Posted by Alex Law.

A lawsuit had been filed on Wednesday, February 14th, against the New York and Atlantic Railway Company for the unfair treatment of 18 railway workers. According to one of the railway workers, Mario Pesantez, the railway company has denied the workers safety equipment, as well as withholding proper training. Furthermore, Pesantez claims that he was told to attend his work station by climbing over a chain-link fence by his employers. On the account of unfair treatment and low wages for vigorous labor, railway laborers have decided to take matters into their own hands by confronting the company in the State Supreme Court in Manhattan.

The New York and Atlantic Company tries to undermine the lawsuit by stating: “These allegations are baseless and without merit. The individuals making these employment claims were never N.Y.A.R employees, and as such, their claims are directed at the wrong party.” However, Kristina Mazzocchi, a lawyer for the railway workers, strongly disagrees with what the company asserted. According to Mazzocchi, the railway workers have “worked full time and were paid weekly, in cash.” In other words, these workers are official employees of the company  that have been mistreated for years as they were subjected to dangerous tasks while being under paid. An example of a task that were completed under dangerous circumstances was for Franklin Lopez, a railway worker, to “squeeze beneath derailed cars” in order to put the derailed cars back onto the track. In other words, Lopez had to complete his task fearing the possibility that he would be crushed to death.

According to the article, it seems that New York and Atlantic Company had experienced criticisms in the past in regards to their safety regulation and the treatment of workers. Specifically, the company has neglected to properly train the workers in using particular equipment for completing their tasks. It is also important to recognize that these workers had watched YouTube videos in order to learn how to perform different undertakings. Additionally, the labor workers faced discrimination when the article states: “Those workers, the suit added, were given a segregated and substandard changing area, subjected to racial slurs.” Based on these accounts, it is ultimately unacceptable for the railway company to under-pay their workers based on the notion that the workers had to face such circumstances. With that said, there is a major indication that the New York and Atlantic Company suffer from a flaw in their safety regulation.

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

Source:

Article Link: https://www.nytimes.com/2018/02/14/nyregion/railway-workers-lawsuit-discrimination.html

Posted by Kristina Volta.

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

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

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

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

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

Sources:

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

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

Posted by 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 Chenglu Xia.

In his article, “Bitcoin Will Be Taxed as an Asset: Israel Tax Authority,” Samburaj Das states that Israel government will have a new regulation on cryptocurrency. The official tax authority is making a change, transferring bitcoin’s role from the cryptocurrency to an asset. However, Israel’s official authority is not the only one that regards bitcoin as an asset. The IRS also did the same thing; it admits the importance of bitcoins, but the precondition is that bitcoins should play a role of asset rather than cryptocurrency and should be taxed proportionately. I believe this change can make bitcoins market legal, which will also benefit the worldwide economy. If any transaction of bitcoins will be taxed, it will lead to stronger and more sustainable economic growth without some illegal transactions.

Nowadays, bitcoin is the most popular cryptocurrency around the world. It has two main characteristics. Primarily, it’s a kind of digital currency rather than fiat currency, such as USD. Moreover, it’s decentralized which use a process called mining. This process use advanced technology with some complex mathematic formulas to produce specific codes. At the beginning, most investors prefer to use this kind cryptocurrency to avoid taxation.  Meanwhile, they can exchange bitcoins with fiat currency, also goods and services; and, it is difficult to track those transactions, which encourages the black market to use this cryptocurrency to carry on illegal transactions.

However, I’m considering about bitcoins’ credibility. There is no guaranteed operating organization. Bitcoin is just a virtual currency and there is no regulation when it first appeared on the Internet. I am wondering why there is an increasing number of people using this currency. In China, I heard that most people just buy bitcoins for investment. It is the similar situation with the investment in stocks, which means that most people do not regard bitcoins as a currency. They only invest in it because of high profits, although it comes with high risk. Personally, I believe that there are some organizations which use bitcoins to do illegal transactions, making high profit. Thus, bitcoin becomes a tool used for illegal purposes, which attracts the attention of national legislature. Thus, it’s profound, meaningful and effective to make the decision of taxing transactions of bitcoins.

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

Sources:

https://www.ccn.com/bitcoin-will-see-taxation-asset-not-currency-israel-authority/

https://www.investopedia.com/articles/investing/040515/are-there-taxes-bitcoins.asp

Posted by Alex Law.

A lawsuit had been filed on Wednesday, February 14th, against the New York and Atlantic Railway Company for the unfair treatment of 18 railway workers. According to one of the railway workers, Mario Pesantez, the railway company has denied the workers safety equipment, as well as withholding proper training. Furthermore, Pesantez claims that he was told to attend his work station by climbing over a chain-link fence by his employers. On the account of unfair treatment and low wages for vigorous labor, railway laborers have decided to take matters into their own hands by confronting the company in the State Supreme Court in Manhattan.

The New York and Atlantic Company tries to undermine the lawsuit by stating: “These allegations are baseless and without merit. The individuals making these employment claims were never N.Y.A.R employees, and as such, their claims are directed at the wrong party.” However, Kristina Mazzocchi, a lawyer for the railway workers, strongly disagrees with what the company asserted. According to Mazzocchi, the railway workers have “worked full time and were paid weekly, in cash.” In other words, these workers are official employees of the company  that have been mistreated for years as they were subjected to dangerous tasks while being under paid. An example of a task that were completed under dangerous circumstances was for Franklin Lopez, a railway worker, to “squeeze beneath derailed cars” in order to put the derailed cars back onto the track. In other words, Lopez had to complete his task fearing the possibility that he would be crushed to death.

According to the article, it seems that New York and Atlantic Company had experienced criticisms in the past in regards to their safety regulation and the treatment of workers. Specifically, the company has neglected to properly train the workers in using particular equipment for completing their tasks. It is also important to recognize that these workers had watched YouTube videos in order to learn how to perform different undertakings. Additionally, the labor workers faced discrimination when the article states: “Those workers, the suit added, were given a segregated and substandard changing area, subjected to racial slurs.” Based on these accounts, it is ultimately unacceptable for the railway company to under-pay their workers based on the notion that the workers had to face such circumstances. With that said, there is a major indication that the New York and Atlantic Company suffer from a flaw in their safety regulation.

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

Source:

Article Link: https://www.nytimes.com/2018/02/14/nyregion/railway-workers-lawsuit-discrimination.html

Posted by Alexander D. Bakogiannis.

Earlier this year the SEC reported that a medical device company named Orthofix was being charged with improperly booking revenue and making improper payment to doctors and government owned hospitals in Brazil.

They improperly recorded revenues as soon as a product was shipped before securing payments. When a company makes revenues from its operations, it must be recorded in their ledgers and then reported on the income statements every reporting period. According to GAAP, there are two criteria the company must meet before it can record revenues. First there must be a critical event that triggered the transaction process, and the amount collected from that transaction is measurable within a certain degree of reliability.  These wrongdoings cost the company over $14 M to settle charges.

One specific instance involved Orthofix recording revenue even when they gave their customers significant extensions of time to make payment. A company can recognize revenue from a transaction when the buyer of the company’s good or service agrees to a purchase, and the amount that the customer is going to pay is determined. By giving their consumers all this time to make their payments, the payments are fully determined, thus all the revenues should not have been recorded yet. These accounting failures make the company misstate data on their financial statement from 2011 to 2013. “Their accounting failures were so widespread that it caused them to make false statements to the general public regarding their financial condition”.

Orthofix violated the FCPA (Foreign Corrupt Practices Act) when their associates in Brazil used high discounts and made improper payments through third parties to solicit doctors employed by the government to use their products; fake invoices were used to facilitate this. All of this could have been avoided or contained if Orthofix had the proper internal controls in place and to ensure that proper payments were being made on their behalf to the correct individuals, and the right data was being recorded at the times times. Unfortunately, this was not the case. As a result, their sales were inflated.

Alex is an MBA with concentration in Accounting, and a Forensic Accounting Certificate, Class of 2017.

Reference:

https://www.sec.gov/news/pressrelease/2017-18.html

Posted by Gurpreet Kaur.

CNN Money released an article on Well Fargo’s employees secretly withdrawing money from customers’ bank account and transferring to new accounts since 2011. The article was published on September 8th of this year and Wells Fargo bank was forced to fire 5,300 employees in Los Angles for setting up accounts for customers. This fraud was taking place without any of the customers’ knowledge. After this fraud, many customers were fumed because their bank accounts were unsafe. The employees’ fraud was unethical and illegal because they were creating credit card accounts without letting their customers know.

Brian Kennedy, a Maryland retiree, was one of the victims and he told CNN Money “he detected an unauthorized Wells Fargo account had been created in his name about a year ago. He asked Wells Fargo about it and the bank closed it.” Wells Fargo’s customers had trust in the bank. The victims of this fraud could have filed for refunds, but it wasn’t necessary because Wells Fargo agreed to refund 5 million dollars to them. The settlement in Los Angles required Wells Fargo to warn their California customers to shut down their unrecognized accounts. The fraud caused the bank to unemployed 5,300 workers over these five years.

Richard Cordray is the director of the Consumer Financial Protection Bureau and he said, “Wells Fargo employees secretly opened unauthorized accounts to hit sales targets and receive bonuses.”  Those employees transferred funds from customers’ accounts without their knowledge to new accounts they created. Customers were upset because they were facing overdraft fees and insufficient fees. Wells Fargo stated, “We regret and take responsibility for any instances where customers may have received a product that they did not request.” Wells Fargo’s market valuation was the highest in America, but the fraud led to lawsuits against Wells Fargo. In May 2015, “Feuer’s office sued Wells Fargo for authorizing accounts” and “after filing the suit, his office received more than 1,000 calls and emails from customers as well as current and former Wells Fargo employees about the allegations.”

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

Posted by Caroline Weeks.

On November 5, 2015 a dam in the Brazilian city of Mariana collapsed, resulting in multiple causalities and irreparable damage to the surrounding cities and ecosystems. In total, nineteen people lost their lives. The collapse also “released a torrent of sludge that washed away villages, displaced hundreds of people, and traveled more than four hundred miles through southeast Brazil’s Rio Doce basin before reaching the Atlantic Ocean.” It is said that this is “believed to be the biggest disaster of its kind anywhere.” The yearlong criminal investigation into the collapse recently ended and has resulted in homicide charges being filed against twenty one people in connection with the disaster. Some of the people charged are “current and former top executives of mining giants Vale SA and BHP Billiton Ltd., and Samarco Mineração SA.” In addition, employees of a consulting firm that performed checkups on the dam were charged with “presenting false stability reports.” This disaster is an example of companies being concerned solely with short run profit maximization and an inherent lack of corporate social responsibility.

The federal prosecutor in Brazil has stated that “the motivation of the homicides was the excessive greed of the companies.” It has been detailed that the victims were killed by the “violent passage of the tailings mud” and that they “had their bodies mutilated and…dispersed across an area of 110 kilometers.” These innocent employees died a cruel and painful death at the hands of corporate greed. Samarco focused on short run profit maximization and did not take into account the effects of their actions. The prosecutor says that there is evidence that Samarco, and its shareholders, were “aware of chronic structural problems” as early as April 2009. If this is true, the company knew about critical problems with the structure for more than 6 years and chose to continually ignore the warnings. The board not only failed to make the facility structurally sound, but responded to these structural issues by “pressuring the company to extract more iron ore.” If the company had simply taken head to these warnings they would’ve prevented the loss of innocent lives, the damage of surrounding communities, and incredibly expensive lawsuits along with a permanently tarnished reputation. These findings show the goal of the company was to maximize profits as quickly as possible. They did not take into account the repercussions of a dam collapse and innocent people paid the price for their greed.

This fatal event also details Samarco’s lack of corporate social responsibility. The company chose to focus on profits and purposely chose to ignore the issues with their facility. The company did not act ethically and they certainly did not take into account the surrounding communities. As a result of the dam collapse, families have lost their homes, and even entire communities have been washed away. Not only have these villages been destroyed, but so has the surrounding ecosystem. The river “is still tainted a rusty red form the sediment” that washed through the river basin after the dam collapsed. If the company had acted ethically, they could’ve saved lives and communities. This disaster is a prime example of executives acting carelessly in the hopes of inflating their bank accounts.

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

Posted by Alex Law.

A lawsuit had been filed on Wednesday, February 14th, against the New York and Atlantic Railway Company for the unfair treatment of 18 railway workers. According to one of the railway workers, Mario Pesantez, the railway company has denied the workers safety equipment, as well as withholding proper training. Furthermore, Pesantez claims that he was told to attend his work station by climbing over a chain-link fence by his employers. On the account of unfair treatment and low wages for vigorous labor, railway laborers have decided to take matters into their own hands by confronting the company in the State Supreme Court in Manhattan.

The New York and Atlantic Company tries to undermine the lawsuit by stating: “These allegations are baseless and without merit. The individuals making these employment claims were never N.Y.A.R employees, and as such, their claims are directed at the wrong party.” However, Kristina Mazzocchi, a lawyer for the railway workers, strongly disagrees with what the company asserted. According to Mazzocchi, the railway workers have “worked full time and were paid weekly, in cash.” In other words, these workers are official employees of the company  that have been mistreated for years as they were subjected to dangerous tasks while being under paid. An example of a task that were completed under dangerous circumstances was for Franklin Lopez, a railway worker, to “squeeze beneath derailed cars” in order to put the derailed cars back onto the track. In other words, Lopez had to complete his task fearing the possibility that he would be crushed to death.

According to the article, it seems that New York and Atlantic Company had experienced criticisms in the past in regards to their safety regulation and the treatment of workers. Specifically, the company has neglected to properly train the workers in using particular equipment for completing their tasks. It is also important to recognize that these workers had watched YouTube videos in order to learn how to perform different undertakings. Additionally, the labor workers faced discrimination when the article states: “Those workers, the suit added, were given a segregated and substandard changing area, subjected to racial slurs.” Based on these accounts, it is ultimately unacceptable for the railway company to under-pay their workers based on the notion that the workers had to face such circumstances. With that said, there is a major indication that the New York and Atlantic Company suffer from a flaw in their safety regulation.

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

Source:

Article Link: https://www.nytimes.com/2018/02/14/nyregion/railway-workers-lawsuit-discrimination.html

Posted by Shahrani Bhatti.

On January 30th of 2018, U.S. regulators made it known that they feel Congress should expand regulation of the bitcoin as well as a growing number of other cryptocurrencies. Their reasoning being that the currency is not subject to investor-protection laws. The chairmen of the SEC and the CFTC told senators that the exceedingly popular cryptocurrency has surmounted state regulation. This is only one of a growing number of concerns, as U.S. banks are taking a step forward and stopping credit card purchases of bitcoin in addition to bitcoin prices dropping dramatically as governments in China, India and South Korea have placed restrictions on cryptocurrency trading.

The chairmen continued, saying that in order to regulate cryptocurrencies and protect investors, Congress would need to become involved as the SEC and the CFTC hold no power in regards to the market of products like bitcoin. At a testimony earlier this year, Christopher Giancarlo of the CFTC said that if they were given jurisdiction in this situation that it would be a, “dramatic expansion of the CFTC’s regulatory mission.”

Both market regulators have also halted illicit operations that have attempted to capitalize investors’ growing desire for returns similar to that of bitcoin’s skyrocketing $17,900 in only December of last year. The SEC has also stopped initial coin offerings, a fundraising method that has accumulated billions from investors in exchange for the issuance of new digital currencies like the bitcoin, as the demand for them continues to grow. Chief of the SEC, Mr. Clayton said that unlike the bitcoin, however, that these other issuances leave the issuer vulnerable to federal anti-fraud and investor-protection laws. Because of unregulated exchanges, Chief Clayton says, market prices can intensely rise.

While the bitcoin is still mainly unregulated, its derivatives are continually inspected. The CTFC has examined how these tokens should be allotted for trading. Mr. Giancarlo has come up with a new process for other duplicate tokens of the bitcoin, which consist of intensified information sharing agreements between exchanges and the CFTC, and agreements by exchanges to coordinate launches with CFTC’s staff.

I believe cryptocurrency regulation is a necessity at this time. Investors need to be protected from fraud. If the U.S. begins to regulate these currencies, then other countries may also follow suit. The cryptocurrencies may also grow and lead to an increased number of jobs which can only benefit the U.S. economy. If this benefits the U.S. economy, a larger standard of living will persist and the U.S. will become a more powerful country — as a high standard of living among people, high GDP and a good economy are the defining features of powerful countries. Cryptocurrency may give the current U.S. national currency a run for its money, but in the long run, the benefits will outweigh the costs as cryptocurrencies are easier to manage and track as the exchanges are basically exclusively carried out online.

Shahrani Bhatti is an economics major at the Stillman School of Business, Seton Hall University, Class of 2020.