In class, we discuss the American legal system’s doctrinal foundation of presumption of innocence, based on Blackstone’s formulation, and even deeper, its Biblical roots. A Kansas man was recently released from prison for a crime he did not commit. His brother confessed to killing his niece and then committed suicide.
Kansas has no law helping those who are released from prison. Other states, such as Texas, would have given him $1.8 million, or $80,000 for every year lost, “not including a yearly compensation afterward.” Colorado would provide $70,000 for each year, and Alabama, $50,000 per year.
As a remedy, it is possible to sue state officials under federal law. Section 1983 of the code in part states, “Every person who … subjects, or causes to be subjected, any citizen of the United States or other person within the jurisdiction thereof to the deprivation of any rights, privileges, or immunities secured by the Constitution and laws, shall be liable to the party injured in an action at law.”
These cases are difficult, but not impossible, to prove. Police have “conditional immunity” from prosecution, and prosecutors have absolute immunity, where a case can go forward if there is evidence of intentional misconduct.
Posted by Dan Lytle.
David Ganek, the former owner of a hedge fund in Greenwich, Connecticut, had lost his business in 2013, three months after an FBI investigation took place for alleged insider trading. Two years later, in 2015, Ganek attempted to sue the FBI for $400 million, citing “lost income and lost business reputation.” The reason Ganek went through with the lawsuit is because he did not believe it was fair to investigate his office when he was not involved with insider trading. However, the Second Circuit panel disagreed, saying, “there was at least a fair probability to think that his office was a place where evidence of an insider trading scheme would be found.” While some evidence was found to hold against Ganek, he was not ultimately charged for anything. Ganek still does not believe this was right to do, since it cost him his business. He said of the situation, “’this is a dangerous day for private citizens and a great day for ambitious, attention-seeking prosecutors who are now being rewarded with total immunity even when they lie and leak.’” Just recently, it was announced that Ganek had lost this case against the FBI.
In my opinion, the FBI was acting both legally and morally in searching the office of David Ganek for insider trading evidence. From a legal perspective, the FBI searched the office because they had reason to believe there was evidence present in order to uncover a larger insider trading scheme. Furthermore, morally, the FBI acted correctly, as their search aimed to crack down on insider trading. While I do believe that it is not right that FBI agents can be rewarded with immunity when investigating businesses, this is an exception, as the investigation of this “hedge fun and others sent shockwaves through Wall Street’ and led to the indictment of investment bankers and traders.” Therefore, while Ganek was not necessarily guilty of insider trading, the FBI was able to use information found throughout the raid of his hedge fund that led to the arrests of others, which is a crucial factor as to why Ganek lost this lawsuit.
Speaking legally, the FBI was protected under Amendment IV of the Constitution, which protects citizens against unreasonable searches and seizures. However, in this case, the FBI had probable cause to search Ganek’s hedge fund, as they believed that Ganek’s hedge fund was involved with an insider trading scheme. While the Fourth Amendment states that nobody can be unreasonably searched, it also mentions that “upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, persons or things [can] be seized.” In short, while Ganek did not agree with the ruling because he believed the FBI was granted “immunity” for searching his office and causing his hedge fund to fall apart, the reality is that the FBI acted legally according to Amendment IV.
Dan is a marketing major at the Stillman School of Business, Seton Hall University, Class of 2020.
Sources:
http://news.findlaw.com/apnews/53ca32d894c44c5ea64185ab462b6e72
https://www.billofrightsinstitute.org/founding-documents/bill-of-rights/
Posted by Sandra Mucha.
Rio Tinto, one of the world’s largest mining companies, is under investigation for allegedly overstating the value of a mine in Africa by billions of dollars. Rio Tinto Plc’s CEO Tom Albanese and CFO Guy Elliott were accused of performing fraudulent activities within their business on October 18, 2017. The accusation included claims about the unlawful concealment of critical information regarding the company’s multibillion-dollar failure. The two former top executives were suspected of inflating the coal assets in Mozambique in order to hide the ordeal. By concealing information they violated company policies and failed to follow the proper accounting standards to accurately record the assets. To settle the claims given by the U.K. Financial Conduct Authority the company agreed to pay $35.6 million. By hiding the true value of a coal mine in Mozambique and making misleading public statements, the company was able to raise $5.5 billion from U.S. Investors from 2011-2012.
Although the company is based primarily out of London the company’s stocks and shares are traded by U.S. investors on the New York Stock Exchange thus granting the U.S. with the rights to pursue the case. The SEC claims that the public bond offerings harmed U.S. investors. Guy Elliot claimed that the allegations were invalid, and promised to vigorously dispute the charges. The SEC forced him to resign from the board of Royal Dutch Shell and is seeking to have Albanese and Elliott barred from acting as officers or directors of any public company.
I believe that the executives were fully aware of the low monetary value of the mine, understanding that it was worth significantly less within a year of purchasing it. Because the men but did not share that information with investors until 2013, nearly two years after people had already purchased $5.5 billion worth of shares, they should be charged with fraudulent activity for their inability to comply with the rules and regulations. They distributed false information to individuals who follow the stock market. While it is acceptable to refrain from releasing information to the public too early because it can cause misunderstanding and panic, it is wrong and illegal to record inaccurate asset values. The executives were dishonest and deceitful and should be punished accordingly.
Sandra is a business major at the Stillman School of Business, Seton Hall University.
Reference Link:
https://www.cnbc.com/2017/10/18/reuters-america-update-5-u-s-sec-charges-rio-tinto-former-top-executives-with-fraud.html
Posted by Aristea Selmani.
In recent years, the operating role of business executives amid law firms has risen to a new high. Bloomberg law reporter Casey Sullivan, argues in his article Should Business Managers Run Law Firms this mere notion of as to “what degree should business executives oversee operations at law firms as opposed to lawyers who do what they do best — practice the law” (Sullivan). The growing number of business executives present in the field of law, seems particularly peculiar given the fact that a lot of these executives have no previous experience in law practices or simply do not hold any law degrees. Nonetheless, they are still entrusted with the subtle responsibility of “telling lawyers how to manage their work”, when in truth, such a role could be more effectively performed by lawyers who essentially practice law and understand how law firms operate. Throughout this article, Sullivan attempts to incorporate the opinions and thoughts of several business executives, which primarily concern their roles in the department of law.
Sullivan begins his article with an introduction detailing the influence of business executives in one particular law firm by the name of Katten Muchin Rosenman of Chicago. According to the report, this establishment just recently declared that it “has no plans to scale back managerial oversight of its 600-lawyer firm” (Sullivan). On the contrary, they are hiring longtime chief operating officer, Craig Courter to manage the daily operations of their law firm. Sullivan declares that Craig Courter is another addition to the list of business executives who “do not practice law … but are [still] charged with the delicate task” of managing lawyers (Sullivan). Their executive roles span from making small everyday decisions to choosing the right clients for the firms to take on. More explicitly, Sullivan also mentions that at Katten Muchin Rosenman Courter will act as a supervisor of marketing, finance, technology, talent management and human resources.
In another case mentioned throughout this article, chief operating officer of the Americas at White & Case, Victor Núñez, plainly stated that “[he] really didn’t know much about law firms and how they operate,” and never went to law school, but was still charged with the important role of “assessing the profitability of client matters, as well as forming strategy around and executing new office openings” (Sullivan).
Furthermore, in Should Business Managers Run Law Firms, Sullivan cites another business executive who is currently met with skepticism known as John Yoshimura, chief operating officer at McDermott Will & Emery. Yoshimura just recently began to implement a business-development team to help lawyers with their clients, however since the McDermott “partners have been “skeptical” of business development staff handling their client relations”, the new development is still in the planning phase. He did however make a strong case regarding the notion that “doing outreach through business development staff … is more cost effective than having partners do it” (Sullivan). Therefore, on the basis of this aspect, and given the statistic that there is a growing number of law firms in the market, business administration roles could consequently be greatly demanded in the recent future.
Aristea is an undecided business major at the Stillman School of Business, Seton Hall University, Class of 2020.
Source:
Article Link: https://biglawbusiness.com/should-business-managers-run-law-firms/
Posted by Justin Trigg.
Northern California homeowners have filed a lawsuit against Pacific Gas & Electric Co. for failing to sufficiently protect power lines before the region’s deadly wildfires. The homeowners Wayne and Jennifer Harvell argue, “[the] drought-like conditions over the summer put fire dangers ‘at an extraordinarily high level’, the homeowners are claiming PG&E failed to trim and remove vegetation within close proximity of power lines.” The California Department of Forestry and Fire Protection are actively “investigating the power lines and equipment as a possible cause of the fires that have killed at least 41 people and destroyed 6,000 homes.”
If the state, fire investigators determine the utility’s equipment as a possible cause, then the California Public Utilities Commission, who regulates PG&E, investigates the issue. In recent years, PG&E has been fined “$8.3 million for failing to maintain a power line that sparked a massive blaze in Northern California that destroyed 549 homes and killed two people” and “$1.6 billion for [a] 2010 natural gas explosion in the San Francisco Bay Area city of San Bruno that killed eight people and destroyed 38 homes”. Moreover, PG&E has reported to state regulators of several accounts of damages to its equipment. However, the report failed to acknowledge whether they might have caused the fire.
In my opinion, because of the evidence of PG&E’s failures to maintain their equipment from causing destruction and damage in recent years, they must increase their efforts to sustain their equipment in order to avoid these tragedies. Meanwhile, California homeowners, who appear to be aware of the danger of vegetation growing close to power lines, must alert the proper authorities to trim and cut down these hazards. With an increased effort from both parties, perhaps the degree of severity from these reoccurring California wildfires can be lessened.
A day following the lawsuit, United States Senators Dianne Feinstein and Kamala Harris of California wrote the Federal Communications Commission expressing their concern of the federal government’s failure, “to adopt rules that would require wireless carriers to more precisely target neighborhoods with orders to evacuate”. This regulation would certainly benefit the residents of neighborhoods in imminent risk, while evading alerting residents, who are in safe areas. The Senators argue, “These emergency services are caught in a bind between notifying individuals in imminent danger and risking mass panic”.
Justin is an accounting and finance major at the Stillman School of Business, Seton Hall University, Class of 2020.
Source: http://news.findlaw.com/apnews/b98b3394040d470aa6db2afbdb2ea4dd
Posted by Alexandra Prostamo.
On October 16, the Supreme Court agreed to consider Microsoft’s dispute over the government’s authority to be able to access emails and digital information sought in criminal investigations, but stored outside of the United States. According to the Trump administration and 33 states, the court’s decision is impeding investigations into terrorism, drug trafficking, fraud and child pornography just because the email information is stored in servers in Ireland. This is why they urged the court to take the case, U.S. v. Microsoft.
They believe the decision has implications not only for Microsoft, but also for other technology giants like Google and Yahoo, stating that “a private company has unfettered discretion to shield evidence of crime from law enforcement, simply by electronically sending that evidence out of jurisdiction.” The issue rises from the fact that data companies have built servers around the world to keep up with customers’ demands for speed and access. This is why the court needs to confront whether the same rules can be applied to the emails of both an American citizen and a foreigner.
What Microsoft is trying to battle is the Stored Communications Act of 1986, which allowed a U.S. law enforcement agency to obtain stored e-mails with a warrant from a U.S. provider if those e-mails are stored abroad. Microsoft president and chief legal officer Brad Smith stated that “the current laws were written for the era of the floppy disk, not the world of the cloud”. Microsoft deeply advocates for the fact that Congress should pass a new legislation, however the result of the dispute could have significant global business and privacy implications.
Alexandra is a business management major at the Stillman School of Business, Seton Hall University, Class of 2019.
Sources:
https://www.washingtonpost.com/politics/courts_law/supreme-court-to-consider-major-digital-privacy-case-on-microsoft-email-storage/2017/10/16/b1e74936-b278-11e7-be94-fabb0f1e9ffb_story.html?utm_term=.4863bf16975d
http://news.findlaw.com/apnews/fb9b07a2c14940b0977cb35ff01166ff
Posted by Gabrielle Vanadia.
Recently, there has been a lawsuit filed in federal court against three major American corporations for supposedly doing business with the Iraqi government during the Iraq War. This lawsuit was filed by lawyers from a start-up firm led by Ryan Sparacino and the litigation firm of Kellogg Hansen, on behalf of members of the American military that were killed or injured in attacks during the Iraq War. General Electric, Johnson & Johnson, and Pfizer are three of the major corporations being accused of providing free drugs and medical devices that funded the Shiite militia. Other companies accused of contributing are the European drug makers AstraZeneca and Roche Holding A.G. The lawsuit filed provided contracts between these companies and Iraqi government, as well as “leaked diplomatic cables, press accounts, and the testimony of informants.”
The lawsuit claims that the companies knew that the Iraqi health ministry, who they were providing with drugs, had become a terrorist organization. Upon knowledge of this information, the corporations should have terminated their contracts or changed them to prevent corruption, since it is illegal under United States law to knowingly fund terrorist groups. However, a Pfizer spokeswoman said that the company “denies any wrongdoing” and that their mission was to “provide medicines to patients to help better their lives;” while Johnson & Johnson has completely declined to comment on this matter.
In my opinion, the actions of these companies are completely unacceptable. They willingly and knowingly funded a terrorist group that was attacking United States soldiers. American soldiers were in Iraq to help rebuild and regain the country for the Iraqis after the overthrow of Saddam Hussein. However, instead of American companies backing and funding their own troops, they helped the enemy. The militia group that U.S. soldiers were fighting were commonly referred to as the “Pill Army” because their “fighters were often paid with prescription medicines and used hospitals… as staging areas for death squads.” Many of these death squads funded by drugs from American companies killed American soldiers. If I was an employee of one of the accused American corporations I would be embarrassed and ashamed of my company’s actions.
Gabrielle is a public relations major with a business administration minor at Seton Hall University, Class of 2019.
Source:
https://www.nytimes.com/2017/10/17/us/johnson-ge-pfizer-terror-iraq.html?rref=collection%2Fsectioncollection%2Fbusiness&action=click&contentCollection=business®ion=stream&module=stream_unit&version=latest&contentPlacement=13&pgtype=sectionfront
Posted by Reganne Camp.
Recently there have been tragic wild fires in Northern California, now killing 41 people and destroying 6,000 homes. Wayne and Jennifer Harvell believe that the Pacific Gas & Electric Company had something to deal with how bad the fires became, which is why they are suing. They believe that the company failed to adequately protect its power lines before the region’s deadly wildfires. The lawsuit in San Francisco Superior Court says drought-like conditions over the summer put fire dangers “at an extraordinarily high level,” particularly after heavy winter rains increased vegetation. It says PG&E failed to trim and remove vegetation as it should have. The California Public Utilities Commission, which regulates PG&E, would investigate only if state fire investigators confirm that that the utility’s equipment was a part of the reason for the fires.
PG & E Co. has been in trouble before. Earlier in the year, the utility commission fined PG&E $8.3 million for failing to maintain a power line that caused a massive blaze in Northern California that destroyed 549 homes and killed two people. In addition, California regulators fined PG&E $1.6 billion for 2010 natural gas explosion in the San Francisco Bay Area city of San Bruno that killed eight people and destroyed 38 homes.
I understand why sometimes a company does not reach out to the public in case of causing mass panic for no reason, but they also need to protect people who could possibly be in danger, especially, where there is a history of people dying in incidents that cause. The company may not have control of the temperature and how high it gets, but they do have control over their equipment and duties they are supposed to monitor. Companies that commit illegal acts and especially where they also act unethically gives the victims more of a reason to sue.
Reganne is a marketing student at the Stillman School of Business, Seton Hall University.
Posted by Shellian A. Murray.
The basis for this blog will be an Enron story” The Smartest Guys in the Room (2005)” which was retrieved from the documentary listings on Netflix. A 2929 Entertainment, a Wagner/Cuban Company, Magnolia Pictures, HDNet Films. The documentary takes a behind the scenes look at the reliable energy company whose downfall will forever change the scope of business prospects around the globe. The “Jesus saves” notion was embedded with everyone asking the same sets of questions, which include, whether or not one main person was to be blamed, or it is a shared effort, and what mechanisms were put in places to make sure such events will never occur again. The fall of Enron was considered to be the largest bankruptcy in the United States of America history.
Enron, a company that took approximately 16 years to build and with a net worth of over a 100 million in assets took 24 days to go bankrupt. What everyone thought was a significant investment and a company that was poised to take over the energy section with major gas prices, turns out to be the biggest Ponzi scheme. But in an instructive tale of corporate greed, negligent and diffusion of responsibility, there was no evidence of directors’ fiduciary duty, integrity, and stewardship displayed from those who were the leading players in the Enron scandal.
Jeffery Skilling, the former president and CEO and Kenneth Lay chairman/CEO were both Harvard graduates, the leaders of Enron, and were known as “the smartest guys in the room.” Skilling and Lay were the captains of the ship; one that they thought was too powerful to go down. The employees that were involved were consumed by pride, greed, arrogance, and intolerance that they fail to realize they were just sinking themselves into a hole: a hole that will be unable to climb back out. The chaos caused by Enron traders in the 2000 California energy crisis left many disgruntled. California was seen as the money pit for Enron. The game was to create blackouts that would then drive-up gas prices significantly. Many called on the federal government to fix a deregulatory system that Enron officials took for self-interest, but were told that the state was on its own and had to correct the problem by themselves.
On the other hand, Enron’s CFO, Andrew Fastow was still able to continue leaving massive debts off the balance sheets and booking future earnings, producing an illusion of market-to-market profit. The Security Exchange Commission (SEC) did not have a problem with this accounting method and failed to enforce against companies like Enron. But reported profits were actually losses, even though amounts were not collected or collected, but were supposedly prepayments from clients, where such momentum was created to keep the stock price up. But after winning the award for the best innovative company six years in a row, many persons started to question, how Enron made its money. A reporter by the name of Bethany Mclean wrote an article, “Enron stock overpriced?” realizing that the cash flows were not coming together.
Jeffery Skilling the CEO had resigned suddenly, which lead the SEC to launch an investigation. Enron declared bankruptcy on December 4, 2001, giving employees thirty (30mins) to leave the building. But before such bankruptcy declaration, on October 23, 2001, Author Andersen, the prestigious accounting firm had destroyed thousands of documents which were related to Enron finances.
Opinions and Reactions
The operation of Enron defrauded employees and investors out of millions of dollars, which at the same time the “big guys” who were involved in the game were quietly bailing themselves out, putting millions in personal and offshore accounts including the banks, such as, Chase and Citi Bank. Ken Lay had a high level political figure as a good friend, one that could help Enron to maintain its operation’s practices. Consequently, and if one were to believe it or not, politics is the driving factor for all regulatory and policies within any countries operations.
ArthurAndersen, the prestigious accounting firm, was paid a million dollar per week, denied their awareness of such practices of Enron. Auditors that supposedly gave reasonable assurance that the financials were, in fact, true and fair and free of material misstatements. As a result, many persons questioned the integrity and independence of the accounting and auditing profession. Such questions left a bitter taste in my mouth, within a career that has my interest and aspiration. A profession I held a role as an external auditor, internationally, and now as an accountant, I am in an “aww” moment, as to how people’s greed could allow them to continue embezzling cash or equivalents by any means necessary, no matter what harm may have caused by such actions. The disappointment I have with these people that are involved, by allowing their integrity to be compromised because of the greed of money is very heart rendering, wherein the end, mostly the poor suffer from such harsh deals.
Shellian is a master of science in accounting student at the Feliciano School of Business, Montclair State University, Class of 2018.
Posted by Faris Alzahrani.
On June 20th Christiano Ronaldo was accused by the government prosecutor for evading tax four times amounting to $16.5 million. Ronaldo was investigated and was expected to appear before Pozuelo de Alarcon court No. 1 on July 31. His summoning accorded with the same prosecutor who indicted Mourinho for evading tax two times. The prosecutor reported that there was enough evidence that Christiano Ronald used a shell firm to hide the cash she had acquired from the team image rights. However, Ronaldo pleaded not guilty.
It believed that Ronald had to move out of the country and join another football club because of the accusations against him. It was alleged that Mourinho committed tax deception in a period between 2011 and 2012; this is according to Madrid’s prosecutor. All of the evidence was based on the facts delivered by Spain Tax Office that indicated that Mourinho also hides money from profit rights and avoided to pay tax (Fox, 2017).
Everything was left in judges hands. It is crucial to note that these individuals are not the first to be accused of tax fraud. Last year a Barcelona striker, Lionel Messi was indicted for tax fraud on three counts that amounted to $4.6 million, this mainly from the income made from image rights. He was given a 21-month jail sentence, but he was not expected to serve in prison, since it was his first offense and his sentence was below two years.
Faris is a graduate student at the Feliciano School of Business, Montclair State University.
Reference:
News, F. (2017, June 20). Cristiano Ronaldo, Jose Mourinho caught up in Spain tax scandal. Retrieved from Fox News: http://www.foxnews.com/sports/2017/06/20/cristiano-ronaldo-jose- mourinho-caught-up-in-spain-tax-scandal