.

Still, some people see this as a necessary step. The National Telecommunications and Information Administration believes the chance of government intrusion to be “extremely remote” (BBC). The issue arises when multiple shareholders with many different ideas on how the internet should be maintained all vie for control of singular entity. These “stakeholders include countries, businesses and groups offering technological expertise” (BBC). One might wonder how such a important function can be put within the control of so many groups with different interests. There has even been calls by Russia and China for the Domain Naming Server to be put under the control “by the United Nations’ International Telecommunication Union” (BBC). The request put forward shows the desires countries with very shady human rights have towards getting control of such a important tool for free speech.

Many groups had argued that a delay on the acquisition should have been placed. The critics of the movement “argue that once the transition takes place it is irreversible, and that it would be prudent to temporarily maintain existing U.S. government authority” (fas 18). It would seem very controversial to transfer over such a valuable asset when there may not be any chance to change a decision. Also questions arise on how the “.mil” and “.gov” domains should be handled. These domains are sole property of the U.S Government, and cannot be used in any other way.

To conclude, the “giveaway” of ICANN is one shrouded in uncertainty. No one can be sure if the new stakeholders of the internet will continue to monitor it ethically. There has been major concern about some countries abusing the power of internet control, but many companies like the NTIA assure that they are looking to “protect U.S consumers, companies, and intellectual properties” (fas 12). It can be argued that ICANN was transferred unethically, though now the deed is done. The future will tell if this move will either effect, or mitigate personal freedoms on the internet.

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

Sources:

https://www.fas.org/sgp/crs/misc/R44022.pdf

http://www.bbc.com/news/technology-37114313

Posted by Kristina Volta.

In light of the recent events of Samsung’s Galaxy Note 7 phones setting on fire, many people have been looking to Apple as an alternative. However, the new news of Apple’s IPhone 7 catching flame has many consumers nervous. The most recent case was when an Australian surf coach, Matt Jones, left his phone under a pair of pants in his car while he taught a lesson. When he returned to his car he found that his car was full of smoke and where his phone was had been burnt up and the pants that had been on top of the phone were on fire. This is concerning for Apple whose stock has dropped .41%. This is going to be a knock to Apple’s popularity, especially after seeing the negative kickback that Samsung has been facing for a similar problem.

Apple has been investigating this report, challenging that he was not at the car when the fire started. Many people are beginning to believe that there is a possibility that Apple’s IPhone 7 has a similar Lithium-ion battery, which can become “unstable” when it’s put in certain situations. There is a chance the phone became too hot wrapped up in the pants in the car and that could have been the reason the phone caught fire.

Even though these claims haven’t been solidified yet, this could still cause a major setback for Apple and their products. Although there haven’t been many claims about Apple phones catching fire, the fear consumers now have could be significantly detrimental to their sales of the IPhone 7. Not to mention, if the case does come out to show that it was the IPhone’s battery that caught fire, Apple will be held liable for it.

When companies put out products their consumers and shareholders are putting faith in the company that they are purchasing a safe good unless otherwise mentioned. Lithium-ion batteries have been known to have issues for other products like “Tesla cars, Boeing jetliners, Hewlett Packard laptops and Hoverboards” as well as other IPhones. There was a case in March of an IPhone 6 bursting into flames on a flight to Hawaii. This is concerning for not only Apple, but also any other company who is or plans to use Lithium-ion batteries. This is a risk these companies are taking considering the clear unpredictability of the safety of these batteries.

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

Sources:

http://fortune.com/2016/10/21/apple-iphone-7-explodes/

http://www.breitbart.com/california/2016/10/21/2nd-fire-apple-iphone-7-threatens-mass-recall/

Posted by Sam Battista.

I came across this article recently about these topics that were brought up in class, and I thought it was appropriate to write a blog pertaining to this article. Seven reputable members of the Geneovese crime family were recently arrested on accounts of money laundering and racketeering. The group allegedly raked in millions of dollars through the Garden State by gambling, loansharking, and unlicensed check cashing. Most of these charges fall under the RICO laws because this is organized crime.

The group ran a massive loansharking operation, which generated about 1.3 million dollars in interest a year. It operated an offshore Costa Rica Gambling website and an unlicensed check cashing business, making over nine million in fees over a four year run. The group also laundered $660,000 dollars in drug money out of a Florida based check cashing entity. The group also gave out multimillion dollar loans with interest rates upwards of 156 percent. In addition, the group ran a illegal check cashing business out of a restaurant in Newark that cashed-in over 400 million dollars.

All of these violations are prohibited in the RICO laws and are considered organized crime. Most of the acts committed were covered or ran out of legitimate businesses. These individuals were all from New Jersey and are currently being prosecuted for their federal violations. People often think these type of crimes only happen in movies, but the truth is it’s a multimillion dollar business with violations happening everyday.

Sam is a business administration major with a concentration in real estate at Montclair State University, Class of 2016.

Posted by Anthony Leineweber.

The coal business just isn’t what it used to be and some companies are finding that out the hard way.  Most recently, it was Bumi, “Asias most-indebted coal miner,” that had to bite the bullet and file for creditor protection here in the U.S. “Bumi Investment Pte Ltd listed assets and debt of as much as $1 billion each in Chapter 15 papers filed today in U.S. Bankruptcy Court in Manhattan.” Chapter 15 bankruptcy is fairly new as of 2005 and deals with problems like debt and the control of certain assets involving more than one country. “Companies use Chapter 15 of the Bankruptcy Code to fend off creditor claims in the U.S. while they reorganize their finances elsewhere.”

“Bumi Investment and Jakarta-based Bumi Resources failed to make a coupon payment on $700 million of October 2017 notes last month, following a 30-day grace period.” Clearly, they are in serious trouble after not being able to get the money together even after being granted a 30 day grace period. About a week ago, the Singapore court disallowed any action or continuation by creditors for six months. “The court-obtained moratorium marks another chapter in efforts to contain the fallout in their mainstay coal business. Coal prices have slumped more than 50 percent since the end of 2010.”

Anthony is a marketing major at Montclair State University, Class of 2016.

Posted by Anthony Leineweber.

$167 million dollars sure is a lot of money, and that’s exactly what Decura investment firm is looking for from UBS’s investment bank. Decura claims their investment firm was not told about UBS’s future plans to downsize before agreeing to a contract with them in 2012. UBS “is not the bank with which Decura contracted on May 31, 2012,” Decura said in the documents. UBS calls their downsizing part of “project accelerate” and that their production and business standing has not and will not be affected in any way.

The reason for downsizing, according to UBS’s CEO Sergio Ermotti, is to “focus on money management while cutting costs to boost profits.” Clearly, Decura investment firm isn’t happy about that. They claim the cuts “mean the bank isn’t able to market its algorithmic trading and hedge fund products, triggering a termination clause in the contract.”

We’ll see how it all plays out, but it looks like these two sides aren’t coming to an agreement anytime soon.

Anthony is a marketing major at Montclair State University, Class of 2016.

Posted by Nicholas Andreula.

Three major U.S firms along with one German company are currently being investigated for possible price manipulation. “Goldman Sachs Group Inc., HSBC Holdings PLC, Standard Bank Group Ltd. and a German chemical maker” are being accused of working together in “manipulating platinum and palladium prices.” It is believed that this price manipulation has been going on for many years and has had a considerable impact on investors and individuals within the industry.

“Modern Settings filed the suit as a class action on Tuesday,” with what the firm believes to be substantial evidence in support of the case. This incident has caused a great deal of speculation regarding “price rigging” both within and in other unrelated industries. Companies such as Modern Settings are requesting the implementation of regulations to prevent similar incidences from happening in the future.

The firms involved have “refused to comment on the lawsuit when contacted by the Wall Street Journal.” Although the case has initiated the investigation of price manipulation within the industry, many believe that the “the changes have come too late.”

Nicholas is a business administration major with a concentration in finance at Montclair State University, Class of 2016.

Posted by Nicholas Andreula.

In recent months, a Toyoko-based airbag manufacturer, Takata, has been under fire with a multitude of lawsuits. Complaints of the malfunctioning airbags first began in 2010 when a woman was seriously injured after “shrapnel allegedly flew from one of the safety devices during the blast that inflated them.” Since then, an increasing amount of incidents involving the defected products have been reported and investigated. Due to many injuries and even some deaths, numerous individual suits and a “class-action suit in Florida against Takata and automakers including Honda, BMW, Nissan, and Toyota” have been filed.

A substantial amount of automakers have installed the defective airbags in vehicles, resulting in recalls on over “7.8 million cars in the U.S.” Owners of recalled vehicle models are being urged not to operate vehicles until the defected devices are either disabled or replaced. Takata and various auto manufacturers are currently facing a great deal of impending charges based on the recent incidents involving the devices.

In the past, Takata has been recognized for many important contributions to automobile safety by the “NHTSA, the top U.S. auto-safety regulator.” Due to the current and the possibility of future lawsuits, widespread fear for the company’s financial well-being has caused the company’s shares to fall “about 50 percent so far this year, as news of the injuries and the $413 million charge it took this summer.” Currently the issues regarding the device malfunction are being fully investigated by Takata, automakers, and the “U.S Department of Transportation.”

Nicholas is a business administration major with a concentration in finance at Montclair State University, Class of 2016.

Posted by Tiffany Zapata.

Sergei Pugachyov former banker, senator, and confidante to Valdimir Putin is now speaking out on his placement on Interpol’s most wanted list. According to Pugachov, he made the list because of a campaign created by elite Russian politicians against him. He is currently facing charges in Russia and the UK due to the 2010 collapse of the International Industrial Bank.

Pugachyov commented on Interpol’s activity, stating “Interpol’s involvement is illegal and he’ll explore ‘all avenues’ to fight to get his name removed.” He was listed on the international law enforcement agency’s roster and is being charged with counts of embezzlement, according to Interpol.

In attempts to prove his innocence, Pugachyov is trying to bring light to the situation and call-out Russian politicians. He stated: “The involvement of Interpol by the Russian authorities is an attempt to give credibility to the actions of high-level Russian officials involved in the expropriation, including direct orders of President Putin and a number of Russian cabinet ministers.”

He was subject to a red notice by Interpol but was able to cancel it by challenging it in court. He is determined and says he will do anything in his power to cancel the second notice as well.

Pugachyov was once known as one of the richest men in Russia. He now lives a bare life, stripped of all his assets and politically targeted in Russia due to the collapse of the bank in 2010. With the history of Russian governments, we can speculate this will not end well for Pugachyov.

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

The European ATM Security Team (EAST) discovered that ATM hackers are now drilling holes in ATM machines near the card reader and installing electronic devices which tap into the “read head” of the magnetic strip reader to steal information.  Normally, thieves would “skim” the information on the magnetic strip through an “overlay” device that would actually read the magnetic strip outside the machine when an unwary customer would insert his or her card.

Instead, these new devices work like a wiretap inside the machine and read the information as it passes through the head of the reader.  The hole is then covered up with a decal after the device is removed with the stolen data.  EAST still classifies the crime as “skimming” even though “‘the the magnetic stripe [on the customer/victim’s card] is not directly skimmed as the data is intercepted.’”

Cameras are still used by thieves to steal PIN numbers; therefore, EAST suggests customers cover the keypad with their hand before entering their PIN.

Posted by Genna Salvtoriello.

General Motors has been hit with a $3 billion dollar lawsuit by the state of Arizona. The lawsuit is due to a record number of 2.6 million vehicles this spring that have been claimed to be linked to safety defects such as a faulty ignition switch. This defect has been linked to 33 deaths and more injuries according to Kenneth Feinberg, who is looking after compensation to the victims of this defect and the damage that it has caused. Arizona’s lawsuit is focusing on the loss of value GM car owners have suffered due to the now damaged reputation of the “General Motors” name. The law that Arizona is suing General Motor’s under is a consumer fraud law that has a maximum penalty of $10,000. And that’s just for each individual violation. There are about 300,000 GM vehicles that are registered in the state of Arizona. Which means a judge could fine General Motors up to $3 billion dollar, according to a report in the New York Times.

However, the ignition doesn’t seem to be the only issue with GM cars. The lawsuit that Arizona is pending shows not just one, but multiple defects with the GM vehicles. These defects include seat belts, brake lights, airbags and transmission cables. The GM vehicles have dropped significantly in value because of the safety defects, which has cost those car owners to lose thousands of dollars. “GM is committed to setting a new industry standard for safety, quality and excellence. This includes recalling vehicles proactively when we identify a safety issue,” said spokesman James Cain. GM is also under investigation by the U.S. attorney in New York, congressional committees, and the National Highway Traffic Safety Administration. The number of claimants is rising for GM who is running a compensation program. The company is allowing potential victims of this recall over faulty ignition switches an extra month to file claims seeking compensation. It will be clear in the near future to see just how many people have been put at risk, or even worse, actually hurt by this life threatening recall.

Genna is a marketing major at Montclair State University, Class of 2017.

Posted by Genna Salvatoriello.

Target has come up with a brilliant way to not only give their shoppers good deals on Black Friday, but to make them come back wanting more. Target offered 10% off of its gift cards on Black Friday, which will help bring shoppers back. Target also revealed certain deals that will get its customers out of their homes and into the store. Some of these deals Target is offering include $50 off Beats headphones and $10 off an Apple TV. The catch is that it only applies if customers order online, and them pick these items up at the store. They also announced that their mobile app will offer 50% off a different toy each day throughout the holiday season.

After the data breach that compromised millions of customer accounts last holiday season, Target is hoping that these promotions will encourage more customers to shop with them. Target has made the right move with creating these promotions, especially because online shopping growth is expected to far outpace in-store growth this year. The National Retail federation projects that in-store sales will climb by 4.1%, while online sales will jump between 8% and 11%. Hopefully this will not be the case for Target, as they do their best to encourage customers back into their stores.

Genna is a marketing major at Montclair State University, Class of 2017.

Posted by Zhan’e Shaw.

Iknoor Singh, a Sikh student at Hofstra University, filed a lawsuit against the United States Army, claiming “the service refused to grant him a religious accommodation that would allow him to enlist in his school’s ROTC program without shaving his beard, cutting his hair and removing his turban.” The Army denied Iknoor Singh’s request for a religious exemption from the military’s grooming policies when he enlisted as a cadet on the grounds the exemption would have “’an adverse impact on the Army’s readiness, unit cohesion, standards, health, safety, or discipline.’”

The Army later stated Singh could seek an exemption only after he was enlisted as a cadet, “creating a reef in which Singh would have to violate his faith to be able to apply for a religious accommodation.” Singh stated “’I couldn’t believe the military was asking me to make the impossible decision of choosing between the country I love and my faith.’”

The ACLU and United Sikhs filed the suit on Singh’s behalf claiming the “Army’s denial of religious exemption violated the Religious Freedom Restoration Act.” In a statement, Hofstra said it “’entirely supports Mr. Singh’s ambitions to serve his country. He is currently enrolled in the ROTC class and we are providing him leadership training to the extent that the U.S Army has allowed.’”

In September 2014, the Army adjusted it’s grooming policies to allow female soldiers “to wear braids, cornrows,” and twists in their hair resulting from public complaints. The case is still ongoing.

Zhan’e is a business management major at Montclair State University, Class of 2016.

Posted by Philip D Lacki.

‘The lid popped off”? How does a lid pop off without someone doing something to cause it to pop off? Just like the Liebeck v McDonald’s case, I find this case involving someone suing Starbucks for a faulty lid to be morally wrong in the sense of business law. “The stress activated [the plaintiff’s] Crohn’s disease, and as a result, he lost part of his intestine. He claims damages of $50,000. His wife also sued for loss of companionship.”

The eggshell skull rule is a well-established legal doctrine used in some tort law systems. It means that saying the injured person is frail is not a defense in a tort case.

In class, we discussed the McDonalds case and looked into the case. When do ends justify the means? In my discussion post about the video, we watched the video about the case and talked about how one may use bad or immoral methods as long as you accomplish something good by using them. (Not everyone agrees with this idea). The man suing Starbucks for $50,000 used immoral methods to accomplish something bad.

In class, we also discussed the Gucci case where a person in China was selling counterfeit Gucci products and selling them online. Gucci, who realized what was happening, notified the person in China without getting a response. The man in China was using immoral methods to accomplish something bad, and though it might be a bit extreme to compare, you can see how these two cases have similarities in both business and legal aspects.

Philip is a public relations major with a minor is business administration at Seton Hall University, Class of 2017.

Posted by Briana Encarnacion.

The articles by CBS News, USA Today, and Time Magazine below all discuss a case between a woman named Cynthia Robinson and R.J. Reynolds Tobacco Co., a cigarette making company. Ms. Robinson had filed suit against R.J. Reynolds on behalf of her husband, Michael Johnson, Sr., who passed away in 1996 due to lung cancer. According to Time Magazine, “Johnson got hooked on cigarettes when he was just 13-years-old, and eventually smoked up to three packs a day.” The article goes on to demonstrate how truly addicted Mr. Johnson was to cigarettes by quoting his wife, “When you’re on oxygen and you have to step outside for a cigarette, you can’t stop. You’re addicted.” So it was clear that Mr. Johnson was addicted to cigarettes and that is why he developed lung cancer, but the question was, how exactly was R.J. Reynolds to blame?

In an article published in USAToday, Christopher Chestnut, an attorney for Ms. Robinson, was quoted stating, “The environment today is completely different than it was in the ’50s and ’60s, when Ms. Robinson’s husband was alive . . . Reynolds knew its product was addictive, but it didn’t market it correctly. The company lied and marketed cigarettes as safe, yet they contained countless harmful chemicals.” This statement alone tells us who was to blame. It was R.J. Reynolds. Had the company been more transparent as opposed to intentionally hiding the negative effects of smoking their cigarettes, the punitive damages would have never been so great. However, because they intended to make profits by lying to their customers and causing harm to them in the process, punitive damages were granted to Ms. Robinson.

Time Magazine quotes Willie E. Gary, another attorney of Ms. Robinson, stating, “We expected every dime and more . . . Johnson started smoking when he was a teen. How aware of the risks can you be at that age? But [the tobacco industry] would market and target kids. To this day they are going after our youth, stuffing their pockets. It’s all about the profits and it’s nothing about the health and safety of the people.” This is exactly right. From what I have learned through studying business law, the ends do not necessarily justify the means, an idea conveyed in the principle of “double effect;” it is all about the intent. However, the means do in fact justify the end and in this case, R.J. Reynolds did not have good intentions. As Gary stated, they were focused solely on profit. Their goal was to make money by selling cigarettes that were addictive and contained harsh chemicals known to cause cancer. They knew that by targeting the youth and hiding the reality that their cigarettes could cause cancer, they would attain a market large enough to bring in a great deal of revenue. They failed to consider the long-run effects of this decision and in the end it came back to haunt them. Ms. Robinson and her son were awarded $7,302,625 and $9,591,208 in compensatory damages, respectively, and not to mention the $23,623,718,906.62 in punitive damages, according to cvn.com.

Still, as stressed in the article published by CBS News, the money was not what was important to Ms. Robinson and her family. What was important was that the tobacco industry learn their lesson and stop targeting the youth. Ms. Robinson’s attorney Gary stated, “The lawsuit’s goal was to stop tobacco companies from targeting children and young people with their advertising. . . If we don’t get a dime, that’s OK, if we can make a difference and save some lives” (CBS News). It was clear that although punitive damages might have been seen as overly excessive by the tobacco industry, especially R.J. Reynolds themselves, that was not the goal of Ms. Robinson. It was merely an added bonus to doing what was right on behalf of her husband.

This case is a great example of the theory of double effect and a good one to study when it comes to the debate on whether or not punitive damages should have a cap. Opinions will vary of course, however, it is interesting to study cases such as these and decide on your own whether or not you agree with the verdict.

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

Sources:

http://www.usatoday.com/story/money/business/2014/07/19/jury-hits-rj-reynolds-with-23b-verdict/12887315/
http://time.com/3016961/23-6-billion-lawsuit-winner-to-big-tobacco-are-you-awake-now/
http://www.cbsnews.com/news/r-j-reynolds-tobacco-hit-for-billions-in-michael-johnson-sr-lawsuit/
http://cvn.com/proceedings/cynthia-robinson-v-rj-reynolds-tobacco-company-et-al-trial-2014-03-03

Posted by Dana Domenick

Takeda Pharmaceutical Company is Asia’s largest pharmaceutical company and one of the most successful in the world. In the late 1990s, Takeda globally released an antidiabetic drug known as Actos. According to the FDA, the purpose of pioglitazone, the generic name for Actos, is to “improve control of blood sugar in adults with type 2 diabetes mellitus” (fda.gov).

Eli Lilly and Company is an American pharmaceutical company based in Indianapolis, Indiana. Takeda entered a partnership with Eli Lilly in which the American company would market Actos in the United States. In 2011, a New York resident, Terrance Allen and his wife filed a suit against Eli Lilly and Takeda claiming that the drug caused Terrance Allen to develop bladder cancer. The defendant had evidence to prove that the company failed to warn that Actos increases the risk of cancer. The trial took place in Lafayette, Louisiana. The jury sided with the plaintiff and awarded $9 billion in punitive damages. Lilly had to pay $3 billion while Takeda had to pay $6 billion. Both drug companies appealed the verdict and the damages were slashed to $36.8 million.

This suit was just one of the almost 9,000 pending claims toward Takeda made by Americans who had used the drug. All litigants argued that the company failed to warn them that use of the drug heightened their risk of cancer. In April 2014, the Japanese pharmaceutical company came to a settlement of $2.4 billion to cover the damages in all of the suits and costs against them in the United States. According to the New York Times, the damages given to each plaintiff will vary depending on individual factors including the amount of drug consumed and each individual’s physiological history (Andrew Pollack). According to Business Insider, Takeda expressed that the company is not concerned about the large settlement and they will continue to sell the drug.

Dana is a psychology major at Seton Hall University, Class of 2017.

Sources:

http://www.nytimes.com/2014/04/09/business/international/japanese-drug-maker-ordered-to-pay-6-billion-over-cancer-claims.html http://www.fda.gov/Drugs/DrugSafety/PostmarketDrugSafetyInformationforPatientsandProviders/ucm109136.htm

http://www.businessinsider.com/afp-takeda-warns-of-loss-after–2.4-bn-diabetes-drug-settlements-2015-4

Posted by Rilind Dauti.

$18 billion in goods alone in 2004. Every supplier wants to make deals with the inventory giant, Wal-Mart. To keep the deals going for the prices,Wal-Mart wants to negotiate, and these suppliers are forced to cut their costs (pay their workers less), in order to keep their contracts with Wal-Mart.

It doesn’t stop at the low wages. Wal-Mart’s healthcare plan has one of the lowest premiums, ranging from $9 to $27 dollars per pay period. What they don’t tell you is that there is a $5,000 annual out-of-pocket fee. If workers make an average of $20,000, the fee is approximately ¼ of an employee’s salary. Employees are forced to take advantage of government-funded programs like Medicaid. This insurance is covered by taxpayers, so taxpayers are forced to spend their money on Wal-Mart employees.

So what does this mean? Wal-Mart is where it is now because of their low wages, worker exploitation, and inadequate healthcare for its employees so that they can guarantee you their lowest prices. Their prices are low because of the unethical practices enforced by their CEO and higher officials in the corporation.

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

Posted by Michael Habib.

A growing and popular phenomenon in the U.S. is fantasy football. A person reported by The New York Times won $350,000 on FanDuel in a contest. There are two companies that dominate the fantasy football market: FanDuel and DraftKings. “The two companies together enjoy 95% market share of the daily-fantasy industry, have come under the harsh light of regulatory scrutiny, with investigations launched by the New York State Attorney General and the FBI,” according to Daniel Roberts. Both of these companies ecently have been banned in the State of Nevada. The State of Nevada Gaming Control Board ruled that all unlicensed daily fantasy sports companies must cease and desist in the state. It is very ironic in the state with the largest gambling industry shuts down two major fantasy football companies.

Many argue that fantasy football is not gambling, but more skill. Nevada labels it as gambling and not a game of skill; now these companies need to obtain a gambling license to continue to do business in Nevada. Companies such as Draftpot, StarsDraft and even Yahoo’s daily fantasy football also now needs to obtain the gambling licenses. However, other state’s laws differ on the definition of gambling. In “Kansas a contest must prove only that it involves more skill than change.” In “Tennessee and Arkansas, the contest must prove it involved no change and all skill.” Currently, these companies operate in 44 states. Since some state laws are unfriendly to the gambling business, it affects fantasy football drastically. FanDuel and DrafitKings stated that this will only be a growing problem, however they will fight to have everybody back to enjoying the contest.

Michael is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2017.

Posted by Michael Habib.

Many people today always hear about the search warrant and are police required to have probable cause to search a suspect’s cell phone. Recently, a case was heard in the Supreme Court regarding a robbery and police accessing information from the cell phone carriers that lead to Mr. Quartavious Davis’s arrest in Florida. Mr. Davis was convicted of a string of robberies in 2010 and was sentenced to approximately 162 years in prison, without parole. Mr. Davis challenged and argued that police did not access a search warrant when seeking information from his cellphone carrier MetroPCS Communications Inc. The information provided resulted and provided evidence of the approximate location of Mr. Davis during the time of the string of robberies. According to Lawrence Hurley, in May, the “11th U.S. Circuit Court of Appeals ruled that the failure of obtaining a warrant did not violate Davis’ right to be free from unreasonable searches and seizures under the Fourth Amendment to the U.S. Constitution.” This lead Davis to seek Supreme Court review and the result was the same as the 11th U.S. Circuit court of Appeals. The big question here that is constantly brought up by many people is how much privacy people and business have? Specifically, the four main cell phone carriers Verizon, AT&T, T-Mobile and Sprint, should they fight to keep their customers information private? According to Lawrence Hurley, this information is requested by law enforcement tens of thousands times per year. Many lower level courts have similar cases regarding business protecting the privacy of their customers and infringement of privacy.

A counter-argument can be for purpose where businesses and law enforcement may want to have the availability of this information to quickly solve cases such as Mr. Davis’s robberies. Business owners may support this for the purpose to protect their business from these robberies, however other business such as the cell phone carriers may argue that this is infringement of privacy towards their customers and hurts their business.

Michael is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2017.

Posted by Deane Franco.

While reading the Wall Street Journal, I found an article that deals with insider trading and why certain charges were being dropped. A year ago, SAC agreed to plead guilty to securities fraud and wire fraud and pay a $1.8 billion penalty and take responsibility for the actions of their employees, including Mr. Steinberg. Mr. Steinberg is a senior employee at SAC Capital Advisors LP who was charged with insider trading, along with 6 other analysts. The charges has since been dropped because Prosecutor Mr. Bharara said holding the accused any longer would be a form of injustice, since no information can be found incriminating the accused on their chargers. Before this came to light there were a few preceding facts. First, SAC’s founder Mr. Cohen has been on the radar of the SEC for years, as they try and gather proof that he used insider trading to boost his success. Also, Mr. Steinberg is a confidant to SAC founder Mr. Cohen, so this might have been the prosecutor’s way into discovering information about Mr. Cohen. Whatever the reason may be, after the public attention SAC Capital Advisors LP has now rebranded itself to be Point72 Asset Management LP. With all these facts being known, Mr. Bharara has still dismissed the charges against Mr. Steinberg and the case is currently in the process of being assessed by the SEC to see if they will accept the dismissal.

This case raises huge ethical flags to me because although prosecutors have not found any evidence to charge SAC capital Advisors with penalties, I think all its actions to this point have proven him guilty. A company has a moral duty to take responsibility for the actions of its employees as its own wrong doing. For that reason, employees conducting insider trading means the company also conducts insider trading and should be penalized for such. SAC Capital Advisors felt the heat of the media and SEC pressure to the point where they “rebranded” themselves as a new company, and now only manage Mr. Cohen’s fortune and no outside clients. An innocent company has no reason to hide behind the act of rebranding if their company truly acted in an ethical way. I would be curious to see if the SEC turns up any wire fraud charges or some procedural error in the way SAC Capital Advisors conducted their insider trading business.

The reason why I think insider trading and other illegal investment activities like this should be penalized harshly is because the educated few, take nonpublic information to give themselves an advantage that will take advantage of those who know less about the markets. When it comes to investing, investors should feel safe that they have received adequate information to make an informed decision that could eventually lead to a return on their investment. These dishonest acts in trading tip the scale to make investors not feel secure and confident that their money will not be consumed by a cheating wealthy party; and then who really loses when investors stop investing? I understand that so far, no evidence has risen to provide factual evidence of wrong doing, but there must be some leadership member of SAC who will own up to SAC’s ethical responsibility to society.

Deane is a finance and information technology management major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Ashley O’Connell.

Relating to the topic of criminal law, I found an article published on November 11, 2015 from FoxNews.com called, “‘The biggest sham’: Sheriffs fume at mass release of 6,000 federal inmates.” Numerous sheriffs, policeman, and local community attendees shared their concern in regards to their safety and their thoughts on the release of 6,112 inmates. These inmates were released from a federal prison and has caused worry for citizens in early November. The release took place at the El Reno federal Correctional institution in Oklahoma.

Participants of the criminal justice reform have stated how the process of the inmates being released is being highly monitored and “handled responsibly.” The idea of the inmates getting released came from a discussion from the U.S Sentencing Commission when they decided to “reduce sentences for most drug trafficking offenses.” Most of the criminals that were released had been in federal prison for nine years. In the article it states, “[Y]ou don’t have to be a sheriff to realize that a felon after nine years in jail isn’t going to be adding value to the community. A third are illegals and felons so they can’t work.” Reading this quote from the article opened my eyes and made me realize that I am not the only one with this opinion, and even sheriffs feel the same way but they cannot do anything about it.

The 6,112 inmates who were released are only a portion of the total number by the end of the year. Currently, there are 46,000 more cases in which are being investigated and reviewed. Of the number being reviewed along with the amount of people who were released, there is an uproar of concern of whether the inmates are going to be violent or not. A great point about this is brought up, “If the Obama administration is not capable of making honest and prudent decisions in securing our borders, how can we trust them to make the right decision on the release of prisons who may return to a life of crime? I’d be amazed if the 6,000 . . . being released are non-violent.” I agree with this statement in regards to the violence; I believe that there will be a handful of people who will be violent.

Criminal justice advocates disagree with the Sheriffs’ opinion and do not see the issue in releasing the inmates. Their defense was that there are always inmates that are being released and the 6,112 inmates this month are not going to make a difference. The article is closed with a great quote, “There are many sheriffs feeling as though the administration will go through the motions of asking the questions but really not care what the opinion or expert advice of law enforcement is.” With this closing quote, I completely agree with everything that was said in this article. I do believe that the law enforcement is not being taken seriously, and I am afraid of what will happen if more inmates get released on a daily basis.

Ashely is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2017.

Posted by Steven Doolittle.

Daily fantasy sports are a huge part of the culture in the United States. DraftKings and FanDuel are two of the largest providers of daily fantasy sports and the New York State attorney general on Tuesday ordered those two fantasy sports companies to stop accepting bets from New York residents, due to their games constituting illegal gambling under the current state law. This decision has caused a major problem for the multibillion dollar industry, which has created a demographic of young people and partnerships with professional sports teams. Belief that this decision will continue into other states, a downward spiral for this industry is possible.

In 2006, fantasy sports that involved gambling were exempted from a prohibition against processing online financial wagering, because it was decided the games took more skill than luck. However, now with the offering of huge prizes on more individual sports leads to it being more luck- based, and therrfore, the decision is being questioned. As stated in the article, “The two companies can challenge the attorney general’s order in court. According to Joseph M. Kelly, a professor of business law at the State University College at Buffalo, the state would have to prove that chance is a material factor in fantasy sports, which would make it gambling.” There is a lot the needs to happen to finalize whether it can be classified as illegal.

“The attorney general’s office said daily fantasy sports ‘appears to be creating the same public health and economic problems associated with gambling.’” FanDuel and DraftKings argue that fantasy sports is a game of skill and legal under New York state law. Politicians are saying people are not allowed to play a game they love. It is a debate that will change the world of fantasy sports.

Steven is a student at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Connor Lynch.

An article from The Wall Street Journal titled, “Toshiba Shares Fall After Loss, Lawsuits” involves an accounting scandal within the Toshiba Corporation. On Monday, Toshiba Corp. shares fell 7.5% after the company shocked the public with their poor financial results. Because of the decrease in share price, the Toshiba Corporation is suing their former executives that are in connection with an accounting scandal which may show prolonged legal uncertainties.

For the latest sixth month period, the technology giant Toshiba released statements that showed a $733 million loss. Investors were surprised by both the huge economic loss and the odd time period for releasing the financial statement. After showing a $1.12 billion dollar profit in the previous year, the publicly traded company is in an obvious state of distress. The corporation is not in a good state as of recently, “Equally unusual was Toshiba’s disclosure that it had sued three former presidents and two other executives, seeking to recover ¥300 million in connection with the scandal. Toshiba has said it overstated profits by ¥155 billion over seven years, prompting the resignation of then-CEO Hisao Tanaka in July.” In the lawsuits, the CEO and two other chief officers are said to have exhibited lax oversights on the financial statements of the company. This accounting scandal has led to several lawsuits that are reflecting poorly on the corporation for obvious reasons.

In July, Mr. Tanaka had released a statement apologizing for the problems but denies knowing about any inappropriate accounting. Because of the lawsuits involving shareholders, the stock price of Toshiba has reached its lowest level since 2012. The scandal is viewed as a disaster and many officials are speculative that Toshiba may have more skeletons in their closet. Toshiba is now viewed as a corporation with a negative outlook with businesses that seem unprofitable and need restructuring. As of now, it is unclear of Toshiba’s true position because of the accounting scandal effects on their financial reports.

The difficulty that Toshiba is experiencing as of late is causing them to consider reconstructing the corporation. Earnings are deteriorating and this is not good for Toshiba, “Sales plunged and losses swelled in the company’s consumer electronics business, and earnings fell sharply in its semiconductor arm, a leading maker of flash memory chips for smartphones and other gadgets. The chip business has been Toshiba’s main money maker in recent years.” Because of the decreasing sales in Toshiba’s business market, it causes the public to wonder if the previous financial success was based solely upon accounting tactics.

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

Posted by Katie Kim.

On Thursday, Martin Shkreli, a 32 year-old pharmaceutical executive, was arrested by the federal authorities on securities and wire-fraud charges stemming from an alleged Ponzi scheme he ran as a hedge-fund manager. What the young executive was doing was taking out loans from investors to start a new pharmaceutical company and using that money to pay off his debt from his hedge-fund. Martin Shkreli committed “fraud in nearly every aspect of hedge-fund investments and in connection with his stewardship of a public company,” said the director of enforcement at the Securities and Exchange Commission, Andrew J. Ceresney.

Shkreli was already notorious for price-gouging during his time at Turning Pharmaceuticals. His idea was to acquire decades old drugs and raise the price of it to $750 from $13.50 per pill. The current charges are not related to Shkreli’s work as chief executive of Turing Pharmaceuticals.

The federal authorities say that Shkreli was running three schemes that had connections to one another, he defrauded investors and used stock and cash from an unrelated pharmaceutical company to cover up the money he lost. The Brooklyn US attorney filed a seven-count criminal indictment and the Securities and Exchange Commission filed a related civil complaint on alleged securities fraud against Shkreli. Federal officials painted Mr. Shkreli’s business dealings as “a securities fraud trifecta of lies, deceit and greed.”

Shkreli was released on a $5 million bail, secured by a bank account and his father and brother. The authorities also arrested Evan L. Greebel who served as an outside counsel to Retrophin, the company Shkreli previously worked for. Shkreli treated Retrophin like his “personal piggy bank” where he used $11 million to pay back shareholders of MSMB funds.

Katie is an accounting/finance major at the Stillman School of Business, Seton Hall University, Class of 2018.

Posted by Dan Udvari.

On December 3, 2015 Donald L. Blankenship – the CEO of Massey Energy, Co. – was convicted of a single misdemeanor for conducting a conspiracy to violate safety rules in his coal mines just before the Upper Big Branch Mine disaster that occurred on April 5, 2010.

Massey Energy was the fourth largest publicly traded coal extractor by revenue ($2.69 billion) in the United States. It was founded in 1920 by the Massey family and operated in Richmond, Virginia. The company consisted of approximately 5800 employees right before Alpha Natural Resources acquired the company for 7.1 billion dollars. Interestingly, 99% of the shareholders voted in favor of the acquisition, which shows how poorly the company was governed by management. Don Blankenship took control over the company in 1992 and created a culture that favored profits over safety. In total, the coal extractor giant had around 369 citations and orders, which totaled a staggering 10.8 million dollars.

On April 5, 2015 a massive explosion in the Upper Big Branch Mine in Montcoal, West Virginia occurred that killed 29 people. This tragedy was the worst since the 1970 Hyden disaster. Massey Energy operated the Upper Big Branch Mine and later turned out that they operated the mine in a manner that was against several rules set up by the MSHA. The investigation later determined that the ventilation system in the mine did not work properly and failed to get rid of the toxic gases that caused the explosion. Massey intentionally neglected all the safety rules and citations issued by the MSHA for the purpose of increasing profits. However, this case goes deeper than one thinks. According to reports, Massey Energy is very influential on political figures and officials in West Virginia. Using this power, they were able to bribe and manipulate MSHA regulators so they look the other way when inspecting the mines.

In November 2014, Don Blankenship, was indicted by a federal jury on four criminal counts including conspiracy to violate safety laws, securities fraud, defrauding the federal government, and making false statements to the SEC. Even though he was charged with these, he was only found guilty of one on December 3, 2015. Had he been convicted of all four, he could have been sent to prison for approximately thirty years. Now, he is only serving one year in jail.

I do not believe that Blankenship should only serve one year in jail. It seems unfair to those who had lost their lives because of profits. It baffles me that people as greedy as him get away with conspiracy and murder charges. It seems that money can literally buy your freedom in the United States. All you need is a good lawyer or lawyers.

Dan is a graduate accounting student with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2016.

Posted by Charles Batikha.

Ransomware is similar to a Trojan horse. Imagine receiving an email from a non-familiar email address. The email claims to be the IRS claiming you are being sued for tax evasion and instructed to click on a link to a website. You are skeptical, but what is the worst thing that could happen if you click on the link. Malware was the virus used when ransomware was first introduced, but more recently website URL and deceptive pop-ups are being utilized. Home computers are not the only victims, business and even government systems have been breached as well.

Upon clicking on the link your browser becomes frozen, unable to use your computer a message pops onto the screen informing you of the encryption of your computer. This renders it useless and a fee is charged for the encryption key, which will cost anywhere from $200 to $5000. This is the newest “variant” called Crypto-Wall or Crypto-Wall 2.0. Interestingly enough, the scammers instruct victims to purchase bitcoins to be used for payment. Bitcoins have become much more popular among criminals because of the concealment of their identity.

Ransomware has also begun to hit smartphones, locking them as well. I personally have fallen victim to this type of ransomware. A message popped up stating that I must contact Apple to unfreeze my phone, but every time I closed the pop-up the notification would come up again not allowing me to use my internet. I called the phone number on the message, and I noticed that the phone line was a Google number, which made me a little suspicious. Immediately after someone answered the phone, they gave me a scripted explanation of how my system was locked and I need to give them my credit card number for a fee for them to unlock my phone. Fortunately enough, I did not pay the fee and hung up on the pleading receptionist.

A way I have found to refresh your phone from ransomware is to clear your website data in the setting of your phone. This has given me the use of my internet after being hit with ransomware. Updated anti-virus software on your computer is another preventative tactic. Using a pop-up blocker and not fumbling with unsolicited emails are other great tips as well.

Charles is a graduate accounting student with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University.

Posted by Charles Batikha.

Tamira Fonville was a Mesa Airlines employee and part time recruiter for a hair show, but these were both false lives that Fonville was leading. Fonville spent her time along the east coast from New York to Washington D.C. trying to lure women to expose their financial information by fraudulently posing as a hair show recruiter wanting to hire young women. Unfortunately, there was no show and Fonville was not a recruiter, nor an airline employee. By the end, she caught herself in an addiction she could not stop, between signing off bouncing checks and scamming women; she was bound to get caught.

Ricardo Falana was Fonville’s assistant.  Before the banks would know what was happening, they both would wipe accounts clean. Foneville would ask the girls for their bank account information, lying, saying she wanted to deposit checks into their account. Once the checks were deposited, the account would be emptied before the banks could be any wiser. For individuals that were too smart to be scammed, Tamira would offer them a piece of the pie. These individuals were even “coached” to lie to bank employees, telling them their credit cards had been stolen. The problem was the piece of the pie that they were waiting for never came. After some time, these women came forward as victims.

Young women were not the only ones that Fonville scammed. She applied for a car loan under the impression of being an employee of Mesa Airlines with a $65,000 salary. Tamira used $30,000 to pay for her Chevy Camero, plastic surgery and her New York apartment. While she was living this lavish life, Fonville also was living off food stamps, while having her student loans, totaling up to $100,000, deferred.

Tamira was arrested in August 2014, said to have profited over $200,000 from the scams. She was sentenced 15 months for conspiracy to commit bank fraud as well as 3 cases of bank fraud. Falana, Tamira’s assistant, was sentenced to 80 months after pleading guilty to similar bank fraud charges.

Charles is a graduate accounting student with a certificate in forensic accounting at the Feliciano School of Business, Montclair State University.

Posted by Daniel Perez.

In “Accountants Increasingly Use Data Analysis to Catch Fraud,” Jo Craven McGinty highlights the rise in the use of mathematical and forensic procedures in the today’s audit industry. Americans are burdened with an estimated $300 billion a year due to employee fraud in the workplace. In the aftermath of large-scale fraud cases, such as Enron and WorldCom, audit firms are increasingly using more reliable audit procedures in their engagements to prevent such fraud cases from occurring again. Benford’s Law is the center focus of this article as it supports how similar procedures drives audit quality in the right direction.

In investigating refunds issued by a call center, a group of forensic accountants used Benford’s Law to detect employee fraud. Instead of traditional sampling used by auditors, the group of forensic accountants used Benford’s Law because it offers mathematical evidence that fraud may or may not be occurring: “According to Benford’s Law—named for a Depression-era physicist who calculated the expected frequency of digits in lists of numbers—more numbers start with one than any other digit, followed by those that begin with two, then three and so on.” In their testing of the refund amounts, the accountants expected to see a significant amount of refunds starting with “1,” followed by “2” and so on. The occurrence of refunds beginning with “4” were much more prevalent than it should have been according to Benford’s Law, raising the flag that fraud may be occurring. Applying similar procedures to Benford’s Law in the foundation of audits may grow to be a normal practice at some point in the future.

An application of the procedure to Enron’s financial statements portrays a clear variation from the normal results from Benford’s Law. McGinty’s article states that as computer programs, such as ACL, featuring forensic accounting procedures grow rampant in the marketplace, the use of these procedures does have a positive impact on future.

Article:

http://www.wsj.com/articles/accountants-increasingly-use-data-analysis-to-catch-fraud-1417804886

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

Posted by Daphine Llosa.

The current legal issue relates to conspiracy and breach. A conspiracy is an agreement by two or more parties to commit a crime to do something unlawful or harmful. A breach is an act of breaking or failing to observe a law or agreement. On Tuesday, November 17, 2015, Crystal Banuelos pleaded guilty of a conspiracy to attain personal information and commit cards theft from Michaels Companies Incorporated’s customers. Michaels is an arts and crafts, custom framing, home décor and seasonal products store. Prior to this case, there was another prosecution where Eduard Arakelyan (age of 24) and Arman Vardanyan (age of 26) were charged for being involved in a breach. This breach was discovered in 2011 where devices were installed on point-of-sale terminals so they may obtain Michaels’ customers’ personal information as well as bank account numbers. Both individuals pleaded guilty three years ago for stealing from 952 debit cards; they were sentenced for five years of prison.

Crystal Banuelos, the 28 year old California woman, had participated in a conspiracy to acquire 94,000 credit and debit card numbers. It took Banuelos around four months to admit to her charges and plead guilty in the federal court in Camden, New Jersey. CNBC mentioned that the prosecutors found that the individuals involved in the conspiracy had replaced close to 90 of the point-of-sale terminals in 80 different Michaels stores in “19 states with counterfeit devices that were equipped with wireless technology.” They used these counterfeit devices to acquire customers’ personal identification number information as well as any additional information that they may have found useful for their theft. Crystal Banuelos, along with others, had managed to create an exact imitation of these debit cards using the stolen information they gathered when they applied the counterfeit devices. They were able to obtain and collect more than $420,000 by withdrawing from automated teller machines. Two of the defendants, Angel Angulo and Crystal Banuelos, had 179 of these imitated cards in New Jersey. Some of the banks that were affected include: Bank of America Corp, JPMorgan Chase & Co, Wells Fargo & Co, etc. It has been announced that Crystal Banuelo’s sentence is scheduled to be on February 23, 2016.

Daphne is a graduate accounting with a certification in forensic accounting at the Feliciano School of Business, Montclair State University, Class of 2016.

Posted by Daphine Llosa.

A recent legal issue involves money laundering, embezzlement and fraud. Money laundering is a form of obtaining money illegally, usually by using transfers between banks and businesses. Embezzlement is theft or misappropriation of funds. Fraud is a wrongful deception for the purpose of attaining financial or personal gain.  On Friday, October 23, 2015 the New Mexico Republican Secretary of State, Dianna Duran, plead guilty of fraud. The state attorney general, Democrat Hector Balderas, filed 65 charges against Ms. Duran in August 2015 which included; fraud, embezzlement, money laundering and campaign finance violations. Investigations revealed that she used about $13,000 of the donations from her campaign to clear gambling debt around the state and to cover other personal matters. In order to hide the transfers to personal accounts, Ms. Duran altered the campaign finance reports. Ms. Duran had a hearing with her defense lawyer, Erlinda Johnson, and after refusing multiple times from leaving office she resigned. According to the New York Times, in hopes that she can receive five years of probation and get spared prison time, Ms. Duran pled guilty to six out of the sixty-five charges; four misdemeanors and two felonies. She stated that for her best interests, her loved ones and for all of New Mexico’s residents; she will be seeking for professional help due to her non-ethical and corrupt actions.

It had been a little over 80 years since New Mexico had a Republican serve as secretary of state. She ranked as the second highest elected official in New Mexico, where she served as state senator prior to becoming the 24^th Secretary of State. Susana Martinez, Governor of New Mexico, received the resignation letter provided by Ms. Duran, which stated; ‘Although I may be leaving office, I shall always reflect upon the last 36 years of service, honored to work with you and other, serving the citizen of New Mexico.’ As of today, deputy secretary of state, Mary Quintana is fulfilling Ms. Duran’s place until the governor chooses who will be replacing her until the upcoming election in 2016. Any further and additional details or information regarding Ms. Duran’s replacement or charges will be released in the coming weeks. The degree of punishment and the formal legal consequences applied to Ms. Duran is scheduled to be on December 14, 2015.

Daphne is a graduate student in accounting with a Certification in Forensic Accounting, at the Feliciano School of Business, Montclair State University, Class of 2016.

Posted by Luca Aufiero.

In the article, “BizEquity Launches Online Valuation Tool for Accountants,” Daniel Hood discusses how BizEquity, an online business valuation system for businesses to be able to estimate the value of their businesses, launched a new product called Accountant Office. For accountants and advisors, this new business solution of BizEquity successfully improves the valuation process. Using a keen platform for its refined algorithms and big data knowledge, accountants and advisors will be able to provide clients with real-time awareness of what their business is really worth, more efficiently and cheaply. Accountant Office costs less than one-tenth of the average business valuation fee of $8,000. It can also deliver a valuation report in minutes compared to the average time of 3-6 weeks it takes for traditional business valuation firms to deliver a valuation. BizEquity’s business solutions help companies create, manage, and optimize its business valuations. This may revolutionize the business valuation landscape pertaining to forensic accounting as technology and data cloud services are evolving among the profession.

Currently, BizEquity is one of the world’s largest providers of business valuations, valuing more than 29.4 million companies around the globe. PrimePay, one of the nation’s biggest private payroll companies and a network of more than 10,000 accountants, will be exclusively distributing Accountant Office in the U.S. The founder and CEO of BizEquity, Michael Carter, wanted to expand the views of the capabilities that accountants are perceived at by demonstrating their value in business advisory and not just tax planning. Somewhat as their motto and the first thing that stands out on their website, reads “What’s Your Business Worth?” BizEquity conveys the importance of business valuation to owners and to those accountants and advisors who will benefit from these tools in order to better inform them. With proper valuation knowledge, companies are in a more desirable position in determining the fair value of selling a business, ability to secure financing, and striving for growth.

Luca is a BS and MS in Accounting, Forensic Certificate Program, at the Feliciano School of Business, Montclair State University. 

Reference:

Hood, Daniel. “BizEquity Launches Online Valuation Tool for Accountants.” Accounting Today. 20 Oct. 2015. Web. 20 Nov. 2015. http://www.accountingtoday.com/accounting-technology/news/bizequity-launches-online-valuation-tool-for-accountants-76144-1.html

Posted by Samar Baeshen.

According to an October 21, 2015 news article in The New York Times, “Criminals Should Get Same Leniency as Corporations,” there are many critics arguing that corporations trying to make a big effort to defend their misconducted executives ought to be treated like common criminals. In addition, Emmet G. Sullivan, a federal judge, thought that criminals should be treated like big companies. Due to Obama administration’s method which gives companies the opportunity to not have a criminal record, Judge Sullivan believes that individual criminals should enjoy the same chances. In fact, the Department of Justice officials concur with Judge Sullivan’s opinion, which criticizes the American criminal justice system, and encourage Congress to lower the adjudication standards. Meanwhile, the Justice Department issued a new memo recently and released new approaches to prosecute individual employees after years of accusations about Wall Street criminals.

According to Judge Sullivan, the court is frustrated that the postponed prosecution agreements are not being utilized to give the same chances to individual criminals without causing any negative effects on the criminal conviction. Moreover, there are lack of the postponed prosecution agreements, according to the Justice Department, for both corporations and individuals. However, comparing the number of cases against individuals and companies, cases against individual criminals are enormously more than companies.

In general, the target of the Judge Sullivan’s argument is to reduce the long Sentence for prisoners who did not commit violent crimes.

Samar is a graduate student in accounting at the Feliciano School of Business, Montclair State University. 

Posted by Luca Aufiero.

In the article, “Dealing with Fraud in Your Building – Forensic Accounting,” Steven Cutler discusses the types of fraud among co-ops and condos, the possible red flags, as well as how it may be perpetrated and deterred. Some signs of fraud from higher management could entail sudden lifestyle changes and lavish expenditures such as new expensive cars, residences, and exotic vacations. As there isn’t as much fraud today as there used to be, back in the 90s, there were two years where roughly 140 managing agents and 25 management companies were indicted for kickbacks. “Still, even today, there are enough instances of fraud to keep busy forensic accountants, real estate attorneys, and district attorneys” (Cutler). The more common type of fraud in a company is the misappropriation of cash. For example, management may use funds from the company to pay for personal expenses or use forged bank records to run multiple books.

More often than not, fraud is perpetrated by a member of the staff. This is all starts with the fraud pyramid: motive, rationalization, and opportunity. Some employees might not be monitored as much as they should or have certain access to records, giving them an opportunity to commit fraud. The motive is most likely to reside from a personal standpoint. Possibly drug related, family problems, or more commonly, financial problems. The rationalization behind the act might be that the person “deserves it” (sense of being underpaid), or “just borrowing money temporarily” (even though it isn’t). Some red flags among the financials might include: large number of unrelated transactions, unexplained changes to reserve funds, and missing accounting records.

If fraud does occur, it is recommended to create a paper trail to document items not only for attorneys, but for forensic accountants to investigate the damages. The forensic accountant looks at the banks reconciliations, statements, canceled checks, and bills paid to have to total admission to the records. This will then result in whether the damages were from gross negligence or fraud. At that point in time, the attorney will decide if it should be a crime (especially if fraud is involved) and therefore be reported and prosecuted. Some deterrent procedures include monthly reviews/reconciliations of the financials, control over collections (lockbox), and monitoring the work of others.

Luca is a BS and MS student in accounting with a certification in forensic accounting at the Feliciano School of Business, Montclair State University.

Reference:
Cutler, Steven. “Dealing with Fraud in Your Building – Forensic Accounting.” The Cooperator. Oct. 2015. Web. 20 Nov. 2015. http://cooperator.com/article/forensic-accounting