Posted by Samar Baeshen.

The Fourth Amendment to the U.S. Constitution reads” The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no Warrants shall issue, but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.” The amendment protects people from unreasonable searches and requires the police to have a warrant. However, there are a considerable amount of debate of whether the cell phones of people who are arrested can be searched without having a warrant.

According to an October 21, 2015 news article in the NBC news, “Feds detail how they secretly track Americans’ phones.” In a testimony, some long-concerns about how Feds utilize secret devices to track Americans ‘cell phones were clarified by Federal law enforcement officials. Regarding the secret devices, for many years police have been utilizing Stingray device which connects someone’s phone with cell phone towers.

Congress has been informed that Stingray devices are not using to track calls or messages but to locate someone. Moreover, new rules have been issued by the Department of Justice regarding the lack of warrants of tracking cell phones. However, agency officials confirmed that there are some situations do not require warrants. Therefore, many arguments have been raised that Americans’ phones ought to be protected according to their Fourth Amendment rights.

Lastly, according to ACLU technologist Christopher Soghoian, the nation’s leading expert on Stingrays, the FBI has begun using the device for almost 20 years, and this is the first congressional hearing. The agreements about Stingrays between the FBI and local police are secret. However, due to the legal battles led by the American Civil Liberties Union this becomes public.

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

Posted by Michael Habib.

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

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

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

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

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

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

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

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

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

Posted by Giancarlo Barrera.

First it was Target, Home Depot, and now, JPMorgan Chase.  They are the next victim under cyber attack. Chase is the biggest bank by assets in the US. They are also the dominate bank in New York City, where the majority of banks’ cooperate headquarters are located . “JPMorgan Chase has 65.8 million open credit card accounts, and 31.8 million of those accounts with sales activity, according to its most recent quarterly report. Chase also has 30.1 million checking accounts.”  According to what the FBI has been investigating, names, addresses, phone numbers, and emails were taken, but no passwords and social security numbers

It was reported that the hackers did not receive any money from this cyberattack. “The bank’s Chairman and Chief Executive Officer Jamie Dimon said that the company will spend $250 million this year on cybersecurity, but has been losing security employees to other banks with more “expected to leave soon.”

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

The U.S. Attorney’s Office in Washington D.C. is the first federal office to set up a unit to identify anyone wrongfully convicted of a crime.  The Conviction Integrity Unit will review cases where defendants offer new evidence that was not available at the original trial, such as DNA evidence, to prove their innocence.  Ronald Machen, Jr., the U.S. Attorney of the Washington office said in a statement, “As prosecutors, our goal is not to win convictions, but to do justice.”  Machen further said, “This new unit will work to uncover historical injustices and to make sure that we are doing everything in our power to prevent such tragedies in the future.”

The Conviction Integrity Unit follows similar ones established in state offices.  The modus for the creation of a separate unit to review these cases arises from five convictions that were vacated by the court, including that of Donald Gates, who was convicted in 1982 of rape and murder based on hair evidence.  DNA testing made available in 2009 proved that he was innocent.

The office is working with defense lawyers and the Mid-Atlantic Innocence Project, a non-profit organization which fights wrongful convictions.  Over the last four-years, more than 2,000 files involving hair or fiber evidence have been reviewed by the FBI.

Posted by Mihran Naltchayan.

On January 16, 2012 around 1:30am, there was a burglary at a jewelry store named “Taline’s Jewelry” in Edgewater, NJ. Burglary is the breaking and entering into a building with the intent to commit a felony therein.

The jewelry store was arranged with a front display space, and the store next door was empty. The empty store is a big building that wrapped around the backend of the jewelry store. The “Ninja Bandit Burglary Crew” cut into a common wall of the empty store and entered the jewelry store from the backend so nobody can see them from the front side. This crew had three people. They didn’t realize that the walls had a vibration sensor that sends a quiet message to the Edgewater police department. So when the police officers arrived, they tried to run away.

“An Edgewater cop fired at least one shot at a thief who used a police cruiser as a getaway car, after a group of officers interrupted an overnight jewelry store break-in involving an alleged member of the infamous ‘Ninja Bandit’ burglary crew.” (Cliffviewpilot.com). The officers arrested 2 of the 3 people. They found the cop car in Teaneck, New Jersey 9:30 am the same day. The third guy wasn’t found.

The two men were brought to a Municipal Court judge in Edgewater and the judge ordered the defendants to be held on $50,000 bail each; they were charged with burglary, resisting arrest, criminal arrest and possession of burglar tools. (Cliffviewpilot.com).

I wrote about this article because this jewelry store is my father’s, and I thought it would be a good article to use for business law, since we cover criminal law in class.

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

A police officer in New Jersey is accused of witness tampering and official misconduct. The State claims the officer tried to contact a state trooper and convince him not to appear in court on DUI charges against his cousin.

The prosecutor seeks to introduce as a “prior bad act” an incident where the officer tried to intervene on a DUI charge against his uncle. The State’s key witness is a former municipal prosecutor who claims he was in a private meeting with the arresting officers when defendant tried to get his “attention” in the matter. The arresting officers indicated the arrestee was defendant’s uncle. The prosecutor allegedly exclaimed, “You should know better than this, ” and then later had the case transferred to another court. The officer’s lawyer argued to the court, “My guy said nothing. It’s unfair to conclude he was there to interject himself badly. That’s speculation.” He further argued that his client could have entered the room to talk about two other cases in which he was involved at the time. The officer was never charged with any misconduct.

That fact was argued to the the judge.  Because he was never charged, the attorney argued, to allow a jury to hear about it would be “‘very prejudicial . . . You’re asking me to try two cases in front of the jury at the same time.’”

The court questioned the prosecutor extensively as to why he was never charged, but the prosecutor contended the State could not prove the incident beyond a reasonable doubt.  However, the standard, the prosecutor argued, for prior bad acts was a “‘lower standard.’” The standard is clear and convincing evidence, and court inquired how was the evidence clear and convincing when the municipal prosecutor stated the officer did not say anything to him. The prosecutor, however, maintained that the officer made several calls to the processing room and “‘showed interest’” when his uncle was being booked. The judge indicated there was nothing in police department’s policy that prohibited an officer to inquire about the status of a family member.

The State has an uphill battle. It appears they have at least a preponderance of the evidence that the officer did anything to influence the municipal prosecutor but may fall short of the required clear and convincing evidence. Just showing up in a room without saying anything shifts the focus on the arresting officer’s statement to the municipal prosecutor that the arrestee was his uncle and the municipal prosecutor’s assumption that simply by his very presence he was there to influence him not to prosecute his uncle. This may not be enough to get over the hurdle.

New Jersey Rule of Evidence 404(b) provides, in material part, that:

evidence of other crimes, wrongs, or acts is not admissible to prove the disposition of a person in order to show that such person acted in conformity therewith. Such evidence may be admitted for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity or absence of mistake or accident when such matters are relevant to a material issue in dispute.

The rule is substantially similar to Federal Rule of Evidence 404(b).  N.J.R.E. 404(b) exists primarily “to guard a defendant’s right to a fair trial by avoiding the danger that a jury might convict the accused because the jurors perceive him to be a bad person.” New Jersey Div. of Youth and Family Services v. I.H.C., 415 N.J.Super. 551, 571 (App. Div. 2010).

The federal advisory committee notes state: “No mechanical solution is offered,” and deciding whether to admit evidence of other crimes depends on “whether the danger of undue prejudice outweighs the probative value of the evidence in view of the availability of other means of proof and other factors appropriate for making decisions of this kind under Rule 403.”

Under State v. Cofield, the prosecution must satisfy a four-prong test before evidence of a prior bad act can be admitted:

1. The evidence of the other crime must be admissible as relevant to a material issue;

2. It must be similar in kind and reasonably close in time to the offense charged;

3. The evidence of the other crime must be clear and convincing; and

4. The probative value of the evidence must not be outweighed by its apparent prejudice.

127 N.J. 328 (1992).

In State v. Collier, the appellate division upheld the trial court’s decision to permit testimony about a prior incident involving animal cruelty in order to show the defendant had a motive to rob and shoot the victim, because the defendant knew the victim told the police that defendant was involved in the animal cruelty incident. 316 N.J.Super. 181, 196 (App. Div. 1998).  The fact that both acts were dissimilar is not dispositive as to admissibility. Id. at 194.

In the present case, the State has to show that there was some motive by the defendant to contact the state trooper to stop him from testifying based on his prior act of entering a room when his uncle’s DUI was being discussed by the arresting officers and the municipal prosecutor. That appears to show more a pattern of behavior than motive as required by the rule. And whether or not it amounts to clear and convincing evidence of motive remains to be seen.

Posted by Keith Cleary.

A lawsuit has erupted between Exxon Mobile and the state of New Jersey, particularly two industrial sites in New Jersey, Union and Hudson counties, according to the New York Times (Sullivan). The lawsuit, “which has been filed in 2004 and litigated by four administrations, is a $8.9 billion dollar lawsuit.” (Sullivan). The lawsuit is about the contamination that Exxon left on the marshes and forestland, and New Jersey is willing to pay $250 million dollars to clean up the 1,500 acres of petroleum contaminated fields. The $250 million dollars that Exxon offered to pay is not nearly enough to pay the amount it would actually take to clean the fields.

The amount that Exxon offered to clean up the fields, “infuriated environmentalists and a state lawmaker, after experts determined that it would cost billions to clean up the properties in northern New Jersey.” (Sullivan). In particular, the areas that the lawsuit covers are the facilities of the Bayonne and the Bayway sites, where surprisingly, the use of chemical production and petroleum refining goes back to a hundred years. Those years of spills also contributed to the contamination of the lands. “A report compiled for the state by Stratus Consulting of Colorado determined that it would take $2.5 billion to clean the site up, and an additional $6.4 billion to restore enough wetland and forestland.” (Sullivan).

Many people are questioning why the state decided to settle for such a low amount of money. Debbie Mans, head of NY/NJ Baykeeper, said, “I think it’s criminal to settle so low.” (Sullivan). Settling an almost $9 billion dollar lawsuit with $250 million is by far criminal. It is like paying $500 dollars for a $250,000 Ferrari. However, along with making the state accountable for the cleanup of the area, they were trying to “reimburse taxpayers for the years of lost use—the same way a victim of a car accident can seek lost employment wages from the responsible driver.” (Sullivan). So, not only are they trying to make up for the damages but also lost time.

There was also speculation about donations made from Exxon to the Republican Governor’s Association while Christie was chairman of the organization. “The Exxon Mobile Corporation contributed more the $500,00 to the association in 2014 during Christie’s tenure, and $200,00 in 2013.” (Sullivan). Even though all of these contributions were made, apparently none of it had anything to do with Christie being chairman. With the small settlement, it was called into question what it would be used for. Prior to this, Christie’s administration used $130 million of a $190 million settlement with a Passaic River polluter to the state’s general fund.

Keith is a business law student at Montclair State University, Class of 2017.

Posted by Rizzlyn Melo.

The car-manufacturing company, Tesla, has been battling with New Jersey government officials for the right to sell their premium electric cars in the state. Tesla differs from other car-manufacturers because they sell their vehicles directly from small, independently-owned sites instead of large dealerships. Many of Tesla’s facilities are actually located in various malls in New Jersey. The issue with this practice is that under New Jersey law, cars can only be sold through registered dealerships. In the article, this legislation “was put into place at a time when small local dealers were perceived as vulnerable to the moves of major national manufacturers.” Because of Tesla, this law has been targeted and challenged by various carmakers and consumer-rights groups. Fortunately, it can be said that their efforts have not gone in vain. In March, Governor Chris Christie signed new legislation that allows Tesla to operate at four sites in New Jersey. Shortly after this was signed, New Jersey lawmakers approved an amendment granting zero emission car manufacturers the right to operate dealerships in the state.

Tesla’s success story in New Jersey shows that the market is modernizing. Legislation that was once effective in the past can actually be disadvantageous in the present day. While the law requiring sales through registered dealerships was once helpful to small businesses, it prevented a company from potentially helping the environment. Tesla only produces zero-emission, luxury cars. They are a company seeking to reduce society’s carbon footprint by introducing a sleek, fashionable car to the market that does not require gas. The government’s initial refusal to allow this company to conduct its business in New Jersey made legislators look like they would sacrifice an environmental advancement for the sake of large dealerships. Tesla’s win in New Jersey represents more than the right to sell cars; it is a win for the evolving market that is in need of environmentally friendly products.

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

Posted by Briana Brandao.

This article, written by MaryAnn Spoto, brings to question whether or not Rutgers University violated the New Jersey open public meetings law, during one of their meetings held back in September of 2008. Francis McGovern Jr, a lawyer as well as audience member of this meeting, objected to the way these meetings were promoted and handled. McGovern noted that audience members waited over four hours while board members discussed issues behind closed doors. Once the board of governors finally reassembled, many audience members had grown tired of waiting and already left.

McGovern also noted that the Rutgers board of governors failed to mention topics discussed behind closed doors such as talk of Rutgers new football stadium. She stated, “This case is about governmental transparency,” and believes these long and tedious closed sessions dissuade public attendance. During her case, she asked that the court make it mandatory for Rutgers to hold public meetings first. She believed that by not bringing to light all issues discussed among Board of Governors, that Rutgers violated the law.

Although many may argue that McGovern had reason behind her case, the Supreme Court still ruled that Rutgers University was in compliance with the law. The court did not believe that Rutgers conducted their meetings in a way that discouraged public attendance. The court also stated that Rutgers Board of Governors did not violate the open public meetings law.

However, the court did agree that lawmakers should in fact look into tightening the law. Discussion of tightening this law would allow citizens the opportunity to challenge public organizations trying to get around the law. All in all, Rutgers University was pleased with the court’s decision.

Briana is a business administration major with a concentration in management and fashion studies at Montclair State University, Class of 2016.

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

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

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

It is now legal for Tesla and other manufacturers of zero-emission cars to sell directly to customers in New Jersey. Tesla’s business model includes selling its battery-driven cars from its boutique stores. One of them is located in Short Hills Mall, Short Hills, NJ.

Customers are free to learn about the vehicles through interactive displays and test drives. Tesla does not want to sell its cars through franchises because they sell mostly gas-powered vehicles. Since most of their revenue comes from gas-powered sales, franchises would not be encouraged to sell zero-emission cars.

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 Da’Naysia Aarons.

In an article called “Forced Arbitration,” Gordon Gibb, describes how citizens in the United States are taken advantage of by popular rich companies, such as, Time Warner Cable, T-Mobile, Wells Fargo and several others. Many consumers who buy products from these companies do not realize that they are facing forced arbitration.

Companies forced arbitration through a contractual clause that waives any rights to purse a dispute through courts. For example, a consumer decides to purchase a phone from T-Mobile. Before the consumer can buy the product he or she has to sign a document. In many cases, the force arbitration clause occurs in fine print at the bottom of the page, so many consumers are not aware of what they are signing. If the consumer does not sign the contract, they are not able to purchase their item. However, if the consumer signs the contract they receive their item.

If the consumer decides that he or she wants to sue the company, because something went wrong with the product, that consumer will never get their day in court because he or she signed the contract giving over that right. In the article, an appellate attorney, Deepak Gupta, states, “[Forced arbitration] is really an exit clause from the civil justice system and people aren’t aware that they’re even entering into these contracts.”

Force arbitration has become a popular issue in the United States. Several people are now starting to challenge its use. It is not right on how the government and companies are taking advantage of these consumers.

Da’Naysia is an international business major at Montclair State University, Class of 2017.

Posted by Briana Brandao.

This article, written by MaryAnn Spoto, brings to question whether or not Rutgers University violated the New Jersey open public meetings law, during one of their meetings held back in September of 2008. Francis McGovern Jr, a lawyer as well as audience member of this meeting, objected to the way these meetings were promoted and handled. McGovern noted that audience members waited over four hours while board members discussed issues behind closed doors. Once the board of governors finally reassembled, many audience members had grown tired of waiting and already left.

McGovern also noted that the Rutgers board of governors failed to mention topics discussed behind closed doors such as talk of Rutgers new football stadium. She stated, “This case is about governmental transparency,” and believes these long and tedious closed sessions dissuade public attendance. During her case, she asked that the court make it mandatory for Rutgers to hold public meetings first. She believed that by not bringing to light all issues discussed among Board of Governors, that Rutgers violated the law.

Although many may argue that McGovern had reason behind her case, the Supreme Court still ruled that Rutgers University was in compliance with the law. The court did not believe that Rutgers conducted their meetings in a way that discouraged public attendance. The court also stated that Rutgers Board of Governors did not violate the open public meetings law.

However, the court did agree that lawmakers should in fact look into tightening the law. Discussion of tightening this law would allow citizens the opportunity to challenge public organizations trying to get around the law. All in all, Rutgers University was pleased with the court’s decision.

Briana is a business administration major with a concentration in management and fashion studies at Montclair State University, Class of 2016.

In Heien v. North Carolina, the Supreme Court held that where a police officer makes a stop based upon a reasonable mistake about a law, the stop is justified.

In this case, an officer stopped a vehicle because one of its two brake lights was out, based on a misunderstanding that the North Carolina law permitted only one working brake light. The officer stopped Heinen’s vehicle because one light was not working and then proceeded to a consensual search of the car. The search turned up a bag of cocaine located in a duffle bag in the trunk. Heinz was arrested and convicted of attempted drug trafficking. The question presented to the Court was whether a police officer’s reasonable mistake of law can give rise to the reasonable suspicion necessary to uphold a seizure of an automobile and the occupants in it under the Fourth Amendment.

The North Carolina statute reads that a car must be:

equipped with a stop lamp on the rear of the vehicle. The stop lamp shall display a red or amber light visible from a distance of not less than 100 feet to the rear in normal sunlight, and shall be actuated upon application of the service (foot) brake. The stop lamp may be incorporated into a unit with one or more other rear lamps. N. C. Gen. Stat. Ann. §20–129(g) (2007).

The Court concluded that the statute required only one stop lamp to be working. However, the officer was under a different impression of the law at the time. A nearby statute requires that “all originally equipped rear lamps” be functional. N. C. Gen. Stat. Ann. §20–129(d). The officer made the stop under a mistake in law. Nevertheless, the Court held that even if an officer reasonably misunderstood the law, as long as the officer conducts a search or seizure reasonably under the Fourth Amendment he is acting justifiably.

“To be reasonable is not to be perfect, and so the Fourth Amendment allows for some mistakes on the part of government officials, giving them ‘fair leeway for enforcing the law in the community’s protection.’” Reasonable mistakes of fact are permissible. For example, when someone consents to the search of a home, the search will be considered valid even if the officer mistakenly believes that the person consenting is the owner.

Reasonable mistakes of law are also permissible. “Reasonable suspicion arises from the combination of an officer’s understanding of the facts and his understanding of the relevant law. The officer may be reasonably mistaken on either ground.” Even laws that police enforce that are later declared unconstitutional by a court does not rebut an officer’s reasonable assumption that the laws were valid at the time.

Heinen argued that there is no margin of error for an officer’s mistake of law. He argued the legal maxim: “Ignorance of the law is no excuse.” If persons cannot get out of trouble by claiming they were mistaken about the law, then neither can the police.

But the Court concluded the law protects against only “reasonable mistakes,” and therefore, “an officer can gain no Fourth Amendment advantage through a sloppy study of the laws he is duty-bound to enforce.” The Court further concluded Heinen’s reliance on the legal maxim is misplaced. A person cannot escape criminal liability by claiming he did not know the law, but neither can the government impose criminal liability by a mistaken understanding of the law. The Court explained:

If the law required two working brake lights, Heien could not escape a ticket by claiming he reasonably thought he needed only one; if the law required only one, Sergeant Darisse could not issue a valid ticket by claiming he reasonably thought drivers needed two. But just because mistakes of law cannot justify either the imposition or the avoidance of criminal liability, it does not follow that they cannot justify an investigatory stop.

In this case, Heien did not appeal his brake-light ticket. Instead, he appealed a cocaine-trafficking conviction, as to which he did not claim the police made either a mistake of fact or law.

Posted by Ovais Ahmed.

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

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

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

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

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

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

Posted by Deena Khalil.

On Wednesday, November 6, 2014, there was a court hearing about big-time banks being sued for manipulating a financial benchmark, Libor, by “U.S. municipalities and financial funds who argue they suffered financial damages by receiving lower interest rates on transactions as a result of the suspected manipulation.” Libor is short for the London Interbank Offered Rate, and it’s used to set the rates on things worth trillions of dollars such as loans, credit cards, and some complex derivatives. The benchmark is calculated each business day by averaging out interest rates in which banks estimate they could borrow from each other. But these banks have to be within the London trading operations in order to be part of the benchmark. Some of the banks that are being accused are JPMorgan Chase, Citigroup, and Bank of America.

Plaintiffs include U.S. municipalities and financial funds who argue they suffered financial damages by receiving lower interest rates on transactions as a result of the suspected manipulation. They allege that evidence gathered by investigators in the U.S., Europe and around the globe shows bank traders involved in the rate-setting process rigged the outcomes to boost their trading profits.

The banks accused are trying to get these cases to be dismissed There are U.S banks that have been struck with billions of dollars in penalties due to Libor manipulation. For example, JPMorgan was fined $78 million by European authorities! Some banks have settled cases, but defendant banks in the present case are seeking to dismiss due to “the lack of personal jurisdiction.” Attorneys “argued the recent Supreme Court rulings established that corporations are ‘at home’ only in their respective countries and in most cases are subject only to lawsuits filed there, not in U.S. courts.” They claim that the Libor manipulation activity occurred outside the U.S.

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

Members of organized crime, drug dealers, and terrorists transact their “business” in cash to hide their tracks. As part of a scheme to launder money (make it look it was earned legitimately), criminals will deposit their ill-earned cash in bank accounts. In response, Congress passed the Bank Secrecy Act, requiring banks to assist the government in catching money launderers.

Under the Act, banks are required to report any cash transaction or combination of cash transactions in excess of $10,000 to the IRS.  Knowing this, criminals resort to structuring. Structuring is the deliberate parcelling of a large cash deposit into a series of smaller transactions in order to avoid detection by regulators. When bank officials suspect structuring is occurring, they are required to file a suspicious activity report, or SAR, and notify regulators of what they believe is happening.

In Ratzlaf v. United States, 510 U.S. 135 (1994), the Supreme Court found that government had to prove that defendant acted with knowledge that structuring is unlawful. As a result, Congress removed the “willfulness” requirement making it easier for the government tor prosecute structuring cases. The IRS, however, has been seizing assets of legitimate businesses and individuals without any proof or any charges filed. Small business and individuals can be a target. In one case, the IRS seized $66,000 from an Army sergeant’s college savings account, even though the sergeant was told by the bank teller to make smaller deposits in order to avoid taxes. Removing the “willfulness” requirement makes structuring a strict liability crime.

In a written statement, Richard Weber, the chief of Criminal Investigation at the IRS, said, “After a thorough review of our structuring cases over the last year . . . IRS-CI will no longer pursue the seizure and forfeiture of funds associated solely with ‘legal source’ structuring cases unless there are exceptional circumstances justifying the seizure and forfeiture and the case has been approved at the director of field operations (D.F.O.) level.”

Posted by Chengjie Chu. 

The business dispute between Qualcomm and Apple has a long history, focusing on patents. In fact, Apple and Qualcomm were once close business partners. However, the quarrel between Apple and Qualcomm stems from the fact that Apple provided relevant correct information to the South Korean government when it was investigating Qualcomm, which made the situation of Qualcomm become very awkward at that time. Because of this, Qualcomm withheld $1 billion in royalties it had promised to pay Apple. The matter was also investigated by the federal trade commission of the United States. After verification, Qualcomm has paid billions of dollars of kickbacks to Apple in exchange for the exclusive chip purchase agreement signed by Apple in 2011 and 2013 to exclude competitors. In fact, this kind of transaction is a kind of a monopoly, which is very unfair to other downstream enterprises. Moreover, this kind of transaction is illegal in Europe, America, Japan, China or Taiwan.

On December 10, 2018, China’s Fuzhou intermediate people’s court granted Qualcomm to Apple’s four subsidiaries in China in the two preliminary injunctions to limit Apple to a total of seven related products in China and to stop selling immediately, because Apple’s seven products infringe the patents of Qualcomm, as well as in China imports and sales. And the commercial war continues. We don’t know what result will be.

Both for enterprises and individuals, the protection of patents is very important, and the legal punishment for patent infringement is also very serious. The reason for the long and wide commercial war between the two transnational corporations on the patent issue may lie in the combination of the two corporations in the field of modern communication, which makes it difficult to solve some problems with a fixed legal formula, and the patent dispute will become very difficult. And other legal issues arising from patents, such as monopoly and corruption, will become a major uncertainty in the debate.

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

Resource:

https://www.digitaltrends.com/business/apple-vs-qualcomm-news/

Posted by Rui Hu.

2·23 Jordan trademark case means that on February 23, 2012, Michael Jordan appeared in a video claiming a lawsuit in a Chinese court, alleging that Jordan Sports Co., Ltd. (referred to as Jordan Sports) infringed on his name. The result of this case ended in failure. Some facts of the case are set forth here.

In 1983, Nike signed a contract with Michael Jordan, a rookie, and shortly thereafter, launched a basketball shoe brand named “AIR JORDAN.” Nike’s bold move has created a brand myth. Jordan Sports is a Chinese company that has evolved from a factory that specializes in the production of daily necessities. Moreover, the “Jordan” trademark mainly used by Jordan Sports was registered before 2003.

Several important reasons why Nike lost the lawsuit: 1) Although Nike registered the “Michael Jordan” trademark in China in 1991, its Chinese trademark registration began in 2008, and since the relevant procedures do not comply with some Chinese systems, the Chinese trademark has not been registered yet. For this reason, the Nike could not have the Chinese trademark for now; 2): Michael Jordan is only a big name in the basketball field, and Jordan Sports involves a number of different sports areas, including running, basketball, leisure sports, etc., and the name “Jordan” is just an ordinary name in the United States. Legally speaking, “Jordan” is not the same as Michael Jordan; 3): The logo of Jordan Sports is not similar to the logo of “Flying Jordan” previously registered by Nike, because Jordan Sports just used a rear view of the “flying man” Jordan and it is difficult to recognize Michael Jordan from this icon.

Article: https://baike.baidu.com/item/2%C2%B723%E4%B9%94%E4%B8%B9%E5%95%86%E6%A0%87%E6%A1%88/17206394?fr=aladdin

Posted by John Nativo.

On February 15, 2019 President Donald J. Trump declared a national emergency on the United States southern border due to illegal immigration as many illegals continue to cross the border. Trump is declaring sufficient funds in order to build a border wall to prevent illegal immigrants from crossing over the border. Trump’s reasoning for building the border wall is the enormous amount of money the nation will save billions of dollars by not having to pay for illegal immigrants. However, Many Democratic leaders disapproved of Trump’s action and are trying to confront the situation in ways that they feel are necessary to overturn this national emergency.

As of February 19th, sixteen separate states have filed a lawsuit in federal court against the President’s declaration of calling a national emergency. These states believe Trump’s executive power is unconstitutional as he is “invoking” his emergency power to redirect money from being used in other federally funded programs in order to have money to pay for the wall. The controversy presented in the situation is if the states have correct standing to sue the President in this matter. According to the Constitution, federal judicial power is limited as it permits it to only consider cases and controversies. The requirement of the case to be “standing” is to see if the plaintiff, which are the states, to see if they have any personal stake in the outcome of the litigation. To prove this standing requirement, a plaintiff must demonstrate it has clearly suffered a concrete injury.

States usually do not have standing to sue the federal government, this is why this specific case is unique. States do not really have the power to enforce their citizen rights against the federal government. However, a state has the right to assert interest in physical and economic well-being of its populace but are technically not allowed to have a standing to sue the federal government on behalf of their citizens. Trump and his administration are most likely going to bring a motion to dismiss the case, but the court must seek to see if this is a preliminary matter to see if these injuries meet the constitutional requirement of standing. Overall, the outcome of this matter will be a very interesting one and one of the sides will not be happy with the result.

BusinessLawBlog.docx

John is a business administration major at the Stillman School of Business, Seton Hall University, Class of 2022.

Posted by Wenxuan Yu. The minimum wage for workers must be guaranteed, which is the basis for social stability. Yet many social workers have unimaginably low basic salaries. Julio Payes from Guatemala has two jobs. He works 80 hours a week. He had to work sixteen hours a day, seven days a week, to pay for basic living expenses, and he once said he felt like a zombie.

The federal minimum wage was first established by the fair labor act of 1938 (FLSA). The bill’s immediate goal is to reduce poverty. Minimum wage legislation is designed to maximize the total income of minimum wage workers and lift their families out of poverty. The FLSA is administered by the U.S. department of labor’s wage and hour division. Today, the act’s labor standards affect the rights of more than 130 million workers, both full-time and part-time, in the private and public sectors.

After that, the Emeryville city council began to reconsider the city’s minimum wage. Emeryville followed Oakland’s decision to raise the minimum wage to $12.25. The city’s minimum wage was eventually raised to about $16 an hour by 2019, thanks to labor marches and advocacy efforts. That’s equivalent to the highest minimum wage in the United States, and even higher than the minimum wage in major cities like San Francisco and Seattle.

And in 2016, the minimum wage for workplaces with fewer than 55 employees jumped to $13 an hour, up from $14 in 2017 and $15 in 2018.On July 1, wages for all businesses will hit $16 an hour.

This is good news for all workers. At the same time, the increase in the minimum wage also led to many other benign effects. Patients are less stressed, and in high-wage states they are better able to pay for their care. Higher wages have also made society safer, and rates of child abuse and teenage drinking have fallen. Therefore, the implementation of the correct minimum wage is conducive to the development of society.

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

Posted by Jidong Zhang.
The recent Nike incident caused a heated discussion among sneaker owners. Nike’s shoes are usually representative of comfort, durability, and high-tech integration. Most people have Nike brand sports shoes. Nike’s latest shoes, “Back to Future,” has been sold on the stockx for thousands of dollars because of the automatic lace-up feature. This time the defective shoes broke the stereotype of Nike, also let people think about the balance between the player’s right to health and business transactions.

As we all know, sports brand companies will provide sponsorship funds for famous universities. This will not only promote the development of the university’s sports career, but also bring benefits to the company. Players don’t need to buy shoes at full price, as long as they wear them for a few games. In this part of the agreement, the player seems to be wearing a sneaker for a game and then will get the shoes for free. In fact, when the players wear the sneakers, the game will be broadcast live or recorded, so that the sports brand company will be advertised. To a certain extent, an employment relationship exists between the player and the sports brand company. As the employee, the player should be guaranteed to be safe and healthy during the game, and the sports brand company should take on such responsibility, but these responsibilities are usually are ignored.

As for Williamson, in this incident, if he suffers from injuries due to defective shoes this will ultimately affect his career. Would Nike be responsible for him? For a player, good health is crucial. The university or the league organizations should fully consider the interests of the players when signing the equipment agreement with the sponsor. The law related to this case needs to be improved.

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

Work Cited:

http:// https://www.nytimes.com/2019/02/21/sports/zion-nike-shoe-ncaa.html?action=click&module=Top%20Stories&pgtype=Homepage

Posted by Simran Patel. Throughout the country, the opioid epidemic has seen a 10 percent rise and taken the lives of more than 72,000 people due to overdoses. New Jersey has filed a lawsuit against a subsidiary of Johnson & Johnson that manufactures opioids and wants them to be liable for their products. The pharmaceutical company has been accused of misleading patients about the addictive dangers of the drugs. New Jersey Attorney General, Gurbir Grewal, is trying to contain this spiraling opioid crisis by bringing legal action against the subsidiary, Janssen Pharmaceuticals. Mr. Grewal states that this company minimized the risks of opioid addiction in their marketing messages and targeted patients and older people who had little to no knowledge of opioids. New Jersey is known for its pharmaceutical industry and has a long history of producing vital, lifesaving drugs. Therefore, Mr. Grewal has said that they cannot turn a blind eye to the violation of laws and lives that are being threatened by companies like Janssen Pharmaceutical.

Eleven states, including New Jersey, have filed separate lawsuits against the manufacturer, Purdue Pharma, of the popular opioid painkiller OxyContin. More than 40 state attorney generals have joined New York state in an investigation of manufacturers and distributors of opioids. The federal government has not been effective in regulating the practices of pharmaceutical companies, so the opioid crisis has become a state issue. Although, this pharmaceutical company plays a major role in New Jersey’s economy, Mr. Grewal represents a new front in the battle against opioids. Mr. Grewal states that he is not shying away from holding Janssen accountable even though they are one of the state’s largest employers. Even though Janssen sold their rights to the drugs in 2015, the state attorney general’s office is focusing on the eight-year period that the company marketed the drug. The lawsuit has also brought to light disturbing trends in the prescription. According to one patient on a state health care plan, they received 125 prescriptions for opioids over the course of a year. This lawsuit is fighting against the misinformation and marketing put out by these pharmaceutical companies saying that these drugs do not cause addiction or dependence and do not lead to abuse. New Jersey is fighting to stop the reality in which tons of people die using the drugs as directed.

I agree with Mr. Grewal and his lawsuit against the subsidiary of Johnson & Johnson, Janssen Pharmaceuticals. The opioid crisis has increased at an alarming speed and the death toll from this epidemic rises every year. Without legal action being taken against the pharmaceutical companies that violate the law and misinform the public, the epidemic will continue to rise until the effects are detrimental. The federal government has not been making any major moves to regulate the practices of pharmaceutical companies and hold them accountable for their actions. State legislatures have taken this issue into their own hands and decided to create stricter regulations and issue lawsuits against the companies who are at fault for this rising crisis. I believe this epidemic can be decreased significantly if the pharmaceutical companies are forced to take responsibility for their misleading marketing campaigns and the misinformation they provided to the public. Especially in their own backyard, New Jersey companies should support and protect their community and ethically build up their economy.

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

Link to Article: https://www.nytimes.com/2018/11/13/nyregion/nj-opioid-lawsuit.html?rref=collection%2Ftimestopic%2FLiability%20For%20Products&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection

Posted by Natalia Serrano.

In a recent blog post done by attorney Arina Shulga at Mitchell Silberberg & Knupp LLP., there has been conversation about what is happening to a certain Digital Tokens Exchange company since they have not been officially registered. The U.S. Securities and Exchange Commission is an independent agency of the United States Government. Its purpose is to protect investors from dangerous or illegal financial practices. Recently, the SEC, “published an order announcing a settlement of charges it brought against Zachary Coburn, the founder of EtherDelta, a digital token trading platform.” This is what was stated in Shulga’s blog post on November 8^th, 2018. This is all because the platform has failed to register their tokens and has not been abiding by the federal laws. 

“EtherDelta is a decentralized trading platform that lets you trade Ether and Ethereum-based tokens directly with other users. You are responsible for your own account, funds, and private keys. EtherDelta makes no guarantee about the tokens that you trade using EtherDelta.” A decentralized exchange is a cryptocurrency which operates without a central authority. This simply means that it works independently without requiring any validation from an external third party. This is a peer-to-peer network technology. Because of all these technical terms, Coburn did not formally register his platform and is now getting fined for not doing so. The SEC is trying to send out a clear message to all its cryptocurrency participants. Just because you claim your platform to be decentralized, does not mean that you are not to obey the laws. 

Coburns platform has been advised once before that it needed to start obeying the federal laws but continued to do things his way. In the article, Shulga explains that many of her clients claimed that their contemplated crypto exchanges did not need to register due to their decentralized nature. In section 5 of the SEC it explains what an exchange entail. It states that an exchange is “any organization, association, or group of persons, whether incorporated or unincorporated, which provides a market place or facilities for bringing together purchasers and sellers of securities.” If the company that one owns can be measured through this description it must abide by the SEC laws. “The SEC found that “EtherDelta operated as a market place for bringing together the orders of multiple buyers and sellers in tokens that included securities” without registration or exemption, regardless of its decentralized nature.” 

http://www.businesslawpost.com/

Natalia is a finance and information technology major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Huangan Pan.Earlier this year, McKinsey & Company, a famous consulting firm, was accused because of its misdeeds in a previous bankruptcy case, which has increased the probability of which the judge could order McKinsey & Company to return tens of millions of dollars in fees. This accusation was raised by the bankruptcy case of SunEdison. In 2016, SunEdison filed for bankruptcy protection in United States Bankruptcy Court in Manhattan and employed McKinsey & Company as a bankruptcy consultant. However, FTI Consulting, an outside company that hired by the board of SunEdison, claimed that the managers of SunEdison were misstating cash flows, and described an email about how McKinsey was going to be paid between a McKinsey consultant and a SunEdison executive. Finally, an agreement will arrange these unpaid bills to four solar-energy projects that SunEdison set up for other customers instead of billing them from SunEdison itself. Jay Alix, a creditor of SunEdison, declared that “McKinsey had used the four projects whose financing was separate from that of SunEdison and would not be affected by the bankruptcy to remove any risk of the court finding out that McKinsey pulled money out of the company just before it went bankrupt” (Walsh 5).

In this case, McKinsey had not disclosed sufficient information about its relationship between SunEdison while acting as a creditor. At the same time, as a consulting company that was hired by SunEdison, they can easily reach an internal agreement with SunEdison in order to transfer the risk of bankruptcy because they can more easily access SunEdison’s internal business information and decision-making information than any other creditor. In response to this accusation, a spokeswoman for McKinsey said that “The firm had always conducted itself in compliance with the law. Mr. Alix was motivated by a desire to undercut its ability to compete with AlixPartners” (Walsh 9).

In my opinion, what McKinsey’s spokeswoman said seems reasonable. However, The Wall Street Journal’s survey found that McKinsey disclosed far fewer potential conflicts of benefit than other bankruptcy professionals. Hence, McKinsey still needs to give a sufficient disclosure in any case to compliance the bankruptcy law. In this case, McKinsey tries to shift its risk to another four solar-energy projects which were set by SunEdison. This kind of action obviously have violated the bankruptcy codes and undermined the rights of other creditors. “To make sure no one tries to remove assets before the court takes control, the bankruptcy code calls for a review of transactions within 90 days — and sometimes longer — of when the company files for bankruptcy” (Walsh 11). This means the court can order McKinsey to return consulting fees that SunEdison have paid and then, SunEdison needs to repay all creditors according to the priority of their claims. `

Huangan is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2020.

Works Cited:

Corrigan, Tom. “Justice Department Chides McKinsey in Another Bankruptcy Case.” The Wall Street Journal, Dow Jones & Company, 15 Dec. 2018, www.wsj.com/articles/justice-department-chides-mckinsey-in-another-bankruptcy-case-11544901946.

Walsh, Mary Williams. “McKinsey & Company Is Again Accused of Misdeeds in Bankruptcy Case.” The New York Times, The New York Times, 23 Jan. 2019, www.nytimes.com/2019/01/22/business/mckinsey-bankruptcy-sunedison.htmlhttp://www.nytimes.com/2019/01/22/business/mckinsey-bankruptcy-sunedison.html.

Note
Article’s link: https://www.nytimes.com/2019/01/22/business/mckinsey-bankruptcy-sunedison.html

Posted by Christopher Saker.

Who would of thought after all these years college players are being closer to being paid than ever. Lawsuit has conferences quietly preparing for the likelihood of compensating players. Four years after she presided over the trial for Ed O’Bannon v. NCAA, U.S. District Judge Claudia Wilken is about to preside over a second college sports trial that could be a game-changer. On Tuesday, a trial for a lawsuit led by former West Virginia running back Shawne Alston and former Cal center Justine Hartman will begin in an Oakland federal courthouse. Alston and Hartman are co-lead plaintiffs in In Re: NCAA Grant-in-Aid Cap Antitrust Litigation v. NCAA, a class action brought on behalf of former men’s and women’s college players against the NCAA and the 11 major athletic conferences.

Once again, the NCAA will need to defend the unusual economics of big-time college sports from legal rebuke—and once again the 69-year-old judge will decide how to shape the relationship between universities and the student-athletes who bring them notoriety and revenue. A judge in the ongoing Alston vs. NCAA trial will conduct a final hearing on Dec. 18 pertaining to closing arguments. She will then decide — likely early in 2019 — whether scholarship limits imposed by the association violate anti-trust laws. Fearing what would amount to an open marketplace, a handful of conferences have notified officials within their leagues not to discuss the case outside their conferences for fear of collusion accusations. If conferences shared information on how to compensate athletes, that in itself could be interpreted as a way to cap scholarship benefits. That fear of collusion is based in part on rival league administrators even speaking casually about the outcome of the case. Example: “If the plaintiffs win, as expected, the SEC could theoretically compensate athletes with cars. Meanwhile, another league could offer … better cars or apartments or …”

If conferences took over, they would most likely have to establish their own enforcement staffs. At that point, the question would have to be asked: Why is there an NCAA at all? The NCAA argues that $4,000 is available to each family of a Final Four participant to travel to the games. Bowl gifts (capped at $550 per player) seemingly are a reward for playing football. The NCAA has argued that “pay for GPA” – grade point average incentives conferences could adopt — would establish “perverse incentives” forcing athletes to take easier classes. It should be noted that coaches regularly get contract bonuses for reaching a benchmark team GPAs. Also, in many instances, players already are encouraged to take classes that don’t interfere with their sport. This will be a very long process as both sides continue to battle this issue and will be something to keep an eye on.

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

Dodd, Dennis. “Lawsuit Has Conferences Quietly Preparing for the Likelihood of Compensating Players.” CBSSports.com, CBS Sports, 12 Dec. 2018, http:// www.cbssports.com/college-football/news/lawsuit-has-conferences-quietly-preparing-for-the-likelihood-of-compensating-players/.

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.

http://www.ponzitracker.com/

Posted by Milan Rana.

Finally, SEC’s one of the biggest insider trading case reached a settlement on May 18, 2017. This case is no different than other wall street insider trading cases. However, the important thing to note here is unlike other hedge fund managers, Mr. Cooperman did not plead guilty to the charges against him. In an interview with CNBC he said, he would have won the case had it gone forward. Fortunately, he learned from his lawyers that settling the case would cost him far less than dragging it a long way, even though he knew he would have won regardless. Upon reading the details of the case, we realize that the defense seemed to be weak and hard to prove. Yet, it is surprising that how court let him go with a penalty of couple million dollars. On September 21, 2016, the SEC charged hedge fund manager Leon Cooperman and his firm Omega Advisors with insider trading based on the nonpublic information received and used by Mr. Cooperman.  The SEC alleged that in 2010 Mr. Cooperman generated significantly large profits by trading securities of APL (Atlas Pipeline Partners L.P.) based on the information that he received from the APL senior executives. The Venue for this case was carefully selected as the violations of the securities occurred in the Eastern District of Pennsylvania.

After spending 23 and a half years at Goldman Sachs, with last 1 and a half year serving as a Chief Investment Officer, he decided to move on and start his own hedge fund company. He had learned and practiced many client building and maintaining tactics while working at Goldman Sachs. One of the powerful strategies of Cooperman was to accumulate large positions in the publicly traded companies and develop close relations with the company executives. By December 2009, Cooperman held over 9 percent shares APL, valued at approximately $46 Million. As a result of this, he developed such close relationships with company executives that led him access to various information that other smaller shareholders had no access to. On July 7, 2010, Cooperman learned from one of the APL executives that APL was negotiating the sale of Elk City(One of the APL’S largest pipeline plant) for approximately $650 million. He knew that if the deal goes through, APL stock prices would rise significantly.

According to the SEC report filed with the court, Cooperman promised the executive to keep the information secret and would not use it to trade the securities. However, he did not abide by the promise and that same day he started buying APL securities. He bought every security he could – Stocks, Bonds, Call Options. The report also states that until July 7, 2010, there was not a single day on which Cooperman’s Offshore Account, Hedge Fund Accounts, Managed Accounts and Family Accounts traded in APL securities. However, between July 7 – July 28, 2010, Cooperman and his accounts had purchased 343,600 Stocks, 4,500,000 Bonds and 6,781 Call options of APL. On July 27, 2010, Cooperman spoke to one of the executives again and confirmed the sale for $680 Million. Mr. Cooperman allegedly collectively generated $4.09 Million by trading in APL securities. The report also states that in breach of a duty of trust or confidence, Cooperman and Omega knowingly or recklessly traded APL securities on the basis, and while in possession of material nonpublic information related to APL’ s Elk City sale that Cooperman obtained from APL Executive.

According to the article titled “The SEC’s Biggest Insider Trading Case Is Heating Up” in Fortune magazine, stated that in his one of the television appearance Cooperman uttered the words, “These charges are total without merit.” This case has largely impacted his reputation as a hedge fund manager. Two years ago, his firm Omega had $10.4 Billion in assets, which slid to $3.4 Billion now. Moreover, he had also decided that if the case would drag long enough, he would consider closing the business. After all it’s all about the hard-earned respect and reputation he has earned being in this industry.

A Forbes article titled “Hedge Fund Billionaire Leon Cooperman Settles With SEC On Insider Trading Charges.” States that SEC had offered Cooperman the opportunity to settle the case agreeing to five-year industry ban. He instead chose to contest the charges in order to keep his reputation intact. Months after when the case was set for trial, the court approved the settlement of $4.9 Million in fines and penalties and agree to have an independent compliance monitor at his funds. The SEC has also provided the phone conversation of Mr. Cooperman and Executives in their report. Also looking at the transactions that Mr. Cooperman and his firms made, it clearly shows that he has received some kind of tip that he suddenly started buying APL securities. Yet, it is very hard to believe that he got off the hook without pleading guilty, with a smaller fine than expected, and still in business. 

Milan is a graduate student in the Feliciano School of Business, Montclair State University.

Bibliography

Celarier, Michelle. “The SEC’s Biggest Insider Trading Case Is Heating Up.” Fortune Finance. Fortune, 18 Jan. 2017. Web.

Gara, Antoine. “Hedge Fund Billionaire Leon Cooperman Settles With SEC On Insider Trading Charges.” Forbes. Forbes Magazine, 19 May 2017. Web.

SEC VS LEON G. COOPERMAN. No. 2:16-cv-05043-JS. The Eastern District of Pennsylvania. 20 Mar. 2017. Web.

The regulatory process and its role in the legal system is a fundamental concept in business law. Federal, state and local governments received the authority to regulate activities from Article 1 Section 8 of the U.S. Constitution. Article 1 Section 8 also referred to as the Commerce Clause or Necessary and Proper Clause dictates the enumerated powers of Congress in professional and private settings.

The regulatory process is performed by administrative agencies. Some commonly recognized administrative agencies are the Central Intelligence Agency (CIA), the Environmental Protection Agency (EPA), and the Food and Drug Administration (FDA). The recent GlaxoSmithKline bribery scandal focused on the Securities and Exchange Commission (SEC) administrative agency. The mission of the SEC is to “protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.” (Securities Exchange Commission)

The SEC recently alleged that GlaxoSmithKline’s Chinese subsidiary had engaged in bribery activity for four years, 2010 to 2013. The SEC accused GlaxoSmithKline subsidiary of violating the Foreign Corrupt Practices Act. According to the SEC, GlaxoSmithKline’s subsidiary had been providing foreign officials and health-care professionals with gifts incongruous to the law. These gifts included shopping trips, cash, travel, entertainment, etc. for the purpose of boosting sales. Further, the SEC suspected that GlaxoSmithKline’s subsidiary deceptively recorded these payments as expenses. The bribery scandal investigation eventually captured the attention of a second agency, the U.S. Department of Justice.

GlaxoSmithKline has not admitted nor denied these bribery charges, but has agreed to pay $20 million to settle the matter. Nonetheless, this is not GlaxoSmithKline’s first bribery settlement. In 2014, the company paid $491.5 million and several managers were convicted with charges and suspended imprisonment for a similar matter. Since the 2014 bribery controversy, GlaxoSmithKline stated it “installed several reforms, including shifts to the compensation of sales representatives and the end of payments to health-care practitioners for advocating for Glaxo products to other prescribers.” (Minaya)

My opinion on the matter is that GlaxoSmithKline was rightfully accused by the SEC and DOJ, specifically for violating the Foreign Corrupt Practices Act. The Act has a firm anti-bribery provision that GlaxoSmithKline and its Chinese subsidiary had a legal and ethical responsibility to follow. The fact that GlaxoSmithKline and its subsidiary’s records were not a true representation of its payments is a clear piece of evidence suspecting its violation. In addition, having read the SEC order and learned that GlaxoSmithKline had engaged in this activity before, I believe that the company and the subsidiary did participate in bribery.

Melissa is a marketing major with dual minors in public relations and legal studies at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Lindsey Pena.

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

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

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

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

Posted by 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 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 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 Giancarlo Barrera.

Goldman Sachs was infamously named “The Wolf of Wall Street.”   Goldman created, convinced, and sold mortgage investments that had been designed to fail in the first place.corruption at its finest.  It was corruption at its finest.  Goldman even went as far as betting against the same derivatives it was promoting and selling to their own clientele.  Goldman accepted that it misled investors the wrong way, but did not admit to any scheming or wrongdoing.

In July 2010, Goldman paid an enormous SEC fine of 550 milion dollars.  It was one fine after another.  Then in April 2012, Goldman paid a fine of 22 million dollars for allowing insider trading of non-public information to Goldman’s clients and traders since 2007.  On the link, the story goes into further detail of how much fraud and dishonesty was played under the table and behind the backs of its own clients, who the company was supposed to help invest their money in the first place.

Business is business.

Giancarlo is an economics and finance major at Montclair State University, Class of 2016.

Posted by Wenxuan Yu. The minimum wage for workers must be guaranteed, which is the basis for social stability. Yet many social workers have unimaginably low basic salaries. Julio Payes from Guatemala has two jobs. He works 80 hours a week. He had to work sixteen hours a day, seven days a week, to pay for basic living expenses, and he once said he felt like a zombie.

The federal minimum wage was first established by the fair labor act of 1938 (FLSA). The bill’s immediate goal is to reduce poverty. Minimum wage legislation is designed to maximize the total income of minimum wage workers and lift their families out of poverty. The FLSA is administered by the U.S. department of labor’s wage and hour division. Today, the act’s labor standards affect the rights of more than 130 million workers, both full-time and part-time, in the private and public sectors.

After that, the Emeryville city council began to reconsider the city’s minimum wage. Emeryville followed Oakland’s decision to raise the minimum wage to $12.25. The city’s minimum wage was eventually raised to about $16 an hour by 2019, thanks to labor marches and advocacy efforts. That’s equivalent to the highest minimum wage in the United States, and even higher than the minimum wage in major cities like San Francisco and Seattle.

And in 2016, the minimum wage for workplaces with fewer than 55 employees jumped to $13 an hour, up from $14 in 2017 and $15 in 2018.On July 1, wages for all businesses will hit $16 an hour.

This is good news for all workers. At the same time, the increase in the minimum wage also led to many other benign effects. Patients are less stressed, and in high-wage states they are better able to pay for their care. Higher wages have also made society safer, and rates of child abuse and teenage drinking have fallen. Therefore, the implementation of the correct minimum wage is conducive to the development of society.

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

Posted by Jidong Zhang.
The recent Nike incident caused a heated discussion among sneaker owners. Nike’s shoes are usually representative of comfort, durability, and high-tech integration. Most people have Nike brand sports shoes. Nike’s latest shoes, “Back to Future,” has been sold on the stockx for thousands of dollars because of the automatic lace-up feature. This time the defective shoes broke the stereotype of Nike, also let people think about the balance between the player’s right to health and business transactions.

As we all know, sports brand companies will provide sponsorship funds for famous universities. This will not only promote the development of the university’s sports career, but also bring benefits to the company. Players don’t need to buy shoes at full price, as long as they wear them for a few games. In this part of the agreement, the player seems to be wearing a sneaker for a game and then will get the shoes for free. In fact, when the players wear the sneakers, the game will be broadcast live or recorded, so that the sports brand company will be advertised. To a certain extent, an employment relationship exists between the player and the sports brand company. As the employee, the player should be guaranteed to be safe and healthy during the game, and the sports brand company should take on such responsibility, but these responsibilities are usually are ignored.

As for Williamson, in this incident, if he suffers from injuries due to defective shoes this will ultimately affect his career. Would Nike be responsible for him? For a player, good health is crucial. The university or the league organizations should fully consider the interests of the players when signing the equipment agreement with the sponsor. The law related to this case needs to be improved.

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

Work Cited:

http:// https://www.nytimes.com/2019/02/21/sports/zion-nike-shoe-ncaa.html?action=click&module=Top%20Stories&pgtype=Homepage

Posted by Simran Patel. Throughout the country, the opioid epidemic has seen a 10 percent rise and taken the lives of more than 72,000 people due to overdoses. New Jersey has filed a lawsuit against a subsidiary of Johnson & Johnson that manufactures opioids and wants them to be liable for their products. The pharmaceutical company has been accused of misleading patients about the addictive dangers of the drugs. New Jersey Attorney General, Gurbir Grewal, is trying to contain this spiraling opioid crisis by bringing legal action against the subsidiary, Janssen Pharmaceuticals. Mr. Grewal states that this company minimized the risks of opioid addiction in their marketing messages and targeted patients and older people who had little to no knowledge of opioids. New Jersey is known for its pharmaceutical industry and has a long history of producing vital, lifesaving drugs. Therefore, Mr. Grewal has said that they cannot turn a blind eye to the violation of laws and lives that are being threatened by companies like Janssen Pharmaceutical.

Eleven states, including New Jersey, have filed separate lawsuits against the manufacturer, Purdue Pharma, of the popular opioid painkiller OxyContin. More than 40 state attorney generals have joined New York state in an investigation of manufacturers and distributors of opioids. The federal government has not been effective in regulating the practices of pharmaceutical companies, so the opioid crisis has become a state issue. Although, this pharmaceutical company plays a major role in New Jersey’s economy, Mr. Grewal represents a new front in the battle against opioids. Mr. Grewal states that he is not shying away from holding Janssen accountable even though they are one of the state’s largest employers. Even though Janssen sold their rights to the drugs in 2015, the state attorney general’s office is focusing on the eight-year period that the company marketed the drug. The lawsuit has also brought to light disturbing trends in the prescription. According to one patient on a state health care plan, they received 125 prescriptions for opioids over the course of a year. This lawsuit is fighting against the misinformation and marketing put out by these pharmaceutical companies saying that these drugs do not cause addiction or dependence and do not lead to abuse. New Jersey is fighting to stop the reality in which tons of people die using the drugs as directed.

I agree with Mr. Grewal and his lawsuit against the subsidiary of Johnson & Johnson, Janssen Pharmaceuticals. The opioid crisis has increased at an alarming speed and the death toll from this epidemic rises every year. Without legal action being taken against the pharmaceutical companies that violate the law and misinform the public, the epidemic will continue to rise until the effects are detrimental. The federal government has not been making any major moves to regulate the practices of pharmaceutical companies and hold them accountable for their actions. State legislatures have taken this issue into their own hands and decided to create stricter regulations and issue lawsuits against the companies who are at fault for this rising crisis. I believe this epidemic can be decreased significantly if the pharmaceutical companies are forced to take responsibility for their misleading marketing campaigns and the misinformation they provided to the public. Especially in their own backyard, New Jersey companies should support and protect their community and ethically build up their economy.

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

Link to Article: https://www.nytimes.com/2018/11/13/nyregion/nj-opioid-lawsuit.html?rref=collection%2Ftimestopic%2FLiability%20For%20Products&action=click&contentCollection=timestopics&region=stream&module=stream_unit&version=latest&contentPlacement=1&pgtype=collection

Posted by Natalia Serrano.

In a recent blog post done by attorney Arina Shulga at Mitchell Silberberg & Knupp LLP., there has been conversation about what is happening to a certain Digital Tokens Exchange company since they have not been officially registered. The U.S. Securities and Exchange Commission is an independent agency of the United States Government. Its purpose is to protect investors from dangerous or illegal financial practices. Recently, the SEC, “published an order announcing a settlement of charges it brought against Zachary Coburn, the founder of EtherDelta, a digital token trading platform.” This is what was stated in Shulga’s blog post on November 8^th, 2018. This is all because the platform has failed to register their tokens and has not been abiding by the federal laws. 

“EtherDelta is a decentralized trading platform that lets you trade Ether and Ethereum-based tokens directly with other users. You are responsible for your own account, funds, and private keys. EtherDelta makes no guarantee about the tokens that you trade using EtherDelta.” A decentralized exchange is a cryptocurrency which operates without a central authority. This simply means that it works independently without requiring any validation from an external third party. This is a peer-to-peer network technology. Because of all these technical terms, Coburn did not formally register his platform and is now getting fined for not doing so. The SEC is trying to send out a clear message to all its cryptocurrency participants. Just because you claim your platform to be decentralized, does not mean that you are not to obey the laws. 

Coburns platform has been advised once before that it needed to start obeying the federal laws but continued to do things his way. In the article, Shulga explains that many of her clients claimed that their contemplated crypto exchanges did not need to register due to their decentralized nature. In section 5 of the SEC it explains what an exchange entail. It states that an exchange is “any organization, association, or group of persons, whether incorporated or unincorporated, which provides a market place or facilities for bringing together purchasers and sellers of securities.” If the company that one owns can be measured through this description it must abide by the SEC laws. “The SEC found that “EtherDelta operated as a market place for bringing together the orders of multiple buyers and sellers in tokens that included securities” without registration or exemption, regardless of its decentralized nature.” 

http://www.businesslawpost.com/

Natalia is a finance and information technology major at the Stillman School of Business, Seton Hall University, Class of 2020.

Posted by Huangan Pan.Earlier this year, McKinsey & Company, a famous consulting firm, was accused because of its misdeeds in a previous bankruptcy case, which has increased the probability of which the judge could order McKinsey & Company to return tens of millions of dollars in fees. This accusation was raised by the bankruptcy case of SunEdison. In 2016, SunEdison filed for bankruptcy protection in United States Bankruptcy Court in Manhattan and employed McKinsey & Company as a bankruptcy consultant. However, FTI Consulting, an outside company that hired by the board of SunEdison, claimed that the managers of SunEdison were misstating cash flows, and described an email about how McKinsey was going to be paid between a McKinsey consultant and a SunEdison executive. Finally, an agreement will arrange these unpaid bills to four solar-energy projects that SunEdison set up for other customers instead of billing them from SunEdison itself. Jay Alix, a creditor of SunEdison, declared that “McKinsey had used the four projects whose financing was separate from that of SunEdison and would not be affected by the bankruptcy to remove any risk of the court finding out that McKinsey pulled money out of the company just before it went bankrupt” (Walsh 5).

In this case, McKinsey had not disclosed sufficient information about its relationship between SunEdison while acting as a creditor. At the same time, as a consulting company that was hired by SunEdison, they can easily reach an internal agreement with SunEdison in order to transfer the risk of bankruptcy because they can more easily access SunEdison’s internal business information and decision-making information than any other creditor. In response to this accusation, a spokeswoman for McKinsey said that “The firm had always conducted itself in compliance with the law. Mr. Alix was motivated by a desire to undercut its ability to compete with AlixPartners” (Walsh 9).

In my opinion, what McKinsey’s spokeswoman said seems reasonable. However, The Wall Street Journal’s survey found that McKinsey disclosed far fewer potential conflicts of benefit than other bankruptcy professionals. Hence, McKinsey still needs to give a sufficient disclosure in any case to compliance the bankruptcy law. In this case, McKinsey tries to shift its risk to another four solar-energy projects which were set by SunEdison. This kind of action obviously have violated the bankruptcy codes and undermined the rights of other creditors. “To make sure no one tries to remove assets before the court takes control, the bankruptcy code calls for a review of transactions within 90 days — and sometimes longer — of when the company files for bankruptcy” (Walsh 11). This means the court can order McKinsey to return consulting fees that SunEdison have paid and then, SunEdison needs to repay all creditors according to the priority of their claims. `

Huangan is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2020.

Works Cited:

Corrigan, Tom. “Justice Department Chides McKinsey in Another Bankruptcy Case.” The Wall Street Journal, Dow Jones & Company, 15 Dec. 2018, www.wsj.com/articles/justice-department-chides-mckinsey-in-another-bankruptcy-case-11544901946.

Walsh, Mary Williams. “McKinsey & Company Is Again Accused of Misdeeds in Bankruptcy Case.” The New York Times, The New York Times, 23 Jan. 2019, www.nytimes.com/2019/01/22/business/mckinsey-bankruptcy-sunedison.htmlhttp://www.nytimes.com/2019/01/22/business/mckinsey-bankruptcy-sunedison.html.

Note
Article’s link: https://www.nytimes.com/2019/01/22/business/mckinsey-bankruptcy-sunedison.html

Posted by Christopher Saker.

Who would of thought after all these years college players are being closer to being paid than ever. Lawsuit has conferences quietly preparing for the likelihood of compensating players. Four years after she presided over the trial for Ed O’Bannon v. NCAA, U.S. District Judge Claudia Wilken is about to preside over a second college sports trial that could be a game-changer. On Tuesday, a trial for a lawsuit led by former West Virginia running back Shawne Alston and former Cal center Justine Hartman will begin in an Oakland federal courthouse. Alston and Hartman are co-lead plaintiffs in In Re: NCAA Grant-in-Aid Cap Antitrust Litigation v. NCAA, a class action brought on behalf of former men’s and women’s college players against the NCAA and the 11 major athletic conferences.

Once again, the NCAA will need to defend the unusual economics of big-time college sports from legal rebuke—and once again the 69-year-old judge will decide how to shape the relationship between universities and the student-athletes who bring them notoriety and revenue. A judge in the ongoing Alston vs. NCAA trial will conduct a final hearing on Dec. 18 pertaining to closing arguments. She will then decide — likely early in 2019 — whether scholarship limits imposed by the association violate anti-trust laws. Fearing what would amount to an open marketplace, a handful of conferences have notified officials within their leagues not to discuss the case outside their conferences for fear of collusion accusations. If conferences shared information on how to compensate athletes, that in itself could be interpreted as a way to cap scholarship benefits. That fear of collusion is based in part on rival league administrators even speaking casually about the outcome of the case. Example: “If the plaintiffs win, as expected, the SEC could theoretically compensate athletes with cars. Meanwhile, another league could offer … better cars or apartments or …”

If conferences took over, they would most likely have to establish their own enforcement staffs. At that point, the question would have to be asked: Why is there an NCAA at all? The NCAA argues that $4,000 is available to each family of a Final Four participant to travel to the games. Bowl gifts (capped at $550 per player) seemingly are a reward for playing football. The NCAA has argued that “pay for GPA” – grade point average incentives conferences could adopt — would establish “perverse incentives” forcing athletes to take easier classes. It should be noted that coaches regularly get contract bonuses for reaching a benchmark team GPAs. Also, in many instances, players already are encouraged to take classes that don’t interfere with their sport. This will be a very long process as both sides continue to battle this issue and will be something to keep an eye on.

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

Dodd, Dennis. “Lawsuit Has Conferences Quietly Preparing for the Likelihood of Compensating Players.” CBSSports.com, CBS Sports, 12 Dec. 2018, http:// www.cbssports.com/college-football/news/lawsuit-has-conferences-quietly-preparing-for-the-likelihood-of-compensating-players/.

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.

http://www.ponzitracker.com/

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 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 Chase Mulligan. 

On October 21, 2016 a coordinated distributed denial-of-service attack (DDoS) was made on internet systems operated by Domain Name Systems (DNS) provider Dyn resulting in massive disruption of internet services across the United States and Europe. Internet services along most of the east coast, west coast, and southern parts of the country were affected. The cyber-attack has been called an “historic attack”; (flashcritic.com) the first robot-based digital assault using the Internet of Things that linked millions of on-line devices in a coordinated operation. This tactic uses a novel approach of manipulating electronic devices connected to the Internet of Things for the attack capitalizing on the weak security of these devices and raising the question of responsibility and liability.

Anonymous and New World Hackers using recently released malicious software (malware) called Mirai, created a robot network for the attack. The significant aspect of the attack is the use of the Mirai botnet code to take control of devices that are used on what is called the Internet of Things. These devices are electronic devices not directly connect to computers but are connected through the internet and include such items as webcams, smart TV’s, routers, security cameras, DVRs, and similar devices. By using these electronic devices the hackers were able to take control of a virtual army of attackers. While the multiple attack across multiple directions is considered sophisticated, the actual use of the electronic devices is considered uncomplicated. Many of the compromised electronic devices are used by homes or small business and often lack security capabilities or contain elementary security that is easily compromised. The hackers had little difficulty installing the Mirai malware and taking control of the devices when needed for the attack.

Security organizations are taking measures to identify the comprised devises and developing ways to combat the Mirai command and control system. However, the cost and potential liability for placing unsecured or poorly security protected electronic devices on the Internet of Things is a looming question. If someone or a company experiences a significant loss of money, compromise of data, or destruction of assets; who is liable? Surely the hackers, but are the companies that market poorly or non-secure smart electronic devices; is the person or concern that uses the devices responsible, jointly or wholly? An area of Cyber-law is now in the making.

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

Posted by Chase Mulligan.

On October 21, 2016 a coordinated distributed denial-of-service attack (DDoS) was made on internet systems operated by Domain Name Systems (DNS) provider Dyn resulting in massive disruption of internet services across the United States and Europe. Internet services along most of the east coast, west coast, and southern parts of the country were affected. The cyber-attack has been called an “historic attack”; (flashcritic.com) the first robot-based digital assault using the Internet of Things that linked millions of on-line devices in a coordinated operation. This tactic uses a novel approach of manipulating electronic devices connected to the Internet of Things for the attack capitalizing on the weak security of these devices and raising the question of responsibility and liability.

Anonymous and New World Hackers using recently released malicious software (malware) called Mirai, created a robot network for the attack. The significant aspect of the attack is the use of the Mirai botnet code to take control of devices that are used on what is called the Internet of Things. These devices are electronic devices not directly connect to computers but are connected through the internet and include such items as webcams, smart TV’s, routers, security cameras, DVRs, and similar devices. By using these electronic devices the hackers were able to take control of a virtual army of attackers. While the multiple attack across multiple directions is considered sophisticated, the actual use of the electronic devices is considered uncomplicated. Many of the compromised electronic devices are used by homes or small business and often lack security capabilities or contain elementary security that is easily compromised. The hackers had little difficulty installing the Mirai malware and taking control of the devices when needed for the attack.

Security organizations are taking measures to identify the comprised devises and developing ways to combat the Mirai command and control system. However, the cost and potential liability for placing unsecured or poorly security protected electronic devices on the Internet of Things is a looming question. If someone or a company experiences a significant loss of money, compromise of data, or destruction of assets; who is liable? Surely the hackers, but are the companies that market poorly or non-secure smart electronic devices; is the person or concern that uses the devices responsible, jointly or wholly? An area of Cyber-law is now in the making.

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

Posted by Cullen Dana.

Timothy Livingston, a business owner of Whole Lot of Nothing LLC, pleaded guilty to “hijacking customer’s email accounts to send unsolicited ‘spam’ messages.” He also admitted he and his fellow employee, who pleaded guilty along with another employee after Livingston did, created a “software that appropriated a corporate website belonging to a New York-based technology company in order to use its servers to send spam that appeared to be from the company.”

The man generated, according to his prosecutors, “$1.3 million and property” from his hacking scandal. Livingston entered “his plea in federal court in Newark, New Jersey to three counts” one being “conspiracy to commit fraud and related activity in connection with computers and access devices.”

Livingston agreed to give up $1.35 million as well as the property he gained from the scandal. He is scheduled to be “sentenced January 27, 2017.”

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