Posted by Michael Larkin.

When one checks into a hotel, one would expect to have their information stored in a company’s database, but one would not expect that database to get compromised. Wyndham Worldwide Corporation was using a property management system that stored customer’s names, addresses, and credit card number. On three separate occasions in 2008 and 2009, Wyndham was hacked and this information was pulled off of over 600,000 accounts. Damage was approximately $10.6 million and the Federal Trade Commission (FTC) brought Wyndham to trial.

Even though Wyndham was the company that got hacked, it was the customers who got hurt and that is why the FTC filed against Wyndham. The FTC argued that the hacks were caused due the very limited security that the management system used. It was found that the credit card numbers could easily be read, passwords were easy to guess, and a firewall was not deployed along with various other issues. Wyndham argued that the FTC had no right to file a suit against them and that the unfairness and deception claims were not sufficiently validated. It was founded that Wyndham didn’t provide a fair system for its customers and the court required the company to change in order to protect its customers. Mainly, Wyndham needs a more comprehensive security program in order to protect account information and also conduct annual information security audits and maintain a safeguard for its servers.

This case was a matter of protection and privacy for the company’s customers. A customer is providing personal information in order to engage in business so Wyndham has a duty to protect that information. Having a higher security will ensure that hackers will not be able to breach the system and steal information. The FTC won the trial, and in doing so, made sure that a company had a high security to protect the customers.

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

Sources:

FTC v. Wyndham Worldwide Corp.

Verdict From: https://www.ftc.gov/news-events/press-releases/2015/12/wyndham-settles-ftc-charges-it-unfairly-placed-consumers-payment

Posted by Victoria Gencarelli.

Product liability is a prevailing issue and concern for companies and businesses who are marketing and selling their products. It is a company’s duty to take the liability for manufacturing and selling a product that is defective or damaged. By creating and issuing a defective product to the public, it increases the risk for dangers, damages, or harmful occurrences to take place with the use of the product. If in the case that a product is defective and capable of any danger, it is the company’s responsibility to issue a warning or a recall on the product. In this way they can they attempt to protect themselves from any legal issues and also protect the general public from encountering danger while using their products.

POM Wonderful is a company who produces fruit juices and fruit extracts, but is most commonly known for the produce of pomegranate juice. The Coca-Cola Company introduced a new “pomegranate blueberry” juice product, but POM wonderful believed the product to be false advertising to consumers. The juice was actually a blend together of apple and grape juices and only consisted of 0.2% pomegranate juice in it and also included the phrase “from concentrate with added ingredients and other flavors” in small typing. POM Wonderful presented this to the court in compliance with the Lanham Act because they believed that the name of the juice and the false advertising of the Coca-Cola Company’s “pomegranate blueberry” juice was misleading and contributing to a loss of sales for POM Wonderful.

In California federal district court, they deliberated the case and had not found POM successful in proving that the Coca-Cola Company was misleading their consumers into thinking that their “Enhanced Pomegranate Blueberry Flavored 100% Juice Blend” did not actually contain a high percentage of pomegranate juice. When the case reached the highest court, they disregarded POM Wonderful’s claim against the Coca-Cola Company and stating that Coca-Cola was not violating the FDA guidelines on product labeling. The POM Wonderful Company did lose out on millions of dollars in revenue and sales, but it was not seen as unfair competition and the jury ended the case in favor of the Coca-Cola Company. All in all, an issue such as this one has an overall impact on the food industry to be careful when labeling, marketing, and advertising their products to the public. It is always important to keep product liability in mind when generating products and selling them in order to avoid any potential problems in the long run.

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

Fox News’ Harris Faulkner, co-anchor of the daytime show Outnumbered, sued Hasbro toy company for $5 million. Hasbro sold a toy hamster named the “Harris Faulkner Hamster Doll” as part of their “Littlest Pet Shop” product line.

In the complaint, Faulkner alleges unfair competition under the Lanham Act and common law violation of right to publicity. She claimed she is “distressed” that her name would be associated with a toy that indicates it could be a potential “choking hazard” to children, and that portraying her as a rodent is demeaning and insulting.

She further claimed that since as a journalist she cannot be connected with a commercial product, “Hasbro’s use of her name in association with the Harris Faulkner Hamster Doll creates the false impression that Faulkner would impugn her own professional ethics by agreeing to have a commercial product named after her.”

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.

The Justice Department may soon reveal the details of a criminal settlement with GM over its failure to recall vehicles with defective ignition switches. The deal will require GM to plead to wire fraud and pay a penalty of approximately $1 billion. “GM is expected to enter a deferred prosecution agreement under which the government will eventually seek to dismiss the case if the company abides by the deal’s terms, according to the people familiar with the matter.”  Corporations, even though they are not natural persons, can be found guilty of crimes and be fined.

The claim is over the ignition switch, which can slip out of the run position and disable airbags, power steering, and brakes. The Justice Department alleged GM failed for over a decade to warn drivers of the safety issue even though GM knew about the problem. In one estimate, more that 100 people died and more than 200 were injured as a result of the switch failing.

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.

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 Yacheng Xu.

Federal Reserve Bank of New York President William Dudley “warned that investing in privately issued digital money such as bitcoin could end in big financial losses for those involved.” He opined, “There is a bit of a, I would say, speculative mania around cryptocurrencies in terms of their valuations, which I view as pretty dangerous, because I don’t really see what the actual true underlying value of some of these cryptocurrencies actually is in practice.”

The Fed’s vice chairman for supervision, Randal Quarles, said, “While these digital currencies may not pose major concerns at their current levels of use, more serious financial-stability issues may result if they achieve wide-scale usage.”

From my perspective, with the gaining popularity of cryptocurrency like Bitcoin, more risks such as hacking and scandals will in crease.  Bitcoin proves to be a highly speculative asset. Nevertheless, the Fed failed to enforce any rules, and the SEC merely issued some warnings regarding Bitcoin and future ICOs. The cryptocurrency is basically free of government regulations, which easily can trigger an investment bubble, illegal fund-raising, and undermining the market economy. Hence, in China, the government has shut down the cryptocurrency exchanges in September, 2017 and prohibit new ICOs.

It is indisputable that the virtual money is a great way to avoid the control by a central bank. Given the pros and cons of cryptocurrency, we should have a compromise solution, allowing the existence of exchanges but setting regulations at the same time.

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

Sources:

https://www.wsj.com/articles/feds-dudley-says-puerto-rico-has-difficult-recovery-process-ahead-of-it-1519311605?mod=searchresults&page=1&pos=8

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 Charles Matta.

UPS (or United Parcel Service) is known worldwide as the world’s largest package delivery company and provider of supply chain management solutions. There is no questioning the success that this company has had, but is there a question of their morality? Recently, UPS was supposed to be looking for clues and observing its trucks thoroughly for illegal transportation of products. It was found that UPS had been illegally transporting untaxed cigarettes from Indian reservations to customers throughout the state of New York. And while they were supposedly “observing the trucks” it was in fact believed that they had “turned a blind eye” and now the tax regulators of the state of New York are asking for the judge to impose an 873 million dollar penalty.

An eight day federal civil trial occurred with closings statements regarding the issue saying that UPS “had a corporate culture that favored sales opportunities over a responsibility to help New York enforce tax law.” The article states that this happened because: “Tobacco retailers located on upstate reservations were given price discounts for shipping in volume. Delivery drivers were allowed to accept iPads and other gifts from shippers. Account executives, whose compensation was tied to keeping big accounts, ignored signs that some customers signing delivery contracts dealt in cigarettes.” The lawyers of New York City and New York State are saying that UPS must be held accountable for what they determine to be about a decade’s worth of misconduct.

On the other hand, UPS has argued that it did follow the rules and restrictions applied to the company, but they can only do so much about policing its 1.6 million daily shippers are sending in sealed packages. In its legal filings, its lawyers said the city and state have offered no proof it “knew or consciously avoided knowing that any shipper was shipping cigarettes.” Now, UPS has terminated contracts with shippers who were known to be violating these packaging rules. “The state and city impose some of the highest taxes on cigarettes in the country in an effort to halt tobacco use,” and because of this, there are 28,000 deaths annually which causes tax payers 10.4 billion in health care related costs. One account executive writes “’I wish UPS would just take the high road, and say NO TOBACCO, NO ACHOHOL (sic), PERIOD.” UPS needs to be more strict on what is or isn’t successful and must find a way to monitor their business operations better.

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

Posted by Peyton Adams.

Avery was wrongly convicted for strangling Maryetta Griffin.  According to sources, Avery did not admit to the crime, and if he did, it was a forced confession.  However, the jury did not believe him.

The prosecution was able to sway the jury, which caused Mr. Avery to go to jail for SIX years. His image was severely damaged; he lost touch with his children and grandchildren due to being wrongfully convicted.

New DNA evidence surfaced proving that Avery was not the murderer of Maryetta Griffin.  Instead, the DNA testing was linked to Walter Ellis, a serial killer.  Avery was unjustly incriminated by the Milwaukee Police and Avery’s accusations of him not confessing, or confessing unwillingly were proved correct.

The police in this case, therefore, destroyed a man’s life by making up incriminating statements.  Avery lost touch with loved ones; his image was attacked; and he was ONLY awarded $1M.

John Stainthorp with Peoples Law Office in Chicago said, “If you think about it, six years while you’re in prison, you can’t get up when you want, you can’t see the people you want, go to bed when you want, read what you want.”  His life was ruined due to the fact that the police did not do the correct investigation to make sure that they had accused the correct man.

Mr. Avery was released after six years, but his life will never be the same AGAIN!  The Milwaukee Police should be questioned for the accusations they made in court against the plaintiff.

Peyton is a marketing major with minors in business law and nonprofit studies at the Stillman School of Business, Seton Hall University, Class of 2019.