Posted by Natalie Kenny.

The parent company that makes Old Spice, Proctor & Gamble, is being sued by Rodney Colley of Alexandria, Virginia because of a defect in the deodorant. The plaintiff shared photos of himself with burns under his arms which he claims are from Old Spice deodorant. The plaintiff says he suffered “severe rashes, burning, and discomfort” after he used the product and he had to stop using it. In the photo, the rashes look severe.

Procter & Gamble, the parent company that owns Old Spice said that the people who experience rashes and irritation from using the deodorant are in the minority and only make up a small fraction of the company’s overall users. After news broke of this lawsuit, several other individuals came forward with stories about how the Old Spice deodorant gave them rashes and scabbing. The five million dollar lawsuit was filed in U.S. District Court in Ohio and is awaiting trial.

In my opinion, it is not okay for this deodorant to be giving people severe rashes. Even though Proctor & Gamble stated that only a small percentage of users get burns or rashes from the product that is simply not good enough. Consumers should not have to be concerned whether or not they will have a severe reaction to a product that they use every day.

I think that Proctor & Gamble should have to pay for the medical bills of the people who got severe reactions from this product as well as punitive damages to stop them from doing this and to get other companies to make sure their products are safe before selling them to the public.

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

Posted by Romelia Argudo.

Usually when an employee of a certain company works there for a long time, it is to their advantage as they have most likely gained experience for another upcoming job. Except in this case, Arthur Valdez was out of luck when he acquired a new job as Target’s chief supply chain and logistics officer. Having worked for Amazon.com for 16 years, Valdez has left his logistics position in this company and was sued for a breach of a “noncompete agreement.” These agreements ensure that an employee of a company, if they quit, will not compete against their business.

This can get a little tricky when switching positions at Amazon.com and moving to Target which is one of their biggest competitors. Amazon says they wish to prevent him from using the “confidential strategic knowledge” he possess from working in their company in his new job at Target. Because of this, Amazon has sued Valdez for the breech of noncompete agreement that binds him “to an 18-month timeout in which he cannot compete against his former employer.” It is said that over the span of 16 years, Valdez has gained knowledge on “’exact title and topics’ of a top secret meeting dubbed ‘Holiday Lessons Learned,’ which is ‘one of the most confidential aspects of Amazon’s analysis and planning’ and included ‘confidential analysis of Amazon’s competition against Target.’”

Amazon is not happy that Valdez has not specified his new roles he will be playing in Target which can harm Amazon. Most cases like these would settle before they are taken to court or with a lawyer, but until this point, nothing is being resolved and an agreement has not been reached yet. Apart from this, Amazon states “in the filing that Valdez’s 2015 compensation exceeded $1 million.”

Until something is settled for sure, Valdez will start his new position as a logistics executive.

Romelia is a marketing major at the Stillman School of Business, Seton Hall University.

Posted by Romelia Argudo.

One of the biggest setbacks for a company can be when they are hit with a lawsuit – especially one that involves settlements for 34 million dollars. Philips Respironics, Inc, known for their sleeping masks given to treat sleep apnea patients, was hit with a 34.8 lawsuit for violating the Anti-Kickback Statute. This “prohibits the knowing and willful payment of any remuneration to induce the referral of services or items that are paid for by a federal healthcare program Medicare. . .” In essence, this statute prohibits any exchange of value to reward the referral of healthcare program business. The United States alleged that Phillips Respironics, Inc. violated this law through means that allowed them to make a bigger profit.

The company sold their machinery to durable medical equipment (DME) suppliers. The deal was if DME suppliers would purchase Philip Respironic’s products, they would get free customer support for their clients to cover any of their needs. But instead, DMEs were charged monthly fees in accordance to the amount of patients that were using products from Philip Respironic’s competitors. So overall, these suppliers were being charged with fees if they supplied patients with products that were competitors of this company. This would drive DME suppliers to purchase more products from this specific sleep mask manufacturer.

US Attorney Bill Nettles says that “this office has made a substantial commitment to combatting fraud.” Not only has this move influence a consumers decision in what to purchase, but other companies as well. This was clear to Dr. Gibran Ameer who brought attention to this case. As a DME supplier worker, he noticed this and is now considered a “whistleblower” for informing US Attorneys of this wrong doing. As a result, Ameer is being rewarded $5.38 million for this moral act.

Special Agent Derrick L. Jackson of the Department of Health and Human Services says that “we will continue to investigate such business arrangements, which threaten the integrity of federal healthcare programs.”

In doing so, this encourages businesses to act as business ethically as much as they can as well as following business law.

Romelia is a marketing major at the Stillman School of Business, Seton Hall University.

Posted by Caleb Sink.

A Florida jury recently found Gawker Media responsible for $25 million in punitive damages for publishing a sex tape of Hulk Hogan. Hogan, a former professional wrestler claimed he did not know he was being taped. $15 million of was awarded against Gawker Media and the remaining $10 million will be charged against Nick Denton the owner. These punitive damages come in addition to the $115 million the jury imposed last week.

Hogan’s lawyers wanted to add punitive damages despite Gawker Media’s lawyer’s claims that the $115 million was “debilitating” enough for the company. Michael Sullivan stated, “The $115 million judgment is punishment enough and is already far beyond their means.” The company is only worth $83 million buy itself and Nick Denton has a total of $121 million.

In my opinion Gawker Media was in the wrong completely and definitely got what it deserved. However, considering the company is only worth $83 million, I feel as if the punitive damages on top of the $115 million were irrelevant, as it looks as if the company is already going to be depleted of all of its assets anyways.

Gawker Media expects the case to be overturned by an appeals court.

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

Posted by Matthew Carden.

Uber over the past few years has begun to take over for many taxis in many cities across the United States. In Newark, “There’s a war on wheels brewing outside the city’s two largest transit hubs.” This ordinance is referring to both Penn Station and the airport, where thousands of people travel to and from every day. In early January, Evans Anyanwu warned Uber that they were violating a city ordinance because the Uber cars are unlicensed taxis. Because of this, the City has said that they began towing cars on February 22 with no sign of ending the ban. The City was, “pushed largely by unions and other taxicab organization who say their profits have been cut by as much as 80 percent.” The taxi drivers had taken this into their own hands and were most likely the reason that an ordinance like this was put in place, because in January, they protested for regulation outside of Newark Airport.

Uber has not let this ban stop them from continuing their service throughout the Newark area. The article states that, “Uber, however, appears undeterred.” Instead of encouraging their drivers to stop, they have encouraged them to continue taking these routes. With Uber encouraging this practice, they may see their costs go up as they have promised to reimburse the drivers for anything that is to happen because of this ban. Uber in their statement in response to this said, “’Instead of trying to restrict competition and consumer choice, Newark should be welcoming the thousands of drivers who use Uber to earn income and support their families.’”

This situation could turn out to be either good or bad for Uber, but I believe the Newark is in the wrong here. The first question that comes to my mind when I read it is, how do they know it is an Uber? This is a case that Uber can most definitely win because this is similar to a case in New York verse the yellow cabs–and they won that.

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

Posted by Spencer Sink.

Volkswagen is currently in the process of being sued for deliberately manufacturing cars that essentially cheat the emissions test. This case is somewhat similar to the cases with Toyota and General Motors, as Volkswagen will most definitely be forced to compensate the current vehicle owners for selling faulty products. However, we will most likely see even higher punitive damages being paid in the Volkswagen case because of the fact that Volkswagen admitted to intentionally cheating on emissions. The Toyota and General Motors cases were both honest mistakes made by the companies.

Volkswagen was given a short amount of time to attempt to find a way to mechanically fix the issue in the cars, and make them environmentally acceptable. However, even if they did fix the emissions, either the fuel efficiency or the overall vehicle performance would change, forcing Volkswagen to compensate owners for the loss in value.

What Volkswagen did was completely wrong, and must be punished accordingly. Deliberately cheating the emissions tests, and creating excess pollution, is unacceptable. If it were up to me, I would force Volkswagen to pay high punitive damages to ensure that nothing like this ever happens again. Volkswagen owners should be compensated accordingly for being blindly brought into this situation.

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

Posted by Spencer Sink.

Recently, Arthur Valdez, a former employee of Amazon.com, was hired to work for Target as their chief supply chain and logistics officer–but there may be a problem. The problem is that he could be forced to disclose classified information about Amazon.com and how they run their business. Because of this, Amazon.com sued Valdez for an unspecified amount of money on the grounds of the “non-compete clause” in his employment contract. The non-compete clause states that one cannot work for a rival company of his previous employer until 18 months have passed.  Valdez was hired before the required 18 months had passed.

This is a huge case for Amazon.com, as Target has recently been trying to increase sales in their online store. Valdez, having worked with Amazon.com for 16 years, could most definitely share all of the secrets to success with Target, which would negatively affect the business of Amazon.com. Target is defending Valdez by saying that they have taken the necessary steps to ensure that the secrets of Amazon.com are not disclosed to them.

It is going to be interesting to see what happens with this case. If I had to make a prediction, I would say that Amazon.com will win this case, as I feel that Target has no real evidence supporting their statement that Valdez has not disclosed any information to them.

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

Posted by Brandon Glover.

On February 23^rd, Marc Moschetta filed a lawsuit against big-name company Wal-Mart for, “deceptive business practices.” A jury trial is being sought on the basis of “material misrepresentations.”

Moschetta purchased “Great Value’s ‘100% Grated Parmesan Cheese,’” but it was later found out that it contained 7 to 10% cellulose, which is a filler that stems from wood chips. Issues such as this one are not completely unfamiliar to the legal system. In 2012, a Pennsylvania cheese vendor was investigated for the use of cellulose in their products. The vendor was also accused of mixing in various types of cheeses in their products, while simultaneously testing positive for Listeria.

Bloomberg News has highlighted cellulose findings in various cheese products. Companies such as Whole Foods, Jewel-Osco, and Kraft Heinz as well have been guilty of such findings. Attorney Jason Sultzer, states “[that] the case isn’t about consumers getting sick. Regardless of the price of the product ($2.98), people are still buying the product based on the label.” Sultzer tries to gain public sympathy to the cause by alluding to parents giving it to their kids with their food.

Wal-Mart spokesman Randy Hargrove told CNBC, “we know earning customer trust starts with high standards for the products we carry. We take this matter seriously. We will review the allegations once we have received the complaint and will respond appropriately with the court.”

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

Posted by Brandon Glover.

Andy Beshear, Kentucky Attorney General, claimed that Volkswagen violated consumer protection law through a cheating emission scheme. Beshear is seeking civil penalties and restitution for the owners of the 3500-plus owners of Volkswagen registered in Kentucky. Regulators state that the “software . . . was designed to cheat on required emissions tests.” The suit was filed in Franklin County Circuit Court in Frankfort with belief that Volkswagen, “must be held accountable for false promotion of its vehicles.”

Jeannine Ginivan, a spokeswoman for Volkswagen, stated the company does not normally comment on legal matters. Despite this, she said that the company is “working with federal environment regulators and others to resolve the matter as quickly as possible.”

Beshear, on behalf of the state of Kentucky, is not the only state to file a lawsuit. Texas, New Mexico, New Jersey and West Virginia, have all filed lawsuits as well against Volkswagen. In addition to the aforementioned lawsuits, Volkswagen also faces hundreds of suits from actual vehicle owners. Prior to taking these suits into account, “the company potentially faces more than $20 billion in fines from states and federal regulators.”

Volkswagen confessed that it used illegal software in its “Clean Diesel” engines in September. The software helped vehicles pass emission tests, while emitting nitrogen oxide that proved to be harmful into the atmosphere when operated.

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

Posted by Brandon Glover.

The U.S. District Court in Riverside will be the venue of the case between tech giant Apple Inc., and the U.S. Federal Government. The FBI has requested Apple’s help in bypassing the iPhone encryption security of one of the shooters in the San Bernardino incident. The judge who presided over the initial case, ruled in favor of Apple, stating “prosecutors were stretching an old law ‘to produce impermissibly absurd results.’”

Prosecutors argued that the phone belonging to Farook most likely contained evidence from the attack on December 2, 2015; where he and his wife, Tashfeen Malik, murdered 14 people. The two were later shot and killed in a police shootout. The FBI believes the couple was inspired by the Islamic State, and that the unlocking could reveal details about the attack as well as potential collaborators.

The Federal Government has argued that Apple could easily create a software that could bypass the security of the phone, retain its information, and then destroy it shortly thereafter. However, Apple has responded to that claim, stating “that creating software is a form of speech and being forced to do so violates its First Amendment.”

The federal government is currently appealing the ruling, which will most likely reach the Supreme Court.

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

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 Trisha Daraji.

After the recent recalls in Ford pick-ups for braking issues in May, Ford Motors is back in the limelight for similar issues. In the previous recalls, the malfunctions in the vehicles occurred from an internal leak that caused the cars to lose braking function and have a loss of brake pressure. Last May, there were 225,000 models affected with the problem which all had the 2.5 EcoBoost engine (Valdes- Dapena, CNN Money). The cars involved in the new recalls are the same models that have the same engine, and have the similar problem of break failures.  Ford Motor Vehicles is now under investigation for the break failures reported by 25 owners. The malfunctions that occurred in May involved Ford’s 2013 and 2014 F-150 pick-up truck models, and similar malfunctions were reported in the 2015 and 2016 models. Not only are the models some of Fords most popular vehicles, but they are also the top selling vehicles in the U.S. The federal auto safety regulations agency has launched the investigation, and the National Highway Traffic Safety Administration is now considering expanding the recall launched in May to include the new model years.

Aside from the emerging braking problems in Ford’s most popular and best-selling vehicles, the company is under another investigation for safety issues concerning door-latch warning signs and steering issues. “The U.S. National Highway Traffic Safety Administration said today it was opening a probe into 380,000 2011-2013 Ford Edge SUVs after receiving 1,560 reports of ‘door ajar’ lights” (Shepardson, Automotive News). Owners reported that doors would not properly close and would swing open while the vehicle is moving. One injury has been reported, but there have been no reports of crashes. The recall for door latches has been expanded from 1.5 million vehicles to 2.4 million. A separate investigation was opened for the steering problems found in 262,000 2010 Ford Fusion cars. The failures in the system caused 12 crashes and four injuries (Shepardson, Automatic News).

From the recent recalls, it is estimated that 642,000 cars could be affected. Not only has this become a growing safety issue for Ford car owners, but it has also taken a huge toll on the company’s profit and reputation. The door-latch issues have resulted in six different recalls of 4 million cars since the year 2014. The new recall has been expanded and include Ford C-Max & Ford Escape (2013-2015), Ford Focus (2012-2015), Ford Mustang & Lincoln MKC (2015), and Ford Transit Connect vans (2014-16). The recalls have cost the company to cut its pre-tax profit from $10.8 billion to $10.2 billion due to the $640 million charges from recalls (Shepardson, Automatic News).

Trisha is an accounting student at the Feliciano School of Business, Montclair State University, Class of 2019.
Works Cited:

http://www.autonews.com/article/20161003/OEM11/161009993/ford-vehicles-being-probed-by-u.s.-over-door-latch-lights-steering

http://money.cnn.com/2016/10/04/autos/ford-f-150-brake-investigation/

Posted by Kayla Caveny.

The United States and Europe both have emissions standards for their vehicles. The standards are in place to limit the amount of pollutants the vehicle may make. However, there is a way to bypass those standards, illegal of course. This certain device is called a “defeat device,” which is any apparatus that unduly reduces the effectiveness of emissions control systems under conditions a vehicle may reasonably be expected to experience.

On September 18, 2015 U.S and European officials accused Volkswagen and Audi of installing these defeat devices within numerous diesel cars made between 2009 and 2015. The U.S. Environmental Protection Agency the cars that were tampered with “included software that circumvents EPA emissions standards for certain air pollutants.” The vehicles that were effected only release the EPA’s emissions standards when the car is actually being tested. The vehicle actually produces nitrogen oxides at up to 40 times the “legal” standard. Because of these vehicles being tampered with over 11 million Volkswagen and Audie’s have now been subject to recall. Volkswagen did admit to not complying with governmental standards. However, the makers of Volkswagen and Audi told the owners of these cars that “this is an emissions issue, your vehicle is safe to drive.”

Volkswagen and Audi’s actions have now caused several lawsuits, especially within the state of Tennessee. Most of these lawsuits are against Volkswagen and many of the dealers within the United States. According to John Willis, a lawsuit in Chattanooga, Tennessee’s Federal Court included seven plaintiffs who sued Volkswagen’s parent company and a Tennessee based dealer for fraudulent concealment and violating Tennessee consumer protection law. They thought they were purchasing “green” vehicles that met or exceeded federal emissions standards.

The plaintiffs believe that once Volkswagen completes a government mandated recall to remove the illegal defeat devices, the cars will not perform as they were designed. In the end Volkswagen has a settlement of 10 billion for vehicle buybacks, lease terminations, and owner compensation, as well as a 2.7 billion dollars towards environmental programs to reduce polluting nitrogen oxides in the atmosphere. Volkswagen must also spend another 2 billion to promote zero-emission vehicles, which is even more than what they had originally planned to spend on the technology.

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

References:

http://www.bbc.com/news/business-34324772

http://www.edmunds.com/car-buying/faq-volkswagen-diesel-emissions-settlement.html

Posted by Majd Abusadah.

Even though that companies usually have their own accountants who observe accounting transactions, there are still chances for fraud, and this can cause and increasing need for forensic accountants. As a result, universities started to provide courses in forensic accounting for people who are interested in a job as a forensic accountant, such as Florida National University (FNU).

While traditional accounting discusses the financial information and how to provide this information for different users, such as investors and mangers, forensic accounting is used to investigate and analyze financial information for determining if there are any illegal transactions that may have occurred. The forensic accountant’s role is to search and investigate an extensive domain of various crimes. For example, the crimes could involve company health care fraud, money laundering, and contract disagreements. Also, the forensic accountant might be required to be experts witnesses during a trial. Forensic accountants might use their skills in personal matters, such as: dissolution of a marriage where they have to study the financial positions for both parties and their spending for better settlement.

The discipline is starting to notice many needs that go beyond accounting and finances. According to FNU, “the need for skill sets more accustomed with the legal process and computer technology are highly sought after and play a crucial role in determining the outcome of courtroom events.” Forensic accounting affected by few factors such as appearing of a new generation of business professionals and hopeful entrepreneurs. There are around 500,000 new businesses each year and some of them use technology for their transactions. In fact, this extended the forensic accountant’s role to the digital world. Even though technology has a strong protection system, there is still a chance of risk, so it is important for forensic accountant to update their skills in this area.

Having traditional accountants is not enough for companies who want to protect their financial health. This is because their role does not include anything about how to investigate the financial information, hence, the need for forensic accountants.

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

Reference:

(2015, May 05). The Growing Importance of Forensic Accounting. Retrieved from http://www.fnu.edu/growing-importance-forensic-accounting/

Posted by Ivanna Klics.

There has been quite a ruckus at Wells Fargo as they made headlines for causing fraudulent transactions that have not been authorized by the customers themselves. Wells Fargo is being accused for creating banking and credit card accounts without the permission of its customers. Who are the customers more to blame then the CEO, John Stumpf; however, in his defense, he is not capable of overlooking every branch in the bank. Stumpf’s leaders have not only stepped out of their comfort in the company but the reputation of the company, as well as opening up the door to a criminal investigation case.

The investigation has put the company to shame. Stumpf appears to be clueless of what has been going on literally right under his nose. Because it is almost impossible for these events to occur overnight, management should have known about it for a long time. Whether Stumpf admits it or not, Charles Gasparino stated “he and the bank will still face numerous civil and criminal inquiries for years to come.”

Although the company does not mean all harm, Wells Fargo is still one of the most profitable banks worldwide; however the company’s perception has had a dramatic change. Currently the company is facing a congressional investigation, and who knows if they will be able to build back their reputation.

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

Posted by Ola Mohammed Alghasham.

The world encounters cases where frauds are committed by white collar criminals. Executives whom fight against fraud are beneficial for the company. Although the board and management make strong efforts in composing fraud preventing policies, there are several behavioral, environmental, and fraud assessment elements which are ignored during the composition of such policies and their absence provides shelter to the fraudsters. White collar criminals often attain confidence from their role in the organization. This confidence gets transformed into arrogance which prohibits the criminal from applying organizational policies and rules on himself, as an employee of the company.

There is no doubt that the top management always looks for the creative and clever individuals as employees. They forget, however, this creativity and cleverness can be used against the company instead of in its favor. Employees with these traits can cunningly commit frauds by practicing unnoticeable unethical behavior. Companies should execute proper controls with the recruitment of talented people. The tone of top management can either promote or discourage the ethical behavior because it is supposed to set an example for the rest of the organization. The whistle-blowing attitude is shaped by the organizational culture. Moreover, an illogical increase in pay, without any improvement in the performance, allows the fraudsters to continue their unethical activities.

Board members and executives should identify the fraud tactics and fraud hidden strategies of these individuals to compose a fool-proof risk assessment process. Major warnings can appear from the financial data (e.g. unusual, frequent or large transactions), documents with missing or incomplete information or suspicious signatures, poor controls (e.g. lack of monitoring, poor reconciliation of accounts, lack of position to manage conflicts of interest), behavior (e.g. unstable behaviors, mismatched lifestyle with income, high expectations family, and job dissatisfaction). Management must implement strong controls in the day-to-day business operations to avoid fraudulent activities. The board must adopt a proactive behavior in the elimination or early detection of fraud by establishing an audit committee with full authority, monitoring transactions, promoting and maintaining an ethical environment, and composing a procedure for the reporting of fraudulent activities. The board must compose and enforce certain strategies to cope up with the frauds. The executives must develop an ethical environment for keeping the employees loyal with the company and directing the human talent towards the betterment of the company.

Ola is an graduate accounting major with a certification in forensic accounting at the Feliciano School of Business, Montclair State University.

Source:

Marks, J., (2012), A Matter of Ethics: Understanding the Mind of a White-Collar Criminal, Financial Executive, pp. 31-34. Retrieved from www.financial executives.org.

Posted by Steven Otto.

The San Francisco rating company, Yelp, is not found liable for negative reviews posted on its site. This is because it relies on ratings posted by users, not the company itself. A federal appeals court on Monday, September 12, dismissed a libel lawsuit filed against Yelp by Douglas Kimzey, the owner of a Washington state locksmith company. The 9^th U.S. Circuit Court of Appeals ruled that, under federal law, Yelp is not liable for content it gets from its users. The features of Yelp are based on users’ input and it is not content created by the company, whose site helps guide people to anything from restaurants to plumbers and much more.

The court said that Douglas Kimzey’s business received a negative review on Yelp in 2011. Kimzey claimed that the negative review was actually meant for another business, and claimed that Yelp transferred the review to his business on purpose in an attempt to extort him. He claims that Yelp was trying to force him into paying to advertise with Yelp. The appeals court said that his allegations were not substantial and that there were no facts at all supporting Yelp fabricating content under a third party’s identity. Circuit Judge M. Margaret McKeown, writing for a unanimous three-judge panel decision, said “We fail to see how Yelp’s rating system, which is based on rating inputs from third parties and which reduces this information into a single, aggregate metric, is anything other than user-generated data.”

The appeals court previously ruled under the 1996 Communications Decency Act that “websites that provide what are known as ‘neutral tools’ to post material online cannot be held liable for libelous material posted by third parties.” Kimzey’s claim that Yelp should be held liable for distributing reviews to search engines was dismissed by this act. The appeals court stated that distributing the content does not make Yelp the creator or developer of the content.

Aaron Schur, Yelp’s senior director of litigation, said the appeals court “rightly confirmed Yelp’s ability to provide a forum for millions of consumers to share their experiences with local businesses.” Kimzey said he lost 95% of his business after getting one star on Yelp and said, “If you have a one-star rating, people won’t go near it (the business). They don’t care if you’ve been in business for one week or 25 years.” Obviously upset over what had occurred to him and the ruling, Kimzey, serving as his own attorney, plans to appeal to a larger court panel.

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

Posted by Chris Widuta.

Did you ever stop to notice how busy life can be? Either you’re on your way to your parents, maybe going to class that meets twice a week during rush hour, or off to the gym to see your friends. Life got busy really quickly for me and I am still managing to handle the responsibilities that come with it, which includes bills, an apartment, a relationship, and most importantly my future.

On a Wednesday at nine o’clock in the morning, I was headed down the highway doing a steady 20-mile per hour in light traffic. I was headed to meet with my college professor to discuss statistics before the final examination. The entire drive was very smooth with no one cutting me off. At the same time, I thought the slow moving traffic would make for a great time to multitask. Isn’t it true that more and more people getting more done by doing two things at the same time? Walking and talking is more than simply talking, obviously. For me, that Wednesday morning I was working with my television provider to opt-out of the TV service I thought I didn’t need. Cable is expensive and those types of calls are stages of perpetual holds. I was multitasking.

I was just a few feet away from my exit, blinker on, driving with both hands on the wheel, using my cell phone by holding it with my shoulder. The state trooper was already conducting his business that morning in the emergency lane, when he turned and saw me, communicating. I thought nothing of it as I knew I was within the law. I continued to proceed off my exit, slowly accelerating since traffic was clearing up and all of a sudden, red and blue lights jumped right into my rear-view mirror. This trooper was able to do two things at once, too! The amount of time it took him to leave that scene and open another had to be less than 30 seconds, and quite frankly I was impressed.

He pulled me over and asked for all the necessary documents. I always ask why I was pulled over, because I know that by most tickets are written by the discretion of the officer. He stated that I was on my phone and quite frankly I agreed. I was on my phone, and I stated to him that I was not holding it in my hand. I stated that I had both hands on the wheel, and I asked the officer if he saw me holding the wheel with both hands, at the 10 and 2 position. I believed that if he was able to see my head and phone, he must have been able to see both hands, which would be unmistakable, being about chin level from his vantage point.

At this point, the officer started to look like a State Trooper. He had the hat and was very serious, more serious than a local police officer. I knew that he had to be in a bit of a hurry when he gave me my insurance and registration back immediately and held my license. The trooper then stated that it didn’t matter how I was holding the phone, but the fact that I was on my phone was worthy of a ticket and illegal. I didn’t make a fuss of it and proceeded to my stats lesson.

It took me only a few minutes to research the most recent statue description for 39:4-97.3, or “Operation of a motor vehicle while using cell phone.” The statue number was right on the ticket, and a quick Google search pulled up some results. I proceeded to the 215th Legislature because that lead to the most recent additions to the law. I know how important it is to know current law rather than outdated information from the Internet. After reading through the entire statute, I came up for air and formed a judgment. The statute clearly stated in Article 2 Section 1: “The use of wireless telephone . . . device by an operator of a moving vehicle on a public road or highway shall be unlawful except when the telephone is hands-free wireless telephone or the electronic communication device is used hands-free.” That line right there gave me great hope that I was within the law, and hope that my day in court I could prove that. I was mentally preparing for a trial, pro se.

My first appearance in Municipal Court came 11 days later. Due to the fact that the situation was minor, and really only a monetary fine, I knew that the “ball was in my court.” You see, most municipal courts just love these kinds of evenings. People who are “money right and time poor” just plead guilty, pay the fine, and go on with life. The municipal court makes hundreds of thousands of dollars on these court nights, especially since the average fine that night was around $290 a person. These fines are like a tax on a poor decision.

This situation is the exact opposite. I am a student with a part time job, 15 credits, and financially responsible, who has some extra time to save some money. The fine was $200, a pretty large amount, and something I couldn’t lose. I was charged to go in with the prosecutor and plead my case. The first step I took was to sit down with the prosecutor and told him I plead, not guilty. He told me that by pleading not guilty I would request to have a trial, acting pro se. The prosecutor aggressively asked me if I was ready for “trial” as if it was a big and scary event. Of course, I knew this meant a trial so I was prepared. I also told him that I would be sending an “order” for discovery, which was my Constitutional right. He repeated what I said in a joking manner as if I was doing something wrong, but I confirmed that was what I wanted and thanked him for his time. I proceeded to sit down in the court room, second row from the font. I chose the second row because I wanted the judge to see my face and I wanted to be in the right position to hear the lawyers around me and the cases being presented that night. It was important to hear everything that was said because I was going to eventually head to the bench.

I took notes, studied, and remembered what the judge and prosecutor said for over 4 hours before I had the chance to speak. They called my case. The judge read the statute, told me the fine, and asked how I plead. After a moment or two of silence, I clearly stated “not guilty.” I may have been trembling a little on the inside, but it was important that he heard no wavering in my voice. The judge stated that I should prepare for a trial, but included a certain lead that gave me great hopes; the judge said, “If that phone was in your hand, you’re breaking the law.” I thanked him, and listened to him say that I would be getting a trial date. I walked out of the court room almost 5 hours later.

I quickly wrote up an request for the prosecutor. This official letter included my summons number, the date and who I was. In the order, I reminded him that it was my constitutional right for this discovery. I asked for all recordations of the interaction, including but not limited to, officers notes, audio, and dash cam video.

Preparing for the case was a matter of determining what facts were going to be most important to getting the charges dismissed. It was imperative that I used the officer’s comments against statute and the judge’s interpretation of the law. I truly believed that I was within the law, so it was relatively easy to find good reasons to throw this charge out. It was also clear to me that I would be making decisions based on political decisions; to be exact, I realized that the courthouse was making a bet that the State Trooper would be a witness and testify, but more on that later.

Weeks went by and a discovery packet was never sent. It was the day before the trial date and I called the courthouse to speak with the court clerk. I had told her I have not received discovery and asked for a new date. She said that she could not give one and trial will still go on tomorrow. This was actually good news. Because it is my Constitutional right to have discovery, I knew that the court would not judge against me, and at this point, the worst that could happen would be a new trial date. I could live with that.

I appeared to the court house dressed well. I went to the prosecutor’s office to speak with him, mainly on the fact that I have not received discovery. He was surprised to hear that I sent an request and he never received it. I reminded him of his words and what address to use. He also included a very important hint of what was to come. The prosecutor told me that the witness, the trooper, was not at the trial. This means that the only witness that the State has did not show up! I knew my rights under the Confrontation Clause of the 6th Amendment that, “in all criminal prosecutions, the accused shall enjoy the right . . . to be confronted with the witness against him.” These new facts greatly swayed my emotions to believe that I had a chance to get this dismissed that night. I was excited to sit in the court room.

Surrounded by lawyers, I was attentive and engaged. Every poor soul that stood up there took the charge and paid the fine. I prepared and thought of a response for what I would say for every one of the questions that the judge asked. Many other people had trials that day, and most if not all led the accused to lose their case. I did not give up hope, as I knew I had a different tactic. Instead of arguing the law, I planned to argue why the rules of the court should sway the judge to dismiss this case. They called my name and I felt much more confident this time around. All the possible scenarios played through my head already and I was ready.

The judge read the charge as I laid my papers on the table. Before I looked up, the judge quickly and effortlessly offered to cut the fine in half. This was completely arguable, I thought to myself. I said was that I was not granted my Constitutional right because I did not receive discovery. Before he said anything, I handed the officer a copy of the letter I sent to the prosecutor. He read it and asked a few questions about what I was requesting. The judge specifically asked how I knew that the interaction with the officer was recorded. Quite frankly, I assumed that it was recorded, I didn’t know for a fact, but I didn’t let him know that. I answered his question by referring to the fact that this was a state trooper and I believed the State installed video long ago, and how important it is to have video for more important interactions. He proceeded to ask about recordations, which I also requested.

The prosecutor followed up with a statement that the officer, who was their sole witness, was not present. He asked if it would be okay to reschedule for another date. I quickly returned his comment by asking for a dismissal. The judge rebutted with some guilt tripping remarks, including that ever since 9/11, State Troopers are very busy, and that certain arrangements for special occasions are required. I wasn’t going to fall for this guilt trip. It is important for the witness to be present at any trial, especially this one. I responded with the fact that this was a trial and asked if a trial is important enough to request their witness to be present. I also stated that he should have been subpoenaed for the trial. The judge did not respond. I asked to kindly accept my motion for a dismissal.

After what seemed to be an eternity, the judge looked up and said, “Case dismissed.” His words were truly the most relieving and gratifying two words I could have possibly heard. All of the hard work and time I put in to this exercise, not only saved me the $200 fine, but I confirmed to myself that I could stand up to my opponents and be victorious. The best part of this was, I didn’t even have to argue the law, I used the law in my favor and the judge nor could the prosecutor do anything to stop me.

Chris is a business administration major with a concentration in management of information technology at Montclair State University, Class of 2016.

Posted by Cynthia Mihalenko.

JBS’s plan to list shares on the New York Stock Exchange are uncertain now due to their legal issues. The company, located in Brazil, is the world’s largest meatpacker. Plans for a global reorganization were in place to try and boost their company’s value. JBS is already in the U.S. market, as they own Pilgrim’s Pride and Swift & Company. The new company they would reorganize into would be called JBS Foods International and would be based in Ireland.

Current developments have both JBS’s Chief Executive Wesley Batista and his brother, Chairman Joesley Batista, suspended from managing their companies until the investigation is over. JBS has not announced a new replacement and this has also fueled speculation that JBS’s plans for global reorganization are on hold. Company spokespeople have denied they are changing their plans and also denying any wrongdoing by the Batistas. One investigation is the overbilling in government contracts where some funds were paid as bribes to politicians. Another investigation is whether the company received favorable treatment from Brazil’s National Economic Development Bank. Analysts at some of Brazil’s banks have expressed concern that the legal problem could delay the reorganization as Guilherme Figueiredo, a fund manager at Sao Paulo base investment firm M. Safra states that “Our feeling is that the new (corruption probe) will at least delay the NYSE listing.”

Investors are rightfully fearful of JBS, now that it is under this investigation. No one wants to invest in a company if their CEO cannot be trusted. However, the Wall Street Journal interviewed several analysts and they knew of a large pool of talent that the company could tap into if they needed someone to take over should Wesley Batista step down. This should help alleviate some of the investor’s concerns.

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

Posted by Mariafernanda Ayin.

Best Buy is considered one of the biggest electronic selling corporations, but not even the biggest companies can avoid problems. Best Buy has been selling products like TVs, computers, and appliances such as washing machines that have had recalls.  These recalls have been one of the biggest headlines in the past couple of months in the electronics industry.

Federal Law states that it is illegal to sell and distribute products to consumers that have been publicly recalled. Best Buy, allegedly knowing that they were selling recalled products, told the U.S. Consumer Product Safety Commission that they had created measures to stop the risk of selling recalled products, however they continue to do so. Therefore, U.S. Consumer Product Safety Commission decided to penalize Best Buy because the company was not able to effectively create procedures to be able to identify, separate, and avoid selling recall products. In addition, Best Buy failed to block the product code which caused them to get erroneous information that indicated that the recall product was not in inventory.

Best Buy is being blamed for selling over 16 different products and a total of 600 recall items from September 2010 through October 2015—400 of the items being Canon cameras. Some of the items sold had a risk of skin irritation, and even catching on fire, which could have caused enormous harm to the customers. Best Buy is a company that has shown a clear lack of ethics by knowingly selling and distributing recall products just to make a profit, not caring about the well-being of their customers. This unethical act caused Best Buy to settle and pay $3.8 million of civil penalty in thirty days and in addition the company needed to create a compliance program to show that they are strictly following the laws and regulations of the Consumer Product Safety Act.

After the settlement was made, Best Buy sent a spokesperson to publicly address the situation, making an announcement after the settlement, “we regret that any products within the scope of a recall were not removed entirely from our shelves and online channels. While the number of items accidentally sold was small, even one was too many. We have taken steps, in cooperation with the CPSC, to help prevent these issues from recurring.” (Kieler).

This whole dilemma that Best Buy has been through has put them in the eye of the public, and could of possibly affected their sales. However, they still remain one of the biggest companies in the electronic business, and most likely will surpass this situation.

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

Posted by Radhika Kapadia.

The real cost of bribery is a question that often lacks a definitive answer.  It seems that Och-Ziff Capital Management, a hedge fund headquartered in New York City, is learning a hard lesson for allegedly engaging in bribery in Africa.  The firm is set to pay a hefty price of $412 million dollars, but the SEC has added the implicit cost of hindering fundraising by insisting that the firm clear any potential deals with investors with state regulators, adding considerably lengthy minutes and cumbersome dollars to the fundraising process.

Because of the massive bribery allegations, the firm was unable to obtain a waiver for the penalties corporations subject to civil law enforcement sanctions or criminal charges, such as bribery, typically face.   As a result, the company will be faced with the tremendous cost of an increased fundraising process and the more-than-ever watchful eye of the SEC over future investment transactions.   In the burgeoning era of bribery cases, the question of whether dollar penalties are truly enough to deter corporations from engaging in illegal acts is often difficult to assess.  However, the SEC is beginning to believe that financial consequences, coupled with other implicit penalization costs will truly begin to reduce bribery within the corporate world.

The allegations against Och-Ziff are primarily as a result of their dealings with Dan Gertler, an Israeli diamond-trade millionaire.  According to the Wall Street Journal, Gertler was known to use political connections in Africa to defeat competitors.  The Wall Street Journal noted that approximately “$250 million of Och-Ziff dollars were used to bribe the current president of the Democratic Republic of Congo in exchange for diamond mining rights.”  Despite blatant warnings and advisement from their lawyers, Och-Ziff executives, such as chief executive Daniel Och, chose to deliberately ignore corruption allegations against Gertler. Subsequently, the African subsidiary of Och-Ziff pleaded guilty to conspiracy to commit bribery, resulting in one of the largest settlements under the Foreign Corrupt Practices Act.   It seems that Och-Ziff is slowly learning that the true cost of bribery is pervasive, and that ignorance truly is not bliss.

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

Posted by Ashley Torres.

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

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

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

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

Posted by Kirsten T. Rewekant.

A somewhat recent case, Ellis Vs. Cartoon Network, Inc. shows how old statutes can be in conflict with the new and always updating technology. Ellis uses the Cartoon Network app on his android device to watch popular television shows that Cartoon Network airs. This is a free service, which you could choose to upgrade to pay for exclusive content that the free app does not allow others to see. When signing up for this extended service, you would create a profile with personal information that Cartoon Network would be available to see. Ellis had decided the free version was good enough for him, and therefore, did not give Cartoon Network permission to obtain any personal information.

Cartoon Network uses a service called Bango, which allows them to assign an ID number to everyone who views their content, free service or extended. This service does not know exactly who you are with any personal information, but is essentially learning who you are by linking all the shows you watch to your ID number, and therefore, learning what you like to watch. Through the service, the company is getting an understanding of who you are. Ellis tried to argue this to the court.

The court heard arguments as to whom is considered a consumer or producer. Cartoon Network argued Ellis is not considered a consumer under the definition of the Video Privacy Protection Act (VPPA) because he does not provide any “personal identifiable information.” But Ellis argued, this ID number does show a side of his personality and gives the company his personal information. Finally, the court needed to decide whether Ellis can be considered a subscriber to Cartoon Network, which makes him a consumer under the VPPA. To be a consumer under the VPPA, you do not have to pay for a service, log in, or create a profile.

Overall, the court ruled Ellis as not a subscriber under the VPPA for not signing up for an account, providing no personal information, having no profile, not paying for the service, and he is not considered to have a committed relationship with Cartoon Network to obtain the exclusive content they offer.

Some issues with this ruling includes the fact that if you were to visit Cartoon Network on your web browser, you would not be assigned an ID number, as the app does. Another issue with this case is the very little distinction between downloading the app and being a subscriber to Cartoon Network and how these two do not show a difference in commitment. After this case, there are still questions regarding the VPPA regarding privacy, and therefore, there may need to be some revising.

Kirsten is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Sara Firnstein.

Everybody knows that General Motors, or “GM,” has had its fair share of issues throughout the years. Many recalls have been raised based on multiple different issues. In 2014, GM came out and recalled over 3.4 million cars because of an ignition switch issue on top of the already 2.6 million small cars they recalled four months earlier to fix the same issue. GM said that they needed to change the keys to these cars. The major issue that prompted this recall is that the switch could rotate out of “run” if the key has excess weight on it. This could lead to the car shutting off the engine and then the power steering with become disabled, leaving the driver without any control. This recall had an effect on cars ranging from 2000 to 2014.

The most surprising facts about this recall is that after the first recall of 2.6 million small cars, GM has only repaired seven percent of the vehicles. This leaves ninety-three percent of the recalled cars not fixed yet, and another 3.4 million cars just recalled, which obviously haven’t been fixed yet either. Also, the effect of the first recall has caused a minimum of 54 crashes and 13 deaths, but lawyers who are suing GM say that there have been at least 60 deaths. The deaths from this issue are the most surprising, but also “GM has acknowledged knowing about the problem for more than a decade, yet the cars weren’t recalled until this year” (CBS News, 2014).

An issue that arose from these ignition switch recalls are the massive amount of lawsuits filed against GM. This has led to many different court cases and GM has tried to avoid lawsuits that deal with cars that were made by the old, pre-bankruptcy GM.  Recently in July, the “U.S. Second Circuit Court of Appeals overturned a bankruptcy judge’s ruling this week that had protected GM from those lawsuits because of the company’s 2009 bankruptcy restructuring” (Bomey, 2016). Because of this ruling, it may expose the new GM to liabilities for a defect that killed a minimum of 124 people and injured over 275 more in the small cars that were made by the old GM before bankruptcy. This ruling gives life to hundreds of cases where the victims decided to take their chances in court and refused to settle. Attorney Robert Hilliard says that he is happy for his clients because for years “the victims of the GM ignition switch have had their claims languishing in bankruptcy court and now these folks will have their day in court” (Bomey, 2016). These victims aren’t going to back down and GM has to continue to deal with the old GM car lawsuits along with the new GM car ignition switch lawsuits. GM is not out of the clear just yet, as they have to deal with these lawsuits that can now proceed based off of the court’s most recent ruling.

Sara is a criminal justice major with a minor in legal studies at the College of Arts and Sciences and the Stillman School of Business, Seton Hall University, Class of 2019.

Works Cited:

GM recalls 3.4 million more cars for ignition defect. (2014, June 16). Retrieved September 26, 2016, from http://www.cbsnews.com/news/gm-recalls-3-16-million-cars-for-ignition-problems/.

Bomey, N. (2016, July 14). Court: Ignition-switch lawsuits against GM can proceed. Retrieved September 26, 2016, from http://www.usatoday.com/story/money/cars/2016/07/13/general-motors-bankruptcy-ignition-switch-lawsuit/87029916/.

Posted by Gabriella Campen.

Unfortunately, in this day and age being well-known in Wall Street circles also happens to be synonymous with being well known by the SEC. The SEC has recently charged hedge fund manager Leon Cooperman, 73, of insider trading by using his easy access to executives to gather information, which he used to buy securities from a company called Atlas Pipeline Partners.  Cooperman’s information led him to buy more securities in the firm, right before the stock’s value soared over 30% due to the company’s $682 million dollar sale of a natural gas processing facility.

After the suspicious buy, the SEC filed a federal lawsuit in Philadelphia, and accused Cooperman of abusing his access to executive information, “By doing so, he allegedly undermined the public confidence in the securities markets and took advantage of other investors who did not have this information,” said SEC Enforcement director Andrew Ceresney.  Along with barring Cooperman from any positions as a director or officer in the future, the SEC is seeking restitution of profits as well as money penalties from Cooperman and his firm, Omega Advisors.

However, Cooperman’s attorneys, Ted Wells and Dan Kramer have released a statement claiming that these allegations are “entirely baseless” and that “Mr. Cooperman acted appropriately at all times and did nothing wrong. We intend to vigorously defend against the charges and will not allow the SEC to tarnish the legacy Mr. Cooperman has built over the course of a legendary career spanning five decades.”  Cooperman is firing back and defending his career and reputation, to which the SEC is saying that they “will continue to pursue relentlessly those who engage in insider trading, regardless of their status or resources.”  This comes as a lesson that no matter who you are or how much power you have on Wall Street, you are still not exempt from following the law.

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

Posted by Ivanna Klics.

There has been quite a ruckus at Wells Fargo as they made headlines for causing fraudulent transactions that have not been authorized by the customers themselves. Wells Fargo is being accused for creating banking and credit card accounts without the permission of its customers. Who are the customers more to blame then the CEO, John Stumpf; however, in his defense, he is not capable of overlooking every branch in the bank. Stumpf’s leaders have not only stepped out of their comfort in the company but the reputation of the company, as well as opening up the door to a criminal investigation case.

The investigation has put the company to shame. Stumpf appears to be clueless of what has been going on literally right under his nose. Because it is almost impossible for these events to occur overnight, management should have known about it for a long time. Whether Stumpf admits it or not, Charles Gasparino stated “he and the bank will still face numerous civil and criminal inquiries for years to come.”

Although the company does not mean all harm, Wells Fargo is still one of the most profitable banks worldwide; however the company’s perception has had a dramatic change. Currently the company is facing a congressional investigation, and who knows if they will be able to build back their reputation.

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

Posted by Ola Mohammed Alghasham.

The world encounters cases where frauds are committed by white collar criminals. Executives whom fight against fraud are beneficial for the company. Although the board and management make strong efforts in composing fraud preventing policies, there are several behavioral, environmental, and fraud assessment elements which are ignored during the composition of such policies and their absence provides shelter to the fraudsters. White collar criminals often attain confidence from their role in the organization. This confidence gets transformed into arrogance which prohibits the criminal from applying organizational policies and rules on himself, as an employee of the company.

There is no doubt that the top management always looks for the creative and clever individuals as employees. They forget, however, this creativity and cleverness can be used against the company instead of in its favor. Employees with these traits can cunningly commit frauds by practicing unnoticeable unethical behavior. Companies should execute proper controls with the recruitment of talented people. The tone of top management can either promote or discourage the ethical behavior because it is supposed to set an example for the rest of the organization. The whistle-blowing attitude is shaped by the organizational culture. Moreover, an illogical increase in pay, without any improvement in the performance, allows the fraudsters to continue their unethical activities.

Board members and executives should identify the fraud tactics and fraud hidden strategies of these individuals to compose a fool-proof risk assessment process. Major warnings can appear from the financial data (e.g. unusual, frequent or large transactions), documents with missing or incomplete information or suspicious signatures, poor controls (e.g. lack of monitoring, poor reconciliation of accounts, lack of position to manage conflicts of interest), behavior (e.g. unstable behaviors, mismatched lifestyle with income, high expectations family, and job dissatisfaction). Management must implement strong controls in the day-to-day business operations to avoid fraudulent activities. The board must adopt a proactive behavior in the elimination or early detection of fraud by establishing an audit committee with full authority, monitoring transactions, promoting and maintaining an ethical environment, and composing a procedure for the reporting of fraudulent activities. The board must compose and enforce certain strategies to cope up with the frauds. The executives must develop an ethical environment for keeping the employees loyal with the company and directing the human talent towards the betterment of the company.

Ola is an graduate accounting major with a certification in forensic accounting at the Feliciano School of Business, Montclair State University.

Source:

Marks, J., (2012), A Matter of Ethics: Understanding the Mind of a White-Collar Criminal, Financial Executive, pp. 31-34. Retrieved from www.financial executives.org.

Posted by Dylan Beland.

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

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

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

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

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