Posted by Mike Bocchino.

Tom Brady has been accused of knowing about his team deflating footballs in the 2015 AFC championship game against the Indianapolis Colts. The footballs’ air pressure had been significantly reduced to a point where other players could tell the difference. The NFL commissioner, Roger Goodell, investigated and suspended Brady for knowing about the tampering of the footballs. Brady fought the suspension in federal district court and his lawyers persuaded the judge. He ruled that Brady did not need to serve his suspension because it was an unfair punishment for just being accused of knowing about the deflation.

The commissioner then took the case to the court of appeals where they did not look at the facts of whether or not Brady deflated the ball, but rather whether or not Goodell was able to cast such a punishment on a player. They looked solely at whether Goodell, as arbitrator, acted in the spirit of the collective bargaining agreement. Judges Barrington Daniels Parker Jr. and Denny Chin wrote in their opinion, “We hold that the commissioner properly exercised this broad discretion under the collective bargaining agreement and that his procedural rulings were properly grounded in that agreement and did not deprive Brady of fundamental fairness. Accordingly, we reverse the judgment of the district court and remand with instructions to confirm the award.”

Basically they agree that the commissioner acted on the powers which he, the league, and the players union had all agreed upon in 2011. So those of you out there saying that Goodell has too much power, the players agreed to what he can and cannot do. Plus, the tampering of footballs is cheating and this is not the first time that Brady had been caught cheating, never mind countless times that he did not get caught. It was only a matter of time.

But overall, the court of appeals did a great job looking at whether or not Roger Goodell stepped over the line or acted within his range of duties and whether or not it was the best interest of the league, which it was.

Mike is business administration major with a concentration in finance at the Feliciano School of Business, Montclair State University, Class of 2018.

Both sides of the political isle are pressuring the Fed to be more transparent regarding its monetary policy and cease “cozying up” to the banks it oversees. There are several legislative proposals that some prior Presidents of the Fed consider to be a threat to its independence. If any one of them are passed, it would be the first major overhaul of the institution since the Full Employment and Balanced Growth Act of 1978.

Senate Banking Committee Chairman Richard Shelby is concerned with the Fed’s portfolio, because since 2008 the Fed more than quadrupled its balance sheet to $4.5 trillion. It purchased bonds to suppress longer-term interest rates, but Shelby is at a loss to discover as to what the Fed is going to do with them.

Sen. Rand Paul, along with 29 other Republican Senators, the Majority Leader, and one Democrat, is sponsoring a bill requiring the Fed to be subject to “regular audits” of its monetary policy by the General Accounting Office (GAO). Paul reasoned it is “‘unseemly that an organization that we’ve given the power, the monopoly, of making money uses that power then to try to thwart transparency.’”

Representative Bill Huizenga of Michigan, head of the House Financial Services panel’s subcommittee on monetary policy, wants to require the Fed to use a mathematical rule when it changes interest rates. New Jersey Republican Representative Scott Garrett has introduced a bill entitled, the “Federal Reserve Transparency and Accountability Act” that “would require the central bank to perform a cost-benefit analysis of any new banking rule, submit internal audits and performance reviews to Congress and send a top official to testify before lawmakers on financial rule-making.”

There is at least some change to the selection of governors. Current law now requires at least one member of the seven-member Board of Governors to have community banking experience. It brings experience other than the traditional “academic” or “megabank” experience, as the proponent of the original bill, Sen. David Vitter of Louisiana, described. Individual governors on Fed’s Board of Governors are required to be confirmed by the Senate. The Board of Governors makes important decisions on interest rates and how banks are regulated. But specific expertise in banking is not a requirement for any of the positions. “Of the board’s current five members, three are economists and two are lawyers.” The addition of a governor with community banking experience, however, lends more diversity in the decision-making process.

The New York branch has been the target of Democrats, in particular Sen. Elizabeth Warren from Massachusetts. She has been critical of the current president, William C. Dudley, of being too chummy with big banks. Warren wants more congressional oversight of the central bank. Democratic Senator Jack Reed of Rhode Island suggests that selection of the New York Fed president should be confirmed by the Senate and has proposed a bill requiring it. Currently, the bank’s directors select the twelve district bank presidents who are then sent on for approval by the Fed board located in Washington.

A lot of criticism surrounds the amount of power the president of the New York branch has over policy set by the Federal Open Market Committee (FOMC). The president of the New York bank is the only president that does not have to rotate on the committee. Dallas Fed President Richard Fisher called for the “stripping” of the New York president’s permanent role on the FOMC, because the New York branch wields too much power and influence. The Independent Community Bankers of America, a Washington lobby consisting of 6,500 members, agree.

Both Democrats and Republicans want a more accountable Fed, but there are detractors who believe that legislation would only have the effect of politicizing the central bank. In one poll, 24% of Americans polled believe that politics should stay out of the Fed.

Bank of America (“BofA”) recently settled with the U.S. Consumer Financial Protection Bureau and Office of the Comptroller of the Currency for deceptive credit-card practices.  BofA is ordered to pay $727 million in refunds to customers and $45 million in penalties.

The allegations were BofA induced customers to purchase certain add-ons, such as identity-theft protection, debt cancellation, credit monitoring and credit reporting services.  Some services were superfluous since they were already mandatory under federal law. Others were never received by the customer.

The allegations included BofA defrauded 1.4 million customers through “deceptive marketing” practices, and about 1.9 million customers were illegally charged for credit monitoring and credit reporting services that were not provided.

Richard Cordray, Director of Consumer Financial Protection Bureau, stated, “Bank of America both deceived consumers and unfairly billed consumers for services not performed.  We will not tolerate such practices and will continue to be vigilant in our pursuit of companies who wrong consumers in this market.”

Posted by Matt Gilbert.

PepsiCo is beginning to take its health push seriously, stating last month that it plans to reduce the amount of sugar, salt and fat in its products by the year 2025. The company’s newest aspiration comes as a response to growing world obesity and its striving to be in better accordance with global health standards. It also comes in light of recent discoveries that Pepsi’s juice brand, Naked, was mislabeled to say that it included less sugar than it actually does. This was a massive roadblock in Pepsi’s success as it was marketing Naked juices as a healthy, low-sugar alternative, when in actuality it had extremely high levels of sugar.

This misinformation opens a larger can of worms as to the duty of companies to warn its customers of the dangers of its products and where the line of general knowledge and the withholding of information. Essentially where does the fault go from the customer to the company? This is not a straight forward issue by any means and both sides could be argued. If the business at fault knew the true information and knowingly withheld it from the customer, then that becomes a major issue.

It also brings up an interesting and complex discussion as to if Pepsi should be obligated to improve the overall health of their products. The general public knows and acknowledges the fact that soda as a whole is not good for one’s health, so is it really Pepsi’s obligation to attempt to make it healthier when the nature of the product is to be unhealthy? What it really comes down to is where the legal responsibility of the company ends and where its moral obligation to the well-being of its customers begins. The law places baseline guidelines on the standards that need to be achieved, but in many cases that simply isn’t enough. For example, Samsung began testing their batteries internally after the debacle with their batteries even though the law doesn’t require them to go to such lengths.

Pepsi’s commitment to reduce the amount of sugar in their drinks comes at a time when the social norm is with low-calorie healthy alternatives. That being said, the legality of the situation comes into play with whether or not Pepsi needs to make such a change and where the line between customer knowledge and company deception is drawn.

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

Posted by Frankie Panicucci.

Wells Fargo is a corporate bank with very high and unrealistic sales targets. To meet these unrealistic sales targets Wells Fargo employees were secretly opening millions of unauthorized bank and credit card accounts for customers without their knowledge. These unauthorized accounts that were created racked up fees and allowed Wells Fargo to make more money. The accounts that were created started all the way back in 2011. The company then learned of this behavior and fired about 5,300 employees over the years. In order to pull off the scheme, the employees transferred funds from a customer’s original account into a new one without their knowledge, and it is estimated that around 1.5 million accounts were created. Customers were then being charged for over drafting or not having enough of a minimum balance in the original account. Employees also submitted over five hundred thousand applications for credit cards without the customer’s knowledge. Some of these accounts were charged over $400,000 in fees.

Wells Fargo was eventually caught committing these crimes after being investigated by the Consumer Financial Protection Bureau (CPFB). Wells Fargo is being fined with the largest fine since the CPFB’s inception; a fine of $185 million and also must refund customers $5 million. Of the $185 million, $100 million will go to the CFPB’s penalty fund, $35 million to the Office of the Comptroller of the Currency, and $50 million will go to the City and County of Los Angeles. As part of the settlement Wells Fargo also needs to make changes to its “sales practices and internal oversight.” The CPFB declined to mention how the investigation began.

The initial suspicions of accounts being created for customers began when some customers complained to Wells Fargo about unauthorized accounts that were created on their behalf. L.A. City’s Attorney, Mike Feuer, says, “Consumers must be able to trust their banks.” Feuer sued Wells Fargo in May of 2015 in relation to the unauthorized accounts. Once the suit was filed, he began to receive calls and emails from customers regarding the issue. Wells Fargo hired a consulting firm to look into the allegations after the suit was filed. After the investigation Wells Fargo released an internal statement which says, “At Wells Fargo, when we make mistakes, we are open about it, we take responsibility, and we take action.”

Frankie is an economics and finance major at the Stillman School of Business, Seton Hall University, Class of 2019.

Posted by Alonso Arbulu.

In June 2016, a federal court of appeals upheld government net-neutrality rules. The Federal Communications Commission enacted this new ordinance under the past chairman, Tom Wheeler. According to this law, both the government and Internet providers should treat all data on the web as equal.

An issue arose, when T-Mobile, Verizon, and AT&T started offering zero-rating plans, in which they gave their customers free data when using certain apps. The FCC perceived that the implementation of these data plans violated the net-neutrality rules by favoring certain content owned by the internet providers. In Tom Wheeler’s words, these firms’ practices negatively affected competition through “potentially unreasonable discrimination in favor of their own affiliates.” Accordingly, the FCC under the supervision of Tom Wheeler started an investigation to determine whether or not these companies were adversely affecting consumer benefits by breaking net-neutrality rules. In response to the inquiry, the telecommunication firms claimed that their practices benefited customers by increasing competition, and provided free data and easily accessible content at a better price.

At the beginning of February this year, Ajit Pai was tapped to be chairman of the FCC. Despite the past leadership’s perspective of the zero-rating plans, Ajit Pai decided to close the investigation, dropping the charges against the Telecommunication companies. According to the FCC Commissioner Michael O’Rielly “companies, and others can now safely invest in and introduce highly popular products and services without fear of commission intervention based on newly invented legal theories.” O’Rielly’s comments highlight the benefits of zero-rating plans and endorse Ajit Pai’s decision on this issue.

Alonso is an economic and finance student at the Stillman School of Business, Seton Hall University, Class of 2019.

Article links:

https://thetechportal.com/2017/02/04/fcc-against-net-neutrality-zero-rating-schemes-t-mobile-bingeon-att-sponsored-data/

FCC suspends probes of telecommunications firms

Background information:

https://www.wsj.com/articles/fcc-approves-net-neutrality-rules-setting-stage-for-legal-battle-1424974319

Posted by Randy Gomez.

In Business Law class, I learned about business ethics and how an entity should behave as a good citizen. In this article that I found online, it explains how the Federal Communications Commission fined AT&T 100 million dollars for slowing down data speeds to some customers. According to the FCC, AT&T violated a transparency rule by misleading customers saying that their plans were unlimited, when there was a maximum speed that customers would receive. AT&T is accused of not sufficiently informing its subscribers. The FCC chairman Tom Wheeler said “consumers deserve to get what they paid for,” and that, “[b]roadband providers must be upfront and transparent about the services they provide.”

It seems that the corporation was trying to maximize their short-term profits, by not being clear enough about the services provided to the consumer. As it usually happens when a corporation acts unethically to increase their profits, AT&T hurt their profits and now is receiving bad publicity. This is a great example of why companies have to take in consideration moral and ethical principles toward their decisions, instead of just trying to maximize profits.

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

Posted by Avinash Sookdeo.

On February 15^th, Southwest Airlines Co. filed a lawsuit against Aircraft Mechanics Fraternal Association (AMFA), and several of its officers, including Bret Oestreich, its National Director, in a Texas federal court. AMFA represents about 2,400 of Southwest’s mechanics and others in related fields. The lawsuit claims that AMFA allegedly helped to organize boycotts regarding mechanics working overtime shifts while in negotiations, thereby violating the Railway Labor Act (RLA). This is largely due to the fact that both Southwest Airlines Co. and AMFA have been in contractual negotiations for four years, despite the intervention of a federal labor mediator.

AMFA is being sued for three violations of the RLA, including Section 6 of 45 U.S.C. § 156, where Southwest Airlines Co. claims irreparable harm. Two counts of violation of Section 2, 45 U.S.C. § 152 was also filed, claiming that the AMFA encouraged unlawful job action and did not take necessary or reasonable steps to stop the unlawful job action. Several weeks ago, AMFA filed lawsuit in the U.S. District Court of Arizona, claiming that Southwest Airlines Co. has not maintained its status quo during its negotiations, and has communicated information to its union members directly, violating the Railway Labor Act.

Southwest Airlines Co., which is the fourth largest airline carrier, claims that the union failed in its duties “to prevent the workers from banding together to decline overtime work this month” (The Associated Press). The lawsuit comes after the company noticed a 75% decrease from average overtime shift. The company said the boycott resulted in them outsourcing extra employees, costing the company financially. According to court documents, Southwest Airlines Co. is seeking a declaratory judgement, an immediate injunction, and damages for the costs of extra staffing, amongst other things.

Avinash is a biology major in the College of Arts and Sciences and Legal Studies of Business Minor at the Stillman School of Business, Seton Hall University, Class of 2019.

Sources:

http://bigstory.ap.org/article/ec39df208463495e9d077bec242581eb/southwest-lawsuit-claims-union-workers-avoiding-overtime

http://courthousenews.com/wp-content/uploads/2017/02/Southwest.pdf

http://www.dallasnews.com/business/southwest-airlines/2016/12/16/mechanics-union-files-federal-lawsuit-southwest-airlines-take-leave-negotiating-tactics

Posted by Connie Huang.

HSBC is a bank with locations in Europe. Two branches raided on or about February 18, 2015 by Swiss authorities are located in Geneva. They raided the banks, because the banks are accused of money laundering.

Money laundering is “a financial transaction scheme that aims to conceal the identity, source, and destination of illicitly-obtained money.” The bank’s Swiss arm was aiding their clients in hiding $100 billion in Swiss accounts, as reported by the International Consortium of Investigative Journalists (ICIJ). This allowed let them evade taxes.

According to the article, the bank told their clients that it would not divulge to national authorities details of accounts. HSBC talked about “moves that [would] ‘ultimately allow clients to avoid paying taxes in their home countries.’” As said by the ICIJ, HSBC has served clients like Hosni Mubarak, former Egyptian President, the current ruler of Syria Bashar al-Assad, and Ben Ali, the former Tunisian President.

“HSBC Switzerland Offices Raided over Money Laundering Allegations – Feb. 18, 2015.” CNNMoney. N.p., n.d. Web. 22 Feb. 2015.

Connie is an international business major at Montclair State University, Class of 2017.

Posted by Aitana Robinson.

The battle between Spirit and Led Zeppelin continues in the copyright infringement case over “Stairway to Heaven.” This past July 8th the District Court of California- Western Division, found in favor of the defendants, Zeppelin.  On the 15th of March, Attorney Francis Malfoy filled in the Ninth Circuit Court of Appeals representing Michael Skidmore, the Spirit guitarist, in the hope that the appeals court will correct the mistakes of the trial court.

At the heart of the lawsuit is the accusation that Led Zeppelin copies a riff found on Spirit’s song “Taurus,” which proceeded “Stairway to Heaven.”  Skidmore’s appeal is based off the assumed error that “the trial court refused to let the jury hear the full and complete composition of ‘Taurus’ embodied in the sound recordings…”

Skidmore’s attorney complained about the court “making a series of erroneous instructions on the scope of copyright protection[,] . . . limiting plaintiff’s trial time to 10 hours violated due process and was not even close to an adequate about of time to try this case,” and finally, that “the court seriously erred when defining originality.”  Skidmore has asked the 9th Circuit court to reverse the verdict and call for a retrial.

Aitana is a communications major at the School of Communications and the Arts, Seton Hall University, Class of 2019.

Posted by Joseph Papandrea.

All different opinions are being thrown around in this case between Apple and the Federal Government. Syed Farook’s phone is what the Federal Government wants to access, due to his previous activity. Farrook killed 14 people during the San Bernardino attack. His relations to ISIS is why the government wants to access his phone. The judge decided to side with Apple in not letting the Fed’s access Farrok’s phone. Apple’s argument not to unlock this phone is because it affects everyone who owns iPhones. “Apple’s lawyers argue that the government’s demands would ultimately make iPhones less safe”(Riley). Apple being able to unlock this phone would make it less safe because phones could fall into the wrong hands. Apple in the past has helped the law enforcement in a drug dealer case. In this case it is much more serious and dangerous for society. Judge James Orenstein says there is no way he can force Apple to hack and access the phone.

The Federal Government holding this phone and stressing about this case does not make sense. There has to be a way the government can hack into the phone themselves, but do not want to reveal that power. If they are able to do that without the help of Apple that could also put a lot of people in danger.

Both Apple and the Federal Government are making a lot of things difficult. Apple was faced with a big decision about whether they were going to help access Farrok’s phone. If Apple accesses the phone, it can help the government in many ways. Their view on it though is that it affects every iPhone owner. Apple’s power to access one phone will give the government access all. A lot of people would side with Apple for fear of their own privacy, but others will argue and say that it will benefit the government because there can be evidence leading to ISIS. Apple decision is probably what is best for the company. Apple wants to stay loyal to its customers and do not want to lose income. People knowing that Apple is able to unlock a phone so easy is where customers lose trust with the company.

In conclusion, both Apple and the Federal Government are stuck between what is morally right. Apple is doing what is best for the company, because if the technology falls into the wrong hands it will bring the company down. I believe the Federal Government must have someone who can find a way to access this phone., because they have the technology already and are looking for a means to protect that secret. They can listen in on anything. In my opinion Apple is not wrong for not wanting to unlock the phone, because they are only protecting the company.

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