In recent years, companies have been engaging in social good programs to reduce and compensate for the negative impact they have on the larger community. These efforts are often called Corporate Social Responsibility (“CSR”) initiatives, and they can range from reducing carbon emissions to engaging in fairer and more open employment practices. At first glance, CSR seems to benefit everyone – corporations and their shareholders, society as a whole, and even future generations. However, generosity and kind-heartedness are rarely the motivating factors behind CSR initiatives. Many corporations engage in CSR to create good press, attract consumers and investors, and to…
Author: Melissa Zacharias
On September 7, 2017, Equifax announced a massive breach compromising the personal data of 143 million U.S. consumers.[1] The compromised data included consumer names, Social Security numbers, birth dates, addresses, and driver’s license numbers.[2] That is, the exact data meant to be protected by Equifax, one of three major credit reporting and monitoring agencies.[3] As Equifax later confirmed, hackers gained access by exploiting a vulnerability on its webserver software, Apache Struts.[4] However, the Department of Homeland Security notified Equifax about this vulnerability in March[5] and requested it install the updated Apache Struts software.[6] Equifax responded by following security protocol for…
Evidence of a declining retail industry is rearing its ugly head across the United States: strips of empty store fronts along a once-bustling Broadway in New York City, the appearance of “ghost malls” in American suburbs[1], and a marked increase in Chapter 11 bankruptcy filings by major retail companies in the past year.[2] The expansion of online shopping, spurred by proverbial e-commerce giant Amazon, has undoubtedly drawn consumers away from brick-and-mortar retail stores.[3] However, the fate of struggling retail companies has been further complicated by the role that private equity firms (“PE Firms”) play in their acquisition of such companies.…
The precise origin of arbitration as a means of dispute remains unknown.[1] Within the Anglo-Saxon legal tradition, some scholars attribute the rise of extra-judicial dispute adjudication to English merchant guilds and their regulation of trade disagreements.[2] For the early American colonies, arbitration was a fairly common practice, with George Washington occasionally serving as arbitrator for private disputes.[3] Colonial-era merchants favored arbitration for a simple reason: it promised to be more efficient and cost effective than litigation.[4] Many modern corporations cite the same reason when choosing arbitration, but the rising costs and increasing length of proceedings has begun to cast doubt…
Shortly before a United Airlines flight took off, a man was pulled out of his seat, dragged on the floor through the aisle, and forced off the plane.[1] Another passenger on the flight posted a video of this fiasco and it went viral.[2] In the immediate aftermath, United became the butt of many jokes, the focus of much negative media coverage, and suffered a drop in its stock price.[3] However, these negative effects of the recorded abuse of a customer were short-lived (except for the jokes[4]). This is because United has such a dominant presence in the U.S. airline industry…
Recently, internationalization of corporations has become an attractive strategy due to the numerous advantages of conducting business overseas, including: access to bigger markets, increased profits, networking, and gaining a competitive advantage.[1] However, this strategy is daunting because of the complexity of international laws and foreign regulations.[2] One of the core issues for these multinational corporations is transfer pricing.[3] How a corporation formulates its transfer pricing strategy ultimately affects its net profits and taxable income abroad.[4] Transfer pricing is a crucial part of international trade because approximately 60% of international trade occurs within multinational corporations.[5] Thus, it is essential to understand…
On September 27th of this year, the Trump administration unveiled its “Unified Framework for Fixing Our Broken Tax Code[.]”[1] The nine page outline promises bigly: a “Zero Tax Bracket[,]”[2] “[t]ax relief for middle-class families[,]”[3] and “[t]he simplicity of ‘postcard’ tax filing for the vast majority of Americans[,]”[4] to name a few. National Economic Council Director and White House chief economic advisor, Gary Cohn, claims that a simplified tax code—one shorn of a myriad of deductions and loopholes—will benefit the middle class.[5] The plan will reduce the number of income tax brackets from seven to three: 12%, 25%, and 35%.[6] Although this…
On August 23, 2017, the Federal Trade Commission (“FTC”) approved Amazon.com, Inc.’s (“Amazon”) proposed $13.7 billion acquisition of Whole Foods Market, Inc. (“Whole Foods”).[1] Bruce Hoffman, acting director of the FTC, announced that the FTC will not further investigate the acquisition after finding it does not “substantially lessen[] competition under Section 7 of the Clayton Act, or constitute[] an unfair method of competition under Section 5 of the FTC Act.”[2] Whole Foods shareholders then immediately approved the acquisition for $42 per share.[3] The acquisition marked Amazon’s shift from exclusively online retail by introducing broad brick-and-mortar operations.[4] Accordingly, it raises the…
It has been a while since the name “Bitcoin” first appeared on mainstream media in 2011.[1] As the first distributed digital currency in the world, Bitcoin quickly attracted public attention for redefining the conventional notion of “currency.” Suddenly, everyone who owned a computer and had access to the Internet appeared to be mining (“Mining” is the term of art used to describe the process of earning bitcoins by contributing your computer power to solve computational puzzles in the bitcoin system, where new bitcoins are released to reward your participation[2]). Bitcoin became so popular that you might have heard of someone…
When auditing the financial statements of their clients, one of the principal goals of an auditor is to be fair and independent. However, meeting this goal has proven to be a difficult feat. Although auditing companies like the “Big Four” are partially to blame, fault may also lie with the agencies that monitor auditors.[1] The agencies that monitor auditing firms may be apprehensive about setting bright-line rules delineating when an auditing firms’ actions compromise fairness and independence. Auditing firms can be monitored by several organizations including the American Institute of Certified Public Accountants (“AICPA”), the Financial Accounting Standard Board (“FASB”),…