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 Alex Coyle.
This article is about U.S. regulators monitoring the oversight of bitcoin and other types of “cryptocurrency.” Regulators want more regulation for this kind of trade, due to the fact that “cryptocurrency trading has outgrown the state-based regulation that covers many platforms.” The goal is to create better laws to further protect anyone purchasing bonds and stocks in cryptocurrency form. In order for this to happen, the Securities and Exchange Commission might need some legislation help from the Treasury and the Federal Reserve.
The SEC Chairman, Jay Clayton, is mainly concerned with the lack of regulation, due to the fact that the “ability to manipulate the prices goes up significantly.” With prices for this type of currency being able to change so quickly, it is not fair to future investors. Many scandals have occurred in the past with other investments, and in order for this to stop, this market has to be carefully regulated.
I do not know a lot about Bitcoin and cryptocurrency, but I agree with the information in this article. It seems like cryptocurrency is an easy target for corruption, and innocent investors could get financially hurt from it. If I was investing in any type of market, I would want to be sure my money is protected and not just getting taken from me. I believe that the agencies should take care of this problem before it becomes worse.
Alex is an economics major at the Stillman School of Business, Seton Hall University, Class of 2018.
Source:
https://www.wsj.com/articles/patchy-bitcoin-oversight-poses-hazards-for-investors-regulators-say-1517913001
The craze over cryptocurrencies, particularly Bitcoin, calls into question as to how things are valued in this space. This article and video help shed some light on the issue as to whether Bitcoin is a bubble or something with real world value.
Source:
https://www.forbes.com/sites/nathanlewis/2017/12/07/what-is-the-fundamental-value-of-bitcoin/#6527eb19545a
Posted by Ruowei Peng.
Currently, there is a widespread belief that reaching a trade consensus between countries is an important part to contribute to foreign trade going on wheels. However, it is not easy to reach an agreement. NAFTA, the North American Free Trade Area, is signed by the U.S., Canada and Mexico. The three member states must abide by the principles and rules of the agreement, such as the most-favored-nation treatment and the transparency of procedures to eliminate trade barriers, but recently, there is a controversy about its revision.
According to William Mauldin’s essay, “Canada, Mexico Reject Proposal to Rework NAFTA Corporate Arbitration System”, Canada and Mexico refuse what the U.S. suggests in modifying the NAFTA’s proposal. Canada and Mexico point out that the U.S. aims to quit the organization, while they do not want any country to drop out since it may influence trade between countries. U.S. officials said that it is still negotiating. In the sixth meeting, they talked about anticorruption issues and Canada tried to put up an informal proposal that makes up for the shortfall in the U.S. demand for car production. It seems that everything develops toward a positive direction. However, the U.S. desires to secede from NAFTA, which will lead to problems that American companies would be protected by arbitration but companies in Mexico and Canada are not allowed to use the system to challenge the U.S. government. Large companies are trying to avoid it from happening because of court battles are always more expensive than arbitration. Canada and Mexico are likely to remove the investor’s state provisions and form their own bilateral investor agreement. The Trump administration proposed to shrink the challenges that the company may pose in the system. However, there is no proposal that will not be questioned by the public. Thus, the argument is still going on.
From my perspective, free trade is beneficial to a country’s development. Free trade promotes a country’s economic development, because countries in the free trade zone can circulate and reduce tariffs, while countries outside the trade zone maintain their original tariffs and barriers. To some extent, every member state wants to maximize its benefit though the proposal, but it doesn’t make sense. Thus, conflict produces and countries need to negotiate to find solution. It will be easier to reach an agreement if each of them step back and consider their citizens’ welfare and the economic benefit of all countries in free trade zone. I firmly believe that with joint efforts, they will come to an understanding.
Ruowei is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Source:
https://www.foxbusiness.com/features/canada-mexico-reject-proposal-to-rework-nafta-corporate-arbitration-system
Published January 28, 2018 William Mauldin
Article’s Title: Canada, Mexico Reject Proposal to Rework Nafta Corporate Arbitration System
Posted by Ziheng Cai (Ricardo).
The crisis intensified in recent LeTv problems from financial problems including layoffs; the ups and downs of LeTv just like drama TV series, as the founder of LeTv, Jia Yueting again and again stood in the forefront. Let us begin with a LeTv internal letter in November 2016.
On November 6, 2016, Jia Yuting, the boss of LeTv, released an internal letter to the whole staff, saying the company is focused on mainly is the mobile phone supply chain problems. According to statistics, LeTv phones have affected dozens of suppliers and agents, and the arrears amount to billions of yuan.
LeTv phones grab market share sales at lower than market prices; but, LeTv sells at a loss of 200 yuan, less direct costs and a net loss of 4 billion in the past two year. Sales cash flow cannot make up for the cost, therefore, to in order to balance this upstream supply chain is inevitable.
In addition, LeTv subsidiary mobile Hong Kong LTD has purchased an 18% stake in Coolpad for hk $2.73 billion on June 28, 2015, becoming the second largest shareholder of Coolpad. Then, in June 2016, LeTv gave out another 1 billion Hong Kong dollars for “whale swallowed” Coolpad. LeTv mobile owns about 28.90% of the shares of Coolpad Group, which makes it the single controlling shareholder. But maybe not for long, Coolpad mobile phone also because of the transformation of labor issues, capital shortage and other issues. The company’s forecast for 2016 was hk $4.21 billion.
In 2016 at an annual shareholder meeting, Jia Yueting admitted that LeTv Music made some mistakes. And in this event, an audit was rejected by LeTv. This is a violation of Article 33 of the company’s rules. In accordance with the provisions of Article 33, the shareholders shall have the right to consult, to a copy the articles of association, to the minutes of the meeting of shareholders, the resolutions of the board of directors, the resolutions of the board of supervisors, and the financial and accounting reports. The shareholder may request to consult the company’s accounting books. If a shareholder requests to consult the accounting books of the company, he shall make a written request to the company for the purpose.
Shareholders shall make a written request for a written reply within 15 days from the date of the shareholders meeting and explain the reasons. If the company refuses to provide this for inspection, the shareholder may request the People’s Court to request the company to provide for the inspection.
Ricardo is a student at the Stillman School of Business, Seton Hall University.
Source:
https://www.reuters.com/article/us-leeco-management/chinas-leeco-founder-resigns-as-chair-of-listed-unit-after-public-plea-for-patience-idUSKBN19R0B8
Posted by Masood Mohayya.
In Fall 2015, TaxSlayer, a web-based tax preparation service, fell victim to a data breach, specifically a credential-stuffing attack. Due to a security flaw, the cyber-attackers were able to gain access to almost 9000 TaxSlayer accounts, which provided them the highly-sensitive data (including social security numbers, bank accounts, and credit card information) belonging to TaxSlayer’s customers. TaxSlayer was not aware of this attack until January 2016, when a user complaint mentioned a compromised tax account. The discovery of this credential-stuffing attack resulted in a thorough investigation conducted by the FTC.
The FTC had determined that TaxSlayer failed to meet the standards set by the Privacy Rule and the Safeguards Rule of the Gramm-Leach-Bliley Act (GBLA). Although the GBLA only applies to financial institutions, such as banks or investment advisors, the fact that TaxSlayer partakes in tax return activities made it subject to the GBLA. The Safeguards Rule requires financial institutions to have a “comprehensive written security program”. Furthermore, they need to routinely monitor their cybersecurity programs, and “design and implement information safeguards” to control any risks or flaws identified during security assessments. Had TaxSlayer not violated these requirements, their network security risk could have been identified much sooner, and prevented the endangerment of thousands of customers’ information.
Moving forward, the FTC concluded that TaxSlayer must comply by the regulations set by the GBLA. Failure to do so would subject them to contempt risk. However, this incident opened larger doors for the FTC. One of their largest priorities is enforcing the importance of multi-factor authentication to access sensitive data for all companies, especially those not subject to the GBLA. They believe it is one of the most effective privacy protection tools, and can prevent countless cyberattacks. Although there are still no official legal mandates set in stone by the FTC, companies without robust network security put themselves at severe risk.
Masood is an IT management major at the Stillman School of Business, Seton Hall University, Class of 2019.
Source:
https://biglawbusiness.com/cybersecurity-enforcers-wake-up-to-unauthorized-computer-access-via-credential-stuffing/
Posted by Hailey Arteaga.
One of the biggest businesses in America is college sports. Men’s Basketball is the second highest grossing sport of colleges across the nation. According to Business Insider, a Division 1 Men’s Basketball teams alone drive-in an average yearly revenue of $7,880,290 (Gaines). With this much money being streamed to a school each year for a single sport, some critics of the NCAA believe that Division 1 players should receive a salary. However, some schools took this idea to the next level. In a recent scandal, the FBI uncovered around 25 D1 colleges committing acts of bribery and corruption in the sport of basketball in an article written by the New York Post (Masisak). One college under fire for violating the NCAA rule is Seton Hall University. Recently though, the University has argued that they “have nothing to hide” (Braziller). So, who is in the wrong? This post serves as an analyzation of Seton Hall’s past and the basketball allegations that might hurt the business of the athletics department.
The NCAA defines an “eligible” athlete as one that does not accept outside payments because of their athletic status. This extends to a professional agent bribing players with food, rent, cash, etc. (Athnet). Seton Hall was named as one of the schools by the FBI. They reported that the university was paying now New York Nets player, Isaiah Whitehead, extra money to play for the Pirates. Agents discovered a spreadsheet with players past and present from multiple universities indicating the amounts of money they were being paid to attend and play basketball at their schools. The spreadsheet revealed that Whitehead in particular received $26,136 his freshman year and was “setting up a payment plan” (Braziller). This would go against the NCAA rules of amateurism as stated previously. In more recent news however, The Hall came out and stated that they will be bringing in New York City law firm, Jackson Lewis P.C. to disprove the corruption scandal (Braziller). Kevin Willard noted regarding the development that “I have a lot of confidence in my staff and ourselves in what we’ve done in the past. I’m glad the school moved quickly on this so we can move on from it.” With such a strong assurance of the team’s actions, Willard and the university should be expected to move on from the situation unscathed.
If Seton Hall were to be found guilty of the corruption, it would greatly affect the basketball team and success of the athletic department. It could potentially risk the Hall’s ability to compete in the NCAA tournament. The payout for the 2017 NCAA tournament that Seton Hall earned for the Big East Conference last year was $1,711,784 (Kesselring). This means that not only would an inability to compete in the tournament affect the university itself, but also it would affect the entire Big East Conference. Some even argue that Seton Hall could risk their 2016 Tournament Champion Title or even Kevin Willard’s position as head coach. In the end, Seton Hall is risking a lot putting their name in the forefront of one of the biggest, recent scandals to rock college basketball. If found that they have been giving players money under the table, the university will immediately face heavy financial cuts due to their disobedience of NCAA rules, hurting other sports, other schools, and the entire conference.
Hailey is a student at the Stillman School of Business, Class of 2020.
Sources:
http://www.businessinsider.com/college-sports-revenue-2016-10
https://www.athleticscholarships.net/ncaa-loss-eligibility-payment-agent.htm
https://nypost.com/2018/02/24/analyzing-how-scandal-will-affect-ncaa-tourney-coaches/
https://nypost.com/2018/02/24/seton-halls-plan-to-prove-innocence-in-fbi-corruption-probe/
https://herosports.com/ncaa-tournament/how-much-money-ncaa-tournament-earned-conference-2017-basketball-fund-a7a7
Posted by Claudine Rosca.
Endo International PLC is a generics and pharmaceutical company that delivers medicines to patients in the fields of urology, men’s health, etc. Despite their professionalism, their products allegedly were defective resulting in liability. Product liability is the responsibility that a manufacturer incurs because they sell or create a faulty product. In 2014, Endo “agreed to pay more than $400 milion to resolve lawsuit allegations.”
Their vaginal-mesh implants had eroded in their female patients which cause painful side effects. The devices are used to “support internal organs and treat incontinence,” which is a lack of control over urination or defecation. Officer Rajiv De Silva “said the company way adding $400 million to its $1.2 billion liability reserve for the devices.” The company was blamed for organ damage in women, combining to over 10,000 suits. The issue with the company was their lack of “stricter safety requirements because they are high-risk devices.” As a result of the 2014 issues among companies such as Endo and Johnson & Johnson, the FDA ordered “vaginal-implant makers to study rates of organ damage and complications linked to the devices.”
Following the allegations in 2014, Endo continues to pay millions to resolve the sums of lawsuits against the company’s vaginal-mesh implants. Recently, Endo set aside $755 million for the eroded implants which constitutes almost $2.6 billion that was paid to wipe out cases. Their Dublin-based Endo was shut down after a piling of complaints against their devices. Other previously named companies continue to face thousands of lawsuits from women who argue against their devices. The U.S. FDA continues to increase regulations on mesh inserts but companies continue to manufacture and sell faulty products.
Claudine is an accounting and IT major at the Stillman School of Business, Seton Hall University, Class of 2021.
Sources:
https://www.bloomberg.com/news/articles/2014-10-01/endo-said-to-pay-400-million-plus-in-vaginal-mesh-accord
https://www.bloomberg.com/news/articles/2017-08-07/endo-sets-aside-775-million-to-settle-remaining-mesh-lawsuits
Posted by He Yin.
Since the beginning of 2017, the combined market value of all encrypted currencies has risen from $17.7 billion to nearly $836 billion on January 5, 2018, more than 4,500% in more than a year. In such a short time, no investor has ever seen a significant appreciation of such an asset class.
China is often seen as one of the biggest battleground states in the secret revolution. Last summer, the Chinese government halted an initial public offering (essentially an initial public offering but used in digital currency) and announced that it would close the country’s cryptocurrency exchange.
Just recently, the Chinese government announced that it would track the facilities of cryptocurrencies such as bitcoin. On January 3rd, a press release issued by the central bank outlined a plan to limit the power supply of some bitcoin miners. Given that China is currently in the currency of mining occupies more than two-thirds of all the processing power of share, the move is an obvious for COINS community, and the evolution of the encryption currency is a whole.
Comment: China has been developing rapidly in the last forty years. Its economy is a well-functioning machine. As for Russia, however, it does not have as much. Its currency, the ruble, has been in turmoil more than once in the past few decades, and its dependence on oil has caused huge swings in its economic growth. So in theory, Russia appears to be the perfect candidate for the bitcoin revolution.
He is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
Source:
Link: https://www.foxbusiness.com/markets/forget-china-this-country-has-become-the-most-intriguing-cryptocurrency-battleground
Posted by Xin Tao.
“Uber disclosed on Nov. 22 that it paid hackers $100,000 to conceal a 2016 cybersecurity incident in which names, email addresses and mobile phone numbers belonging to some 57 million users around the world were stolen. License numbers of 600,000 Uber drivers were also obtained by outsiders, the company said.”
Now Uber likely to face a barrage of state legal action after breach. Forty-eight states have laws about the breach; they require companies need to inform customers about a data breach, particularly if sensitive customer information was involved. Uber will face different amounts of fines from different states. The charges unsealed by U.S. Southern District of New York were leveled against at an Iranian hacker. The hacker attacked multiple employee accounts, and used the accounts to steal some personal data.
HBO was also a victim of hacking when an attacker released scripts of the popular show “Game of Thrones,” as well as episodes of other shows and a trove of executive emails. In an anonymous email to HBO personnel, the attacker threatened to release more data unless the company paid a ransom of approximately $5.5 million in bitcoin, according to the indictment.
According to Bloomberg News, the attackers accessed a GitHub site used by the company’s software engineers and found login credentials to an Amazon Web Services account. From there, Bloomberg News reported the attackers found a cache of rider and driver information, and later emailed the company asking for money.
When a computer is infected with malicious code, the data on it will be encrypted, until a ransom is paid in bitcoin or another form of cryptocurrency. Personally, I think the most effective way to protect our data is we should not put our personal information on the internet, especially because of the dangers of phishing websites and apps. And we should update our computers regularly to fix vulnerabilities. Also for large companies like Uber, they should take the responsibility to make sure the system is reliable after they receive customer’s information.
Xin is an accounting major at the Stillman School of Business, Seton Hall University, Class of 2019.
News links: https://www.wsj.com/articles/hbo-uber-incidents-shed-light-on-ransoms-without-ransomware-1511353574
https://www.wsj.com/articles/uber-likely-to-face-a-barrage-of-state-legal-action-after-breach-1512131094#comments_sector
https://www.wsj.com/articles/uber-hack-fallout-illinois-sues-senators-ask-for-answers-1511825588