Posted by Courtney McCardle.

Johnny Depp, a very famous and popular actor filed a lawsuit in the beginning of 2017, as he believed the issue is costing one of his homes. He filed a lawsuit against his own business managers for more than $25 million in a jury- seeking suit. Depp is alleging fraud in breach of contract and professional negligence. The complaint also alleged that the management firm was attempting to foreclose on Depp’s primary home through a loan that was claimed to be from the management company. “In essence, TMG treated Mr. Depp’s income as their own, available to either TMG or third parties to draw upon as desired.”

Depp’s first step was to ask for a restraining order to stop the process of foreclosing the home. When the attorney for TMG was notified of this issue, he sent out a statement saying “For 30 years, Joel and Rob Mandel, and their company The Management Group, have been trusted business managers to some of the most successful individuals and companies in the entertainment business. For 17 of those years, they did everything possible to protect Depp from his irresponsible and profligate spending.” He also said Depp faced financial ruin in December 2012 with a $5 million bank loan. The Mandels loaned him the $5 million and Depp promised to repay by January 2014. By October 2016, Depp allegedly owed $4.2 million and as a result, the Mandels non-judicial foreclosing on some of Depp’s properties.

This lawsuit is an attempt to ruin the foreclosure by changing the actions of his managers. He ended up keeping all of his real estate holdings and was forced to pay back the loan to the Mandels.

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

Source:

http://people.com/movies/johnny-depp-fraud-lawsuit/

Posted by Noah Stanton.

On the 16th of October, the Supreme Court has made the decision to proceed on the dispute between government authorities and technology companies like Microsoft, who are being forced to give emails and other digital information “sought in criminal probes but stored outside the U.S.” According to the article, justices intervened in a case of federal drug trafficking investigation where they needed emails that Microsoft had on its servers but were beyond the search warrant being that the servers are in Ireland. The Supreme Court decision is impeding investigations, according to the Trump Administration and 33 states. Cases regarding terrorism, drug trafficking, fraud and child pornography are all being delayed because courts are waiting on the ruling regarding obtaining information that is kept abroad.

This case is among many that tech companies like Microsoft about digital privacy that might relate to crime and extremism. This Supreme Court case is an example of finding the balance between older laws and recent technological developments. Microsoft is saying, “Congress needs to bring the law into the age of cloud computing” where most information is not held in the jurisdiction of current law. Back in 2013, a warrant issued to obtain emails pertaining information about illegal drug transactions. Microsoft cooperated but went to court at the time because the emails held at servers overseas were not handed over.

A Justice Department lawyer stated Microsoft can retrieve emails stored domestically or not with a single click of a button. The simplicity of the action does not change the boundaries the warrant has though. All of these troubles relate back to the 1986 Stored Communications Act, which has minimal use when information is held overseas. The article states, “The current laws were written for the era of the floppy disk, not the world of the cloud.”

The president of Microsoft said Congress needs to act by passing new legislation. This would help put an end to the numerous legal actions that take place about officials trying to obtain private information from U.S. based tech companies because they keep servers around the world. The court is expected to confront the issue of emails from an American citizen or foreigner and where they reside. The Supreme Court Case will take place early next year.

Noah is a business administration major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Alexandra Prostamo.

On October 16, the Supreme Court agreed to consider Microsoft’s dispute over the government’s authority to be able to access emails and digital information sought in criminal investigations, but stored outside of the United States. According to the Trump administration and 33 states, the court’s decision is impeding investigations into terrorism, drug trafficking, fraud and child pornography just because the email information is stored in servers in Ireland. This is why they urged the court to take the case, U.S. v. Microsoft.

They believe the decision has implications not only for Microsoft, but also for other technology giants like Google and Yahoo, stating that “a private company has unfettered discretion to shield evidence of crime from law enforcement, simply by electronically sending that evidence out of jurisdiction.”  The issue rises from the fact that data companies have built servers around the world to keep up with customers’ demands for speed and access. This is why the court needs to confront whether the same rules can be applied to the emails of both an American citizen and a foreigner.

What Microsoft is trying to battle is the Stored Communications Act of 1986, which allowed a U.S. law enforcement agency to obtain stored e-mails with a warrant from a U.S. provider if those e-mails are stored abroad. Microsoft president and chief legal officer Brad Smith stated that “the current laws were written for the era of the floppy disk, not the world of the cloud”. Microsoft deeply advocates for the fact that Congress should pass a new legislation, however the result of the dispute could have significant global business and privacy implications.

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

Sources:

https://www.washingtonpost.com/politics/courts_law/supreme-court-to-consider-major-digital-privacy-case-on-microsoft-email-storage/2017/10/16/b1e74936-b278-11e7-be94-fabb0f1e9ffb_story.html?utm_term=.4863bf16975d

http://news.findlaw.com/apnews/fb9b07a2c14940b0977cb35ff01166ff

Posted by Michelle Belvin.

Microsoft Corp. v. United States is a ruling by the United States Court of Appeals for the Second Circuit that a warrant issued under the Stored Communications Act (SCA) cannot compel American companies to produce information stored in servers outside the United States.

The warrant issued directed Microsoft to seize and produce the contents of an e‐mail account, which was believed to be used in the development of narcotics trafficking. Microsoft did deliver the customer’s non‐content information to the government as was asked, and that data was stored in the United States. However, in order for Microsoft to fully comply with the warrant, it would have to obtain customer content that is located in Ireland and then transport it into the United States. “Believing the data in Ireland to be beyond the jurisdiction of the warrant, Microsoft moved to quash the warrant.” The court concluded that Congress did not intend the SCA’s warrant provisions to apply extraterritorially. The Second Circuit “held that the government cannot compel Internet Service Providers (ISPs) to turn over data stored overseas, even with a warrant.”

The SCA also does not authorize a U.S. court to issue and enforce a SCA warrant against a U.S. based service provider for the contents of a customer’s electronic communications stored on servers located outside the United States. Therefore, the court concluded that the district court lacked authority to enforce the warrant against Microsoft.

Michelle is a business management major at the Stillman School of Business, Seton Hall University, Class of 2020.

Sources:

http://harvardlawreview.org/2016/12/microsoft-corp-v-united-states/

https://www.justice.gov/opa/blog-entry/file/937006/download

Posted by Ysabel Capitan.

The optimal way to study business law is to see how it is applied in the real world by seeing the myriad of legal battles under the field.  Of course, in a naturally competitive world of corporate entities, lawsuits are common defense mechanism and tactic for upholding the success and integrity of a business.  Perhaps the quintessential legal battle in business law in the technology industry can hail from the lawsuit that Apple had set out against Microsoft in 1988. Technology and business savants in Bill Gates and Steve Jobs would see their lives changed forever with this lawsuit after the latter accused the former of stealing their intellectual property.

Apple sued Microsoft in a copyright dispute for stealing their graphic user interface in their computing devices. The way a user runs a computer today is because of Steve Jobs’ and Apple’s foray into operating systems.  The symbols on the monitor, the mouse icon, the application list, it is because of Apple’s popularization of their operating system.  Bill Gates then made a similar system that we all know as Windows for Microsoft computers by using his own set of icons.  For example, instead of calling them “applications” on a Macintosh computer, Bill Gates called it a “program” to differentiate it just enough on Windows.  Apple, who was infuriated over their work being plagiarized, decided to take matters into court with a lawsuit. According to the New York Times in 1988, “Hoping to protect a key selling point of its Macintosh, Apple Computer Inc. filed a copyright-infringement suit against the Microsoft Corporation and the Hewlett-Packard Company.  Apple said software programs sold by the two companies infringed on copyrights Apple held for the way information is presented and controlled on Macintosh screens.“

Apple argued that while Microsoft did change things slightly, the overall premise was the same thing as copying. Microsoft cleverly argued that they would have to copy them entirely in order for this to be a copyright dispute. According to the Seattle Times, “Apple felt the question was too narrow. Attorney Edward Stead argued that a ‘substantial similarity’ standard taking into account small differences but considering overall resemblance – ‘look and feel’- should be applied. “We think it is important that innovative graphical computer works receive the protection to which they are entitled under the copyright law,” Stead said. But Microsoft attorney Bill Neukom countered, “In order to have a copyright infringement, you have to copy. And we didn’t copy.”

Microsoft did just enough to win the lawsuit and shows how tricky copyright law and the entire field of intellectual property is.  Because this was done in a time where computing was a brand new aspect, the courts believed that Microsoft changed enough in order for them to win the lawsuit. It would be interesting to see how a court ruling would have been done today in a time where technology has so clearly advanced to the public. Regardless, this court cases shows the inherent subjectivity of copyright law and how the entire field is truly in a gray area — and not in black or white.

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

Posted by Christopher Saker.

NASI raised more than $120 million from roughly 2,000 investors with the promise of guaranteed returns of 20% for each automated teller machine (ATM) an investor purportedly purchased and leased back to the company. 

Each investor signed a contract memorializing their investment which included the serial number and location of each ATM but also prohibited the investor from “interfering” with the ATM’s operation by contacting any location where the ATM was installed or any ATM service provider.  A bank account analysis showed that NASI raised more than $120 million from January 2013 to August 2014 alone.  After NASI began bouncing checks to investors in August 2014, the Securities and Exchange Commission brought an emergency enforcement action and obtained the appointment of William Hoffman as Receiver.  Gillis and Wishner were later arrested and sent  to prison terms of ten and nine years.

In addition to the promised returns, NASI also paid a referral fee of $500 to $1,000 to each investor or non-investor who referred investors to the scheme.  The district court granted the receiver’s request to pursue claims against various third parties including those who received referral fees.  The receiver filed suit against Howard Markowitz and alleged that Markowitz received nearly $750,000 in referral fees from NASI.  The district court  gave a  partial summary judgment in the receiver’s favor in August 2017 and allowed the recovery of all referral fees paid to Markowitz, and that decision was later appealed.  

When the appeal happened, the Ninth Circuit noted that the California Uniform Voidable Transactions Act (CUVTA) made payments from a Ponzi scheme to a third party voidable when made with either actual or constructive intent unless the transferee could show that they received the transfer in good faith and that they provided reasonably equivalent value for the transfer.  Here, the receiver alleged that the referral fees were voidable under CUVTA because Moskowitz’s referral services provided no value to NASI investors and instead only served to further deepen the scheme’s insolvency through the increase in underlying liabilities. Other courts around the country have split on this issue, but the receiver urged the Ninth Circuit to follow the decision reached by the U.S. Court of Appeals for the Fifth Circuit which held that referral services for a Ponzi scheme did not provide any value to the scheme.  

The Ninth Circuit declined to adopt a brightline rule holding that referrals to a Ponzi scheme are “per se voidable because they never provide value,” but did observe that Markowitz conceded that the only service he provided in return for the referral fees was the referral of new investors to the scheme. Based on these facts and the reasoning in Warfield, the Court sided with the receiver and affirmed the district court’s finding that Markowitz was required to disgorge nearly $750,000 in referral fees to the receiver.  While the decision was not published and cannot serve as binding precedent, it is yet another tool available to receivers seeking to maximize recovery for defrauded victims.

Christopher is a finance major at the Stillman School of Business, Seton Hall University, Class of 2022.

Posted by Aiai Shen.With the development of globalization, people’s income level is increasing day-by-day. Travel has become one of the main forms of entertainment for people. At the same time, tourism has brought about significant revenue growth for most countries. With the continuous expansion of tourism, the relevant laws and policies are also constantly revised and improved.

According to KYODO’s article “Japan begins collecting $1,000 departure tax fund to inbound tourism promotion plan”, Japan started collecting a departure tax of 1, 000 yen from each traveler leaving the country (regardless of nationality) on 7th January. “The new tax applies to both air and sea travel and will be tacked onto transportation fares of passengers.” The policy also states that children under the age of two, transit passengers leaving Japan within 24 hours of arrival and those who leave the country because of bad weather or other unavoidable reasons will be exempted.

“Japan has enjoyed a surge in the annual number of inbound tourists in recent years,” and the departure tax is expected to generate 50 billion yen in revenue in 2019 according to the Japan Tourism Agency. The Japanese government said the tax revenue will be mainly used for providing “smoother travel services, facilitating access to information about the country ‘s tourist attractions and improving visitor satisfaction levels by promoting tourism resources in regional.” It is also aimed at attracting more foreign visitors in the run-up to and beyond the 2020 Tokyo Olympics and Paralympics.

However, there are still some people who question the policy and think that the rising price of tourism is a burden to tourists. Hideaki Tanaka, a finance professor at Meiji University’s Graduate School of Governance Studies, said, “It will be necessary to check that the funds are not being used on less productive measures, but in ways that taxpayers find convincing”.

In my opinion, the departure tax is not the most critical issue. Whether the 1,000-yen tax becomes a burden for tourists depends entirely on themselves. But I don’t think it will. Because 1,000 yen is not a lot for those who can afford to travel internationally. The public (taxpayers) should pay more attention to whether the tax is used to benefit Japanese citizens and foreign tourists. In other words, its effects need to be presented in a more obvious way to truly convince taxpayers.

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

https://www.japantimes.co.jp/news/2019/01/07/national/japan-begins-collecting-%C2%A51000-departure-tax-fund-inbound-tourism-promotion-plan/#.XETm1VxKg2w

Posted by Brianna McCoy. 

In the very end of August of this year, 2018, a court ruling involving the FCPA could potentially limit the government’s power to go after foreign companies and individuals in bribery cases. This type of court situation is dealt within the U.S. appeals court. The appeals court supported a ruling that tightens and limits the jurisdiction under which prosecutors can bring foreign bribery charges. Attorneys involved in this ruling recognize that “affirming a lower-court ruling that dismissed conspiracy charges against a foreign national accused of facilitating a bribery scheme could have a significant effect on future enforcement,” (WSJ Samuel Rubenfeld). This statement demonstrates the limits of the Foreign Corrupt Practices Act (FCPA). The FCPA was passed in 1977, with the primary purpose to prohibit the payment of bribes, in any form, to foreign officials in order to secure or retain business. It is interesting how this act is for business purposes by American individuals, companies, and issuers of American stock, yet if a foreigner is involved in a corruption scheme while in the U.S. they are also subject to the law.

However, now that there is a narrower view of this statute, the Justice Department is going to see a drawback on their ability to go after foreign companies and foreign individuals. You may wonder where this idea is coming from… This appellate decision is focused “on an individual’s challenge in the foreign-bribery case involving Alstom SA. The French transportation manufacturer agreed in December 2014 to pay $772 million to settle the case, which involved allegations in several countries,” (WSJ Samuel Rubenfeld). Several other people have been charged, one being Lawrence Hoskins, a U.K. national. Hoskins was probed because while he was working for a French unit of Alston, it was alleged that he approved payments to third-party consultants related to a bribery scheme in Indonesia. Luckily for Hoskins, he wasn’t subject to the FCPA because he “didn’t work directly for the U.S.-based unit of Alstom and didn’t participate in the bribery conspiracy while physically in the U.S.” However, the appellate court revised this lower court ruling because prosecutors can argue that Hoskins colluded with the Alstom’s employees while they conducted bribery acts in the U.S., even though Hoskins wasn’t physically in the U.S.

Now, the Justice Department is “reviewing the ruling and considering next steps.” By doing this, questions may come up about whether the U.S. has jurisdiction in an FCPA case earlier in an investigation. In the past, it has been uncommon for an individual to challenge the U.S. government’s affirmation in jurisdiction in an FCPA case, but the appellate decision could provoke more attempts to do so. Because in the past these FCPA settlements have relied on conspiracy theories, now prosecutors will turn toward developing evidence regarding conduct in the U.S. by foreign nationals to bring its FCPA cases. In addition to this, the government may continue its tendency of using money-laundering statue where necessary.

Brianna is a management major at the Stillman School of Business, Seton Hall University, Class of 2021.

Posted by Dan Mikrut.

Who knew that typing 280 characters could turn into a $40 Million dollar law suit. This is the cold reality in the case of the SEC vs. Elon Musk. On September 27, 2018 the SEC filed securities fraud charges against Elon Musk, the chairman and CEO of Tesla Motors. On August 7, 2018 Mr. Musk stated in a Twitter post “Am considering taking Tesla private at $420. Funding secured.” According to the SEC, his statement mislead the investing public that he could take the company back at a substantial premium during the current price of the company stock. The information was noted as misleading and false because they lacked any basis in fact. During the time of the tweet Musk had not received or secured funding for the proposed transaction. The stock price of Tesla ended up sky rocketing to $379.57 an increase in $37.58 a share within 24 hours of the tweet going public to Musk’s 22 million twitter followers.

Musk’s questionable actions lead to some serious consequences. The SEC and Musk had settled the case on September 29, 2018. Musk had to abide by 4 main points.

1. Musk must give up being Chairman for 3 years, but will retain a seat on Tesla’s board 2. Two new independent directors must be put on the Tesla Board 3. Musk & Tesla must pay $20 million each in fines

4. Musk must have a an oversight personnel on all his communications and social media accounts

On the personal note, I believe that the SEC went harsh on Musk and the whole ordeal is little obscured. While yes, I do believe Musk made a mistake and posted false information; he was quick to make sure it was known that his tweet was a joke for his wife referencing a 420 joke. This case is another perfect example of the American legal system taking advantage of American businesses and their profits over small legal incidents. I believe that the overpriced fine should’ve only been given to Musk and not the company, because Musk was the only person responsible for the tweet and not the company. As if the fine wasn’t bad enough, the SEC striped Musk of his position and responsibility in his own company that he helped cofound. While the oversight personnel on Musk’s accounts sounds like a good idea, it does also sound a little invasive and going against Musk’s freedom of speech. All in all, I don’t agree with the final verdict in this case because it was too aggressive over a small mistake that Elon Musk made, and shows how the justice system is a costly system that is failing America.

Dan is an IT management major in the Stillman School of Business, Seton Hall University, Class of 2021.

Works Cited:

CBS/AP. “5 Things to Know about the SEC’s Complaint against Elon Musk.” CBS News, CBS Interactive, 28 Sept. 2018, www.cbsnews.com/news/5-things-to-know-about-the-secs-complaint-against-elon-musk/.

Henning, Peter J. “What Are the Consequences of Elon Musk’s S.E.C. Criticism?” The New York Times, The New York Times, 12 Oct. 2018, www.nytimes.com/2018/10/12/business/dealbook/musk-tesla-twitter.html

Posted by Frank J. Frasco.

For decades upon decades, the debate of women in the workforce had been a strong debate, a once disregarded topic that was controlled and ignored by the patriarchal society that was once America before the 19th amendment. However, with more and more women having full-time, career jobs, there has been a continued struggle for women to be allowed in higher, more official standings within a company no matter the qualifications, which may be equal to or even higher than that of their male competitor.

Well, the state of California has seen enough. Recently, on September 30th, Governor Jerry Brown signed a law that puts the Golden State as the first state to require publicly traded companies to have at least one woman on their board of directors, states NPR reporter Laurel Wamsley. The companies whose official executive headquarters are located in California will need to conform to this demand by the end of next year or face fines of $100,000. Which companies will these effect? The question really should be, which companies won’t these effect? According to last year’s Fortune 500 list, 53 out of the 500 very successful corporations are within the west coast state, which includes powerhouses such as Apple, Alphabet (Google), Disney, HP, Gap, Visa, EBay, just to name a few. According to Wamsley, within the law companies will have a minimum of two female directors if it has five directors on its board, or three women if it has seven directors by the close of 2021. Will these numbers increase if a company has more than seven on an executive profile? Take technology juggernaut Apple for example. Their leadership of eleven members only has two women on the board. So, should Apple be forced to add at least two additional female members to create more equality within an industry that typically comes across as masculine? It will be interesting to see.

State senators Hannah Beth-Jackson and Toni Atkins had enough with unfair, unethical business treatment and were the key sponsors of the bill. And they have facts to justify their frustrations, as television station KQED reports that a quarter of the 445 publicly traded companies in the politically progressive state don’t have a single woman on their boards. The dichotomy is near shocking. Of course, there was backlash, as California’s Chamber of Commerce as well as over twenty-five business groups opposed the bill in their letter to the senate pleading it was “unconstitutional”. However, it was the frightening, plain, old facts again that helped Senators Beth-Jackson and Atkins win their argument. One of them, the fact that only five percent of the companies that are traded on the Standard & Poor’s 500 have female CEOs, brought hesitation to the adversaries.

It is safe to say that this has been a hot topic in recent news outlets, ranging from political shows to obvious business channels such as CNBC. However, what this law, signed by Governor Brown less than a month ago, provides is hope. Hope for women in conservative states such as Mississippi and North Dakota to understand that progress in the workforce is truly happening, and that the 19th amendment will not be the last major amendment to benefit women’s lives.

Frank is a visual and sound media major with a minor in film, business administration minor, at the Stillman School of Business, Seton Hall University, Class of 2019.

Article:

https://www.npr.org/2018/10/01/653318005/california-becomes-1st-state-to-require-women-on-corporate-boards

Posted by Jasmine Lightburn.

In this law suit, a content moderator is suing Facebook for causing her post traumatic stress disorder (PTSD). Content moderators are responsible for sifting through often criminal and disturbing posts that users all over the world upload and removing them from the web before the general public sees. She claims that the violent images and other brutal content she viewed caused immense trauma and led to this disorder. The former moderator, Selena Scola, viewed the harshest material ok the web. This included rape, suicides, and other killings every day and claims that she was not protected fairly. According to Scola, the correct psychological services were not in place.

In order to protect other content moderators, Scola urges Facebook to implement effective psychological support services to ensure that employees are receiving the necessary help. She also wants to incorporate mandatory medical testing on a regular basis to further guarantee on site medical attention. She believes that this will reduce the amount of workers who suffer from extreme disorders like herself and other issues that do not get reported or addressed.

In my opinion, Facebook should offer Scola a package deal to cover any medical costs associated with her diagnosis of PTSD. I do not think the company should have to pay any other money other than those costs related to her individual psychological appointments. Moving forward, I agree that Facebook should take deeper measures to monitor the content moderators. In the job description, the company should also include possible health effects that may result from the work that needs to be done. I don’t believe all of the blame can solely be put on Facebook, but they should be responsible for some of what happened.

Jasmine is a business management major with a non-profit minor at the Stillman School of Business, Seton Hall University, Class of 2020.

Article:

Posted by Surya Makkar.

Over the past few years, Tesla has emerged as a frontrunner when it comes to electric vehicle technology. Their technology packed, self-driving, vehicles have come with their fair share of problems however. Not only has Tesla faced legal obstacles when it comes to their various technologies they use in their products, but more recently, Tesla CEO Elon Musk was sued by the Securities and Exchange Commission (SEC). Elon Musk was accused of committing fraud by publically making false statements, which could have impacted investors. To give some background, around a month ago, Elon Musk tweeted saying that he had “funding secured” to take Tesla private at $420. Something interesting to note is that the SEC did not sue Tesla as a whole, but rather only filed a suit against Elon Musk.

Elon Musk had never said anything before this to investors or shareholders about taking the company private, which is why everyone was caught off guard and was extremely shocked. After the suit was filed, Tesla shares fell more than 12 percent in after-hours trading. The SEC subpoenaed Tesla, financial institutions, and Tesla board members, to interview them and gather more information. The SEC found that Musk had been in a feud with investors who continued to say Tesla shares would fall.
A few days later, Musk and the SEC reached an agreement that required Elon to step down as Chairman of the board of Tesla and required him to pay a $20 million fine. According to the agreement, Musk does not have to admit any guilt and has 45 days to step down from the role of chairman. He will continue to serve as the CEO of Tesla however. This case goes to show how business professionals are being watched at every moment. One wrong move in the business world can lead to millions of dollars of legal action being taken against you, which is why it is imperative that people in the business world act as if they are being watched at all times.

Surya is a business law student at the Stillman School of Business, Seton Hall University, Class of 2021.

Sources:
https://www.nytimes.com/2018/09/27/business/elon-musk-sec-lawsuit-tesla.html

Elon Musk settles SEC lawsuit, forced out as Tesla’s chairman but stays as CEO, $20 million fine and more

Posted by Marisol Ramirez Ugarte.

In the recent years there has been an upheaval in the legal profession. Legal services, more than ever, are being required by the population. In the rise of employment for attorneys comes the need to manage legal firms in a manner which exploits the large increase in demand.

In fact, speculation on whether legal firms should adopt the structure of corporations has become prominent. According to Frank Carone, executive partner at Abrams Fensterman, “Law firms that are able to consistently bring in high-quality business and ensure that a sizable portion of the revenues go to the bottom line are the ones that will seriously excel” (Prince). He concedes that while the best interests should remain on the clients, the firm should pay attention to growth through the introduction of new legal matters, as well as a focus on profitability. A firm would do well to systematically reach out to potential clients, and referral sources through business development activities. Firms would be able to benefit their client as much as possible, which would in turn provide the greatest profitability for the firm.

Provided that a firm’s management decides to manage the firm like a business, they must consider a key element. The ability to develop and use metrics. The firm’s management would need to clearly identify which areas of law were most profitable, as well as which lawyers participated in the largest monetary gains. Inversely, those areas and attorneys seen as underperforming would need to be identified. In concert with the law firm’s strategic vision, metrics could aid the firm to reach the highest profits through the pursuit of a business model.

Given the success of those firms who have already chosen this path, many others should soon follow suit. I suspect that upon realizing they can continue to serve their clientele to their greatest potential leaders in management will rise to the task with vigor. I find most curious that most firms do not view themselves are businesses; in providing services, albeit legal ones, they are participating in a commercial transaction. Thus, I believe it only natural for the firms to manage as businesses for the benefit of its customers, and the sake of the legal firm.

Marisol majors in finance and philosophy at the Stillman School of Business, Seton Hall University, Class of 2020.

Sources:

https://www.forbes.com/sites/russalanprince/2018/01/29/how-to-dramatically-increase-law-firm-profitability-by-running-the-firm-as-a-business/#5fc6a2d2bd61

Posted by Aishwarya Rai.

Tesla, the Palo Alto-based automative and energy company, has been subject to much staggering lately, due to the conduct of its ex-Chairman and CEO, Elon Musk. Musk and Tesla have been subject to inquiries by the Department of Justice (DOJ) and Securities and Exchange Committee (SEC), as a result of Musk’s conduct; Musk tweeted about taking the company private, stating that funding had already been secured and shares would be priced at $420. Additionally, Musk made reference to those betting on shorting Tesla stocks by mentioning them and the “burn of the century.” Further details showed that Musk had no such funding secured, all whilst Tesla stocks zoomed upwards and short-sellers did in fact face losses.

This led to the DOJ and SEC to inquire into Tesla’s conduct as the tweets seemed to show that Musk misled the market to believe that Tesla would undergo privatization and thus gain some greater market value. When it was revealed that Tesla did not have the required amount of capital to go private, the SEC deemed that Musk’s actions were done to increase stock value and to financially harm short-sellers, making it an act of bad faith.

Furthermore, Musk’s actions showed a lack of ethical consideration as he seemed hostile towards short-sellers. Musk has a responsibility to shareholders as a CEO and the accuracy and truthfulness in the information he disseminates falls under this stipulation. Other acts that put his ethics in question were smoking on a podcast with Joe Rogan, which may go against Tesla’s codes of conduct as it can be said that he was acting as the CEO of the company while on camera.

These incidents put into perspective the need for important business officials to be mindful of the ripple effects of their actions on their fellow employees, clients, and shareholders. The effects of bad conduct, whether intentional or not, can be harmful and put companies at risk of failure. Accurate information is what creates a safe market, legally and financially.

Aishwarya is an economics and finance major at the Stillman School of Business, Seton Hall University,
Class of 2020.

Article:

https://www.cnbc.com/2018/09/27/tesla-falls-4percent-on-report-elon-musk-sued-by-sec.html

Posted by Surya Makkar.

Over the past few years, Tesla has emerged as a frontrunner when it comes to electric vehicle technology. Their technology packed, self-driving, vehicles have come with their fair share of problems however. Not only has Tesla faced legal obstacles when it comes to their various technologies they use in their products, but more recently, Tesla CEO Elon Musk was sued by the Securities and Exchange Commission (SEC). Elon Musk was accused of committing fraud by publically making false statements, which could have impacted investors. To give some background, around a month ago, Elon Musk tweeted saying that he had “funding secured” to take Tesla private at $420. Something interesting to note is that the SEC did not sue Tesla as a whole, but rather only filed a suit against Elon Musk.

Elon Musk had never said anything before this to investors or shareholders about taking the company private, which is why everyone was caught off guard and was extremely shocked. After the suit was filed, Tesla shares fell more than 12 percent in after-hours trading. The SEC subpoenaed Tesla, financial institutions, and Tesla board members, to interview them and gather more information. The SEC found that Musk had been in a feud with investors who continued to say Tesla shares would fall.
A few days later, Musk and the SEC reached an agreement that required Elon to step down as Chairman of the board of Tesla and required him to pay a $20 million fine. According to the agreement, Musk does not have to admit any guilt and has 45 days to step down from the role of chairman. He will continue to serve as the CEO of Tesla however. This case goes to show how business professionals are being watched at every moment. One wrong move in the business world can lead to millions of dollars of legal action being taken against you, which is why it is imperative that people in the business world act as if they are being watched at all times.

Surya is a business law student at the Stillman School of Business, Seton Hall University, Class of 2021.

Sources:
https://www.nytimes.com/2018/09/27/business/elon-musk-sec-lawsuit-tesla.html

Elon Musk settles SEC lawsuit, forced out as Tesla’s chairman but stays as CEO, $20 million fine and more

Posted by Marisol Ramirez Ugarte.

In the recent years there has been an upheaval in the legal profession. Legal services, more than ever, are being required by the population. In the rise of employment for attorneys comes the need to manage legal firms in a manner which exploits the large increase in demand.

In fact, speculation on whether legal firms should adopt the structure of corporations has become prominent. According to Frank Carone, executive partner at Abrams Fensterman, “Law firms that are able to consistently bring in high-quality business and ensure that a sizable portion of the revenues go to the bottom line are the ones that will seriously excel” (Prince). He concedes that while the best interests should remain on the clients, the firm should pay attention to growth through the introduction of new legal matters, as well as a focus on profitability. A firm would do well to systematically reach out to potential clients, and referral sources through business development activities. Firms would be able to benefit their client as much as possible, which would in turn provide the greatest profitability for the firm.

Provided that a firm’s management decides to manage the firm like a business, they must consider a key element. The ability to develop and use metrics. The firm’s management would need to clearly identify which areas of law were most profitable, as well as which lawyers participated in the largest monetary gains. Inversely, those areas and attorneys seen as underperforming would need to be identified. In concert with the law firm’s strategic vision, metrics could aid the firm to reach the highest profits through the pursuit of a business model.

Given the success of those firms who have already chosen this path, many others should soon follow suit. I suspect that upon realizing they can continue to serve their clientele to their greatest potential leaders in management will rise to the task with vigor. I find most curious that most firms do not view themselves are businesses; in providing services, albeit legal ones, they are participating in a commercial transaction. Thus, I believe it only natural for the firms to manage as businesses for the benefit of its customers, and the sake of the legal firm.

Marisol majors in finance and philosophy at the Stillman School of Business, Seton Hall University, Class of 2020.

Sources:

https://www.forbes.com/sites/russalanprince/2018/01/29/how-to-dramatically-increase-law-firm-profitability-by-running-the-firm-as-a-business/#5fc6a2d2bd61

Posted by Leigh Ann Rofrano.

In 2003, a class action lawsuit was filed against Ticketmaster, entitled Schlesinger v. Ticketmaster. The lawsuit claimed that Ticketmaster “failed to fully disclose to consumers all aspects of its UPS and order processing fees” (Ticketmaster). Ticketmaster settled the case in 2013, but the courts did not grant the final approval of the settlement until early 2015. The settlement includes all customers who purchased tickets on Ticketmaster’s website between October 21st, 1999 and February 27th, 2013.

As a part of the settlement, all class members were eligible to receive discount codes or ticket vouchers. Each class member was given a discount code worth $2.25 for every purchase they made during the class period. Class members who used UPS delivery during the class period were provided with a $5 UPS discount code for each purchase that included UPS delivery. Additionally, each class member was given one ticket voucher (which was redeemable for two tickets for an event at a Live Nation venue) for every purchase made during the class period on Ticketmaster’s website.

I choose to research and discuss this case because it is extremely relevant in my life. I am a frequent Ticketmaster and Live Nation customer, as I attend many events every year. The lawsuit was filed against Ticketmaster due to its ridiculously high order processing fees that are tacked onto every ticket. As a Ticketmaster customer, I agree and can attest to the fact that when browsing tickets for events, the magnitude of the order processing fees in not clearly outlined; it is not until you are in the checkout process that you are fully aware of the fees. I was notified through email this past summer about this lawsuit and the discount codes and vouchers in which I was entitled. Many customers were quick to complain that Ticketmaster acted unjustly in notifying customers about the settlement and the class members’ potential benefits. I agree with this argument on the basis that I too was notified of my voucher and discount codes after all of the eligible tickets had been already claimed. I feel Ticketmaster should have notified customers of their vouchers and discount codes sooner, in an attempt to give all class members a fair chance at receiving free event tickets from their vouchers. Overall, I do appreciate the small compensation that was provided to me from the lawsuit, since it is extremely rare to receive discounts on Ticketmaster.com, but would have liked to have been notified earlier and provided with more details about the settlement sooner.

Leigh Ann is a marketing and management major at the Stillman School of Business, Seton Hall University, Class of 2021.

Article Links:

https://insider.ticketmaster.com/frequently-asked-questions-schlesinger-v-ticketmaster/?_ga=2.76895829.1994249424.1539478038-1512211698.1510348971

http://www.ticketfeelitigation.com/

Posted by Thomas DeFrancesco.

South Dakota has a state tax for sales of goods and services that are made by retailers of the state. Out-of-state retailers were making sales to customers in the state of South Dakota and not collecting and remitting sales tax in South Dakota. However, these retailers are allowed to do that based on the ruling made in Quill Corp. v. North Dakota, 504 U.S. 298 and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753. The state was worried they were losing funding due to out-of-state retailers not collecting and remitting the South Dakota’s sales tax. To solve this concern, South Dakota created a law that commanded out-of-state retailers who make more than 200 sales transactions and at least $100,000 in revenue from those sales to collect and remit sales tax as if they were located in South Dakota. Companies who met those requirements failed to follow the newly made law so the South Dakota legislature brought the issue to court.

Should the respondents have to register for licenses to collect and remit the sales tax regardless if they are physically present in the state or not?

South Dakota law is permitted to tax sales from sellers who are outside of that particular state as long as the seller collects at least $100,000 in sales revenue or more than 200 sales transactions.

The court derived its reasoning from other cases including Quill v. North Dakota and National Bella Hess v. Department of Revenue of Ill. The court explained how the physical presence rule in Quill v. North Dakota is “unsound and incorrect.” Since the internet has such a great impact on business, retailers who do business through the internet must pay taxes in that particular state of the sale. Therefore, the Quill v. North Dakota reasoning is no longer relevant.

Thomas is a finance major at the Stillman School of Business, Seton Hall University, Class of 2021.

Source:

https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

Posted by Samantha Staudt.

One in five Americans have reported that they have skipped medicine doses or failed to fill a prescription each year because of the cost of the medicine.  This statistic is outrageous and states have to start doing something about it because the federal government will not.  Certain states, like Nevada, have passed a new law that manufactures must disclose more information about why drug prices are rapidly increasing.  In the past few year, prices in Nevada have increased as much as 325 percent, so this law will help regulate the prices of prescription drugs.  Maryland provides another example of steps that must be taken in an order to regulate drug companies.  The attorney general sued generic drug manufacturers whose prices rose more than fifty percent in a year.  States are partly responsible for the funding of the Medicaid program, spending more than 20 million dollars a year on prescription drugs for public employees and prisoners.

Drug manufacturers have recently pushed opioids while denying and misunderstanding their addictiveness.  This may be enough to cut the political power of the pharmaceutical industry.  This statistic is not settling well with anyone and more than 100 states have filed lawsuits against pharmaceutical companies related to tobacco.  This is in an effort to recover the costs of dealing with the epidemic of addiction and overdoses.  Oklahoma’s attorney general, Nolan Clay, is making strides to fixing this rising issue by refusing to accept donations from drug companies.

Of course, pharmaceutical companies fight the big changes that would affect the company.  The industry has been at the top of the lists for lobbying expenditures and campaign contributions at the same time managing to block reform proposals.  During Nevada’s fight to lower drug prices, drug companies hired more than seventy lobbyist to descend on the bill.  When state drug pricing bills pass, the drug industry challenges them in court.  There have been several lawsuits filed, but none have succeeded yet.  In order to prevent drug companies from overpricing prescription drugs, states must enforce regulation laws immediately.

Samantha is a finance major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Elizabeth Win.

Dollar bills might as well be worth as much as computer paper now. Cryptocurrency has been on the hot seat for the past few months because of its financially growing nature and easy accessibility. Now, as we are starting to see a slow downfall of people investing in Bitcoin; the I.R.S. is starting to detect serious problems with the millennial choice of currency. One of their main concerns is that this cryptocurrency fad has created another giant, financial bubble. If this bubble were to burst, this Bitcoin “bust” could wipe out millions of spectators leading to a huge loss in tax revenue.

A main contender to this potentially huge loss is Bitcoin’s anonymity. For those unaware, Bitcoin’s underlying technology, blockchain, thrives on anonymity. When a person makes a transaction, the transaction only links through an electronic address, making blockchain more attractive to buyers. Now, the I.R.S. has many problems with this missing identification of creative transactions. The anonymity fuels the underground economy, a significant factor in the source of lost tax revenue. Most of the underground economy is conducted through cash transitions; however, what the I.R.S. fears is that cash will slowly transition to cryptocurrencies because of its convenience. An anonymous buyer of bitcoin can easily pay fewer taxes by cheating the cryptocurrency system – also known as major tax evasion. The solution? The government might have to accept the hardships of directly taxing cryptocurrencies and raise tax rates in order to offset the loss of revenue. Understand that the public would highly disagree with this solution, they generated a smarter response: a switch from taxing income when it is received to taxing income when it is spent. Although this switch would require a “major overhaul of the tax code,” many economists support this decision and believe it is future of the economy.

On the contrary, the I.R.S. understands cryptocurrencies offer major reductions in the cost of financial transactions, making it very appealing to the lower classes. There would also be less reliance on banks, which would increase the power of the Federal Reserve to control money. However, the opportunities are too great for tax evasion and illegal operations that the I.R.S. cannot continue to allow it. Although the cryptocurrency economy is growing steadily, it will need to find a way to prevent tax evasion while preserving anonymity in order for it to survive and stay attractive to buyers. For cryptocurrencies to be successful, societies will have to learn to trust the government, a very difficult task for many to grasp. With the rise of extremely advanced technology, it is inevitable that the economy will eventually transition to the cryptocurrency movement. Figuring out how to smoothly transition from worthless green pieces of paper to slick, glassy pieces of technology worth thousands of dollars each, the challenge to adjust will be difficult by eventually necessary.

Elizabeth is a marketing and information technology major in the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Ryan Simoneau.

The National Law Review recently posted an article on February 20, 2018 discussing the impact of the N.Y. Court of Appeals decision in Forman v. Henkin, a personal injury case. Forman, the Plaintiff, claimed she suffered spinal and brain injuries when she fell off the Defendants horse. Before the accident, the Plaintiff admitted to having an active Facebook account on which she posted pictures of her active lifestyle. After the accident, she claimed her life changed and she could no longer continue her active lifestyle and could barely type coherent messages. During discovery, the Defendant asked the court to compel the Plaintiff to provide full access to her Facebook account, regardless of whether it was public or private. At trial court level, the discovery (or electronic discovery) request was limited to photos before and after the accident and those relevant to her difficulty to type. When appealed, the appellate court limited the photographs provided in court. The court based its decision on another case, Tapp v. New York State Urban Development Corporation, in which it decided, “[t]o warrant  discovery, defendants must establish a factual predicate for their request by identifying relevant information in plaintiff’s Facebook account- that is, information that contradicts or conflicts with plaintiff’s alleged restrictions, disabilities, and losses and other claims.” The Court of Appeals, however, disagreed. They determined that public versus private did not matter in regards to social media and reinstated the trial court’s ruling.

The Court of Appeals did not grant full access to the Plaintiff’s social media to protect her privacy, yet does not see a difference between public and private Facebook posts. Typically in personal injury cases, the Defendants will ask the court for full, unrestricted access to social media which is oftentimes unwarranted and called a metaphorical fishing expedition. The Court of Appeals held that the information compelled has to be “appropriately tailored and reasonably calculated to yield relevant information.” What this means is that the request cannot be overly broad and burdensome, but relevant. This ruling mimics Federal procedure, specifically Federal Rule of Civil Procedure 26.

I am torn on the fairness of treating all Facebook posts the same regardless of whether it is private or public. In the 21^st century, social media is becoming more and more popular. People utilize Facebook and Twitter as if they are personal diaries. Sometimes a physical diary could be relevant to a case, I’m sure, but it seems like an invasion of personal privacy. On the other end, social media utilizes the internet and the internet is not private so it should all be treated the same. I believe that in social media discovery (Facebook, Twitter, Instagram), the court should use this appeal as a precedent and continue to limit requests to what is relevant but privacy settings should not matter.

Ryan is an undecided business major at the Stillman School of Business, Seton Hall University, Class of 2020.

Link: https://www.natlawreview.com/article/ny-court-appeals-no-difference-between-private-and-public-posts-discovery

Posted by Wasif Rahman.

Voters in Washington, who have taken on a role to guarantee paid sick leave to those working in the state recently, brought the Paid Sick Leave Act into play. The new law calls for employers to give workers an hour of paid sick leave for every 40 hours that they have worked. It also restricts when employers would be able to demand medical documentation from employees. While the new law may seem ideal for those working in the State of Washington, it poses a major problem specifically for airlines and its passengers. The problem was first pointed out by Airlines for America earlier this month.

Requiring airlines to conform to the Paid Sick Leave Act for their flight crewmembers is problematic since they are already subject to employment laws of their home state. This new law would enable those same crewmembers to also take advantage of Washington’s employment laws, including the Paid Sick Leave Act, if they are to pass through the state during their shift. Airlines for America filed a lawsuit against the State of Washington in the U.S. district court and subsequently released a statement noting, “airlines cannot operate their nationwide systems properly if flight crews are subject to the employment laws of every state in which they are based, live, or pass through”[1]. The defendant, the Department of Labor and Industries for the state of Washington, made no remarks on Airlines of America’s statement. Airlines for America suggests that Washington’s law promotes, to some degree, more crewmembers calling in sick as the airlines would have certain limitations to when they would be able to demand medical documentation to verify whether a crewmember is actually sick or not. They claim that if it gets to a point where enough crewmembers are calling in sick, it would lead to flights either being cancelled or delayed since there wouldn’t be enough flight crewmembers to serve the passengers. This would lead to severe disruptions not only at Sea-Tac International Airport in Washington but across all airports through out the country. From the airlines standpoint, it would be detrimental to their business having to tell their customers & passengers that they cannot serve their needs. Airlines also claim this new law violates the constitution.

Ultimately, this law is unfavorable to airlines as their passengers would have to face an increase in cost & time for their travels. On top of that, passengers are not purchasing these tickets for the flights to be cancelled or delayed. This isn’t only a major inconvenience for airliners but also for passengers. As of now, a few of the other airlines that have sued Washington State include JetBlue, United and Southwest.

Source:

[1] http://www.foxbusiness.com/markets/airlines-sue-over-new-washington-state-sick-leave-law

Wasif is a mathematical finance major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Brandon Bartkiewicz.

It has been almost two years since the Wells Fargo scandal broke into the headlines. It is not out of the ordinary to see a bank involved in shady activities; just look at the recession. However, in 2016, Wells Fargo committed a truly unforgivable crime, identity theft and fraud on a massive scale. To refresh, Wells Fargo had “… secretly opened millions of deposit and credit card accounts that may not have been authorized by customers, and that ultimately harmed those who had entrusted their financial affairs with the bank”. The goal of this was to create an illusion of more “sales” (accounts being opened). They did this by transferring money between accounts without permission of the accountholder. These activities were highly encouraged by an incentive system in place that would reward employees for opening accounts. Everyone was in on this; bank managers pressured their employees, and the executive board of Wells Fargo knew this was going on and did not stop it. By August 2017, the investigation found that as many as 3.5 million unauthorized accounts existed in Wells Fargo’s records.

The news of this wide scale fraud fueled a settlement with the U.S. Consumer Financial Protection Bureau, the Office of the Comptroller of the Currency and Los Angeles legal officials, totaling $185 million in penalties. Along with this, Wells Fargo would give “… $80 million in refunds — $64 million in cash and $16 million in account adjustments — to more than 570,000 auto loan customers who were charged for auto insurance without their knowledge.” As it should be, the bank is now in financial trouble as it tries to cover all of the direct and indirect costs relating to the scandal. However, the Janet Yellen and the Federal Reserve is not done disciplining the bank. Due to their “widespread customer abuses and compliance breakdowns,” the bank is now restricted from growing any more than its total asset size in 2017.  Along with this, the bank will remove some of the senior ranking executives in the company.  This is done to ensure that Wells Fargo will have sound business practices before it can grow again.

Personally, I believe that punishments handed down by the Federal Reserve were suitable for Wells Fargo. It provides a clear message to all banks that business malpractice is unacceptable and will be punished by harsh penalties. No bank should be able to get away with using client money and creating unauthorized accounts for personal gain. I wish the American legal system were stricter with companies so it would deviate them from doing illegal acts like this in the first place. What I did not like about this case was the fact that there are still plenty of people who have been long time officials of the company and are still employed by Wells Fargo. If you keep many of the same old pieces in place at a company, something like this is bound to happen again.

Brandon is a finance major in the Stillman School of Business, Seton Hall University, Class of 2020.

Source:

Link: https://www.usatoday.com/story/money/2018/02/02/fed-limits-wells-fargos-growth-citing-consumer-abuses/302973002/

Posted by Nicholas Rizzi.

Product liability cases are far from straight forward; recently the Sinclair v. Merck & Co., Inc., 195 N.J. 51 (2008) celebrated its ten year anniversary.  Within this complex case, the court misinterpreted the product liability statute, in which it “decided that economic losses were barred by the act and, furthermore, ipse dixit that Consumer Fraud Act claims were likewise barred (Law Journal Editorial Board).

The court decided that the definition of “harm” was to be interpreted as physical injury or damaged property as opposed to being harmed economically.  The main reason this is brought up again, is because the case was being celebrated, when in fact it should be considered for reevaluation.

“The UCC’s warranty claims in non-“harm” cases still stand . . . numerous courts still apply the CFA, notwithstanding Sinclair” (Law Journal Editorial Board).  The courts left no explanation for their decision to define harm as they did, and for this reason, it should be reconsidered.

Overall, I believe that just like in this situation, product liability cases are not clear cut, but especially in this situation, courts should reevaluate cases as times change.  It’s unfortunate for those who may have been excluded from a fair ruling in the past, but it is better to reevaluate and get it correct, than to continue issuing unfair rulings.  People have the right to be protected from product liability, and in order for that to occur, the court should have to elaborate on what caused them to interpret the word “harm” in the way they chose to do.

Nicholas is an undecided major in the Stillman School of Business, Seton Hall University, Class of 2020.    

Posted by Bailey Obetz.

In this article, Stephen Kimble, inventor of a toy that allowed consumers to shoot web-like material from their palms imitating the power of the superhero Spiderman, sued Marvel in 1997 for patent infringement because it was selling a similar item called the “Web Blaster.” In an agreement between Kimbel and Marvel, Kimbel was to receive royalties on past, present, and future sales of the toy. However, it was unbeknownst to Kimble and Marvel that the royalties had no end date. Under Brulotte vs. Thys Co. (1964 decision), royalties only have to be paid until the patent expires. The issue the courts are currently facing is should the decision of the 1964 case be overruled? Specifically, in Kimble vs. Marvel Enterprises, Kimble’s lawyer believes the case is “‘widely recognized as an outdated and misguided decision that prohibits royalty arrangements that are frequently socially beneficial.’” (Liptak p.6).

“Stare decisis” is Latin for “’to stand by things decided,’” which helps the courts be efficient in their reasoning by using prior cases as guides to their decision-making. Additionally, “stare decisis” makes the law predictable for citizens—they can rely on the court to make the best decisions based on what the law has been from previous cases. The courts are obligated to follow precedent, however sometimes they may rule that the case should no longer be followed. Reasons for not following a precedent could be technological or social changes that make the case inapplicable or if the case is no longer considered “good law.” When courts decide not to follow precedent, as they may in this case, they can receive a lot of attention, which is why this case is of particular interest.

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

Posted by Shanice Cooper.

In an article by Forbes Magazine entitled, Fake IRS Agent Scam Targets Public, Even Feds, while Identity Theft Tax Fraud is Rampant, Robert Wood outlines the seemingly growing issue of identity theft. This particular article takes a close look at how horrible identity thieves are especially during the inevitable tax season.

Identity theft according to Wikipedia, occurs when someone uses another’s personal identifying information, like their name, social security number, address or credit card number, without their permission or knowledge, to commit fraud or other injurious crimes. Identity thieves use the tax season to their advantage and flourish in it by secretly getting individuals’ personal information. How do they do this? One way is by simply calling an unsuspecting person and asking for their social security number, and bank account data: “The plan is frighteningly simple. Steal Social Security numbers, file tax returns showing false refund claims, and have the refunds electronically deposited.” The person doing the crime would call an individual and impersonate a government official; they would intimidate the person into giving up their personal information. “There is also a massive phone scam in which an impostor claiming to work for the IRS calls and intimidates you. You need to pay right away, and many do.” The article gave two popular ways in which identity thieves often steal information, but there are other ways.

In most cases, the taxpayer finds out that their social security number has been tampered with once they attempt to file a real tax return. However, by the time most people realize that they have been dealing with an imposter, the thief is long gone and often times untraceable. This tax season alone has had over 100,000 people affected by tax scams and is going down as the worst year for scams. “[T]he Treasury inspector general has already received more than 366,000 complaints, more than 3,000 people have been conned out of a total of $15.5 million.” These are outstanding numbers of innocent people who are being victimized by identity theft and tax scamming.

In conclusion, I think identity theft is horrible and no one should have to worry about having their information tampered. I personally know of individuals who have been affected by identity theft and have had to go through incredibly long processes to recover their credit. “In January 2015, a Maryland woman and former bank employee, was sentenced to 87 months in prison for her role in a massive and sophisticated identity theft . . . seeking refunds of at least $40 million.” Once the fraudster is caught they are faced with a number of felonies. In the end, committing the crime is not worth it.

Shanice is a business administration major at Montclair State University, Class of 2016.

Criminal law is certainly an important part of the study of business law, and Fourth Amendment questions always seem to come up in class.  Students are very interested in learning about when the police can search a person’s car, office or home, or when and where can they arrest someone. Generally, police need a warrant either to search a person’s property or to arrest, unless it falls within a constitutional exception.

Most students do not know that there is a difference between an arrest warrant and a search warrant.  An arrest warrant is an order by the court directing a sheriff, constable or police officer to find and arrest a person who is wanted for a crime.  In contrast, a search warrant permits a law enforcement officer to search a person’s place of residence or other location for evidence of a crime.  An arrest warrant, however, does not permit the police to search a home or building for a person where the police reasonably believes the person named in the arrest warrant may be found without the consent of the owner.  The question then becomes whether there are any other times police may enter certain areas of a third-party home and search for a person even though they are only acting pursuant to an arrest warrant.

In the New Jersey Appellate Division decision, State v. Craft, 425 N.J. Super. 546 (App. Div. 2012), Judge Graves held that exigent circumstances permitted the police to enter a bedroom of a third-party home to arrest defendant for a shooting even though they were operating solely under the authority of an arrest warrant.  The facts are as follows.

The Newark Police Department’s Fugitive Apprehension Team is responsible to dispatch officers to certain addresses where fugitives may be found based on certain intelligence.  James Craft was wanted for a shooting.  Officers arrived at the location noted in the arrest warrant.  It was a three-family dwelling located on South 13th Street.  The police believed that defendant was residing there with family on the second-floor.

The front door to the residence was open, and the police proceeded to the second floor.  The officers were in plain clothes, but at least one of them was wearing a badge around his neck. Defendant’s mother opened the door and permitted the police to enter.  The officers told defendant’s mother that they had a warrant to arrest her son. Defendant’s mother told the police that her son was not there, but offered to call him on her cell phone.  Upon dialing the number, the police heard a phone ringing behind a bedroom door. The officers believed it was defendant’s cell phone ringing and that he would most likely be in the bedroom.

When they opened the bedroom door, they found defendant attempting to escape.  The police testified they saw defendant drop a handgun as he climbed through the window.  They also discovered five vials of cocaine in plain view on the top of a dresser.  Defendant was arrested and charged.  The trial court suppressed the evidence finding that the “coincidence of a phone ringing” was insufficient evidence to justify entry into the bedroom without a search warrant and that the police did not have an “objectively reasonable belief” that “defendant both resided at and would be found at” his mother’s apartment.

On appeal, the court reversed, holding that “there was no constitutional violation by the police, and it was error to suppress the items that were seized. The arrest warrant provided probable cause for defendant’s arrest; the officers entered the apartment with [defendant’s mother’s consent]; and [the police] had reason to believe defendant was present in an adjoining room when a cell phone began ringing after [defendant’s mother] called her son.  In addition, the officers knew the arrest warrant was for ‘a shooting’ and, therefore, defendant was potentially dangerous.  Under these circumstances, there was a compelling need for immediate action to apprehend defendant, and it was impracticable for the officers to obtain a search warrant.  Thus, their entry into the bedroom was objectively reasonable, and the items seized were in plain view.”

Here, the exigency to protect persons inside the home from being shot by a potentially armed individual excused the police from failing to consider the possible “coincidence” of the phone ring. According to one of the officers, upon hearing the phone ring at the time defendant’s mother dialed, he reasoned since people generally stay close to their cell phones, he would find defendant next to his.  As a result, the search into the bedroom was reasonable.

Posted by Faris Alzahrani.

On June 20th Christiano Ronaldo was accused by the government prosecutor for evading tax four times amounting to $16.5 million. Ronaldo was investigated and was expected to appear before Pozuelo de Alarcon court No. 1 on July 31. His summoning accorded with the same prosecutor who indicted Mourinho for evading tax two times. The prosecutor reported that there was enough evidence that Christiano Ronald used a shell firm to hide the cash she had acquired from the team image rights. However, Ronaldo pleaded not guilty.

It believed that Ronald had to move out of the country and join another football club because of the accusations against him. It was alleged that Mourinho committed tax deception in a period between 2011 and 2012; this is according to Madrid’s prosecutor. All of the evidence was based on the facts delivered by Spain Tax Office that indicated that Mourinho also hides money from profit rights and avoided to pay tax (Fox, 2017).

Everything was left in judges hands. It is crucial to note that these individuals are not the first to be accused of tax fraud. Last year a Barcelona striker, Lionel Messi was indicted for tax fraud on three counts that amounted to $4.6 million, this mainly from the income made from image rights. He was given a 21-month jail sentence, but he was not expected to serve in prison, since it was his first offense and his sentence was below two years.

Faris is a graduate student at the Feliciano School of Business, Montclair State University.

Reference:

News, F. (2017, June 20). Cristiano Ronaldo, Jose Mourinho caught up in Spain tax scandal. Retrieved from Fox News: http://www.foxnews.com/sports/2017/06/20/cristiano-ronaldo-jose- mourinho-caught-up-in-spain-tax-scandal

Posted by Joseph Papandrea.

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

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

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

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

Posted by Rilind Dauti.

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

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

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

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

Posted by Connor Lynch.

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

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

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

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

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

Posted by Justin Gandhi.

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

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

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

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

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

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

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

Posted by Kate Robinson.

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

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

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

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