Business Tort And Criminal Liability Presentation Grading Gu

Business Tort And Criminal Liability Presentation Grading Guidelaw531

Differentiate between the following Agency types of business crimes an individual can commit and give a real life example via a hyperlink to a specific case and explain that case and what happened: Insider Trading; 10b-5 Stock Fraud; False Advertising; Price Gouging; and Price Fixing. Propose ways that the business entity could have controlled this risk — i.e., suggest ways the company could have avoided these charges by way of internal controls.

Explore the Federal Consumer Protection Agency and explain its powers, authority, who runs it, and interesting business abuse cases it has investigated (at least two — describe them). The Trump administration has "rolled back" many regulations on businesses since 2017 by way of executive orders. Find a business regulation that has been changed or eliminated by one of these executive orders and explain what the regulation did and whether, in your group’s opinion, it was useful. Should that regulation have been eliminated by executive order? Why/why not.

The presentation is 10 to 12 slides and is appropriate for the audience (including detailed speaker notes, except for introduction, conclusion, and references slides).

The presentation should include relevant media and visual aids consistent with the content. It should be laid out with effective use of headings, font styles, font sizes, and white space. Intellectual property must be recognized with in-text citations and a reference slide. It should include an introduction and conclusion that preview and review major points. Major points should be stated clearly, supported by specific details, examples, or analysis, and organized logically. Proper grammar, spelling, and punctuation are required.

Paper For Above instruction

Business crimes, particularly white-collar offenses, constitute a significant aspect of corporate legal risk. These crimes, while often non-violent, can cause substantial financial and reputational damage to businesses and consumers alike. Understanding the types of business crimes, the regulatory environment, and how to mitigate such risks through internal controls is essential for business compliance and integrity.

Agency Types of Business Crimes and Examples

There are various agency types involved in regulating and prosecuting business crimes, including the Securities and Exchange Commission (SEC), Federal Trade Commission (FTC), and the Department of Justice (DOJ). Each agency specializes in particular types of violations. For instance, the SEC primarily enforces laws relating to securities fraud, including insider trading and stock fraud. An illustrative case is United States v. Martha Stewart (2004), where Martha Stewart was convicted of obstruction of justice and making false statements related to insider trading. Stewart sold her shares based on non-public information, which the SEC scrutinized intensely.

Insider trading involves trading a company’s stock based on confidential information not yet disclosed to the public. An example case is the enforcement actions against Raj Rajaratnam, founder of Galleon Group, who was convicted of insider trading in 2011 (U.S. Securities and Exchange Commission, 2012). Such cases demonstrate how individuals leverage non-public information for personal gain, undermining market integrity.

Stock fraud under Rule 10b-5 involves deceptive practices in connection with the purchase or sale of securities. The Enron scandal (2001) is a notable case where executives engaged in accounting fraud to hide the company's financial losses, misleading investors and inflating stock prices (Healy & Palepu, 2003). Internal controls such as rigorous auditing procedures could have helped detect and prevent such fraudulent activities.

False advertising entails misleading consumers about a product or service. A landmark case is FTC v. Neilsen (2014), where the Federal Trade Commission took action against false claims promoting weight loss supplements. Effective internal compliance programs, truthful marketing practices, and transparent communication methods could have prevented such violations.

Price gouging typically occurs during emergencies where sellers significantly increase prices of essential goods. An example was during Hurricane Katrina, where reports detailed excessive price hikes on fuel and bottled water (Federal Trade Commission, 2008). Internal controls such as monitoring pricing behaviors and legal limits on price increases could mitigate such misconduct.

Price fixing involves collusion among competitors to set prices, harming competition. The lysine-price-fixing cartel case (1996), where several companies conspired to fix prices of the amino acid lysine, resulted in substantial fines and criminal charges (U.S. Department of Justice, 1991). Internal controls like transparent procurement processes and anti-collusion policies are vital preventative measures.

Controlling Business Crime Risks

Businesses can implement various internal controls to mitigate these risks. Conducting regular ethics training, establishing anonymous reporting mechanisms, implementing rigorous audits, and fostering a culture of compliance are fundamental strategies. Segregation of duties, monitoring employee transactions, and maintaining comprehensive documentation are also crucial in preventing misconduct.

Federal Consumer Protection Agency: Powers, Cases, and Impact

The Federal Trade Commission (FTC) is the primary federal agency overseeing consumer protection. It has broad powers to investigate unfair or deceptive practices, enforce laws through administrative actions, and impose fines. The FTC is headed by a five-member commission appointed by the President and confirmed by the Senate.

A notable case is the FTC’s investigation into Facebook (2019), where the agency alleged that Facebook engaged in deceptive privacy practices, leading to a settlement requiring changes in data practices and substantial fines (Federal Trade Commission, 2019). Another case involved the FTC’s action against Herbalife (2016), where the company was accused of operating a pyramid scheme disguised as a multi-level marketing business.

Regulatory Rollbacks under the Trump Administration

During the Trump administration, numerous regulations were rolled back via executive orders intended to promote business growth. One such regulation is the Waters of the United States (WOTUS) rule, which defined the scope of waters protected under the Clean Water Act. Critics argued it was overly restrictive and hindered economic development, particularly for agriculture and construction (Environmental Protection Agency, 2019).

In our opinion, the WOTUS regulation was beneficial in protecting vital water resources, and its rollback potentially jeopardizes environmental standards. Therefore, it might have been more prudent to modify rather than eliminate the regulation, balancing environmental concerns with economic interests.

Conclusion

Understanding business torts and criminal liability is vital for maintaining ethical standards and legal compliance in the corporate world. By recognizing various agency roles, enforcing internal controls, and critically evaluating regulatory changes, businesses can better navigate legal risks and foster sustainable practices.

References

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