Articles Tagged with “business torts”

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Many smaller community banks have been accusing larger financial institutions of walking all over them, especially over the past few years. Some of them appear to be using the latest Wall Street scandal as an opportunity to level the playing field between community banks and larger chains. One of the big sticking points between the two groups has been allegations that the larger banks have manipulated interest rates to an artificially set low. Now, at least one community bank is striking back against several larger banks in a business litigation suit. California bankers may want to keep an eye on this case as it unfolds.

The community bank in question recently filed a lawsuit against J.P. Morgan Chase and Company, Bank of America Corp., Citigroup Inc. and other major banks. It accuses them of engaging in collusion to set those artificially low rates. The community bank claims that larger banks manipulated the benchmark London interbank offered rate, also known as Libor. The Libor is reportedly decided in London by the world’s biggest banks. It has a far-reaching impact on the world, since it is used to set interest rates for consumer debt — including things like credit cards, student loans and home mortgages.
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An accounting firm has admitted its part in a large-scale tax fraud investigation and reached a deal with the government to pay $50 million in a deferred prosecution agreement. BDO USA, formerly BDO Seidman, admitted to assisting wealthy taxpayers in fraudulent tax shelter transactions meant to defraud the IRS from some $1.3 million in income taxes.

The charge of tax fraud conspiracy leveled against BDO will likely be dropped in six months, so long as the accounting firm meets all the requirements of the deal reached with the government. This means continued cooperation in the investigation, along with implementing a compliance and ethics program within the company. California accounting firms may well wish to make sure they have similar programs in the wake of this incident.
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California-based Google is finally ending several business disputes over the scanning of books that have copyright protection. The company has been involved in legal spats with several foreign companies including Syndicat National de l’Edition, Hachette Livre and La Martiniere Group. The business disputes occurred after the companies accused Google of scanning out-of-print books that still were under copyright.

There were also disputes between them over access to content that was copyrighted, as well as privacy issues. The settlement between the companies has no specific financial awards but does include sponsorship of a school-reading program. Google also plans to sell some of the copyrighted works they’ve scanned as e-books and will share any proceeds made with the publishers.
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After a request for an extension was denied, the highly anticipated California trial between Activision and the two men they fired will begin 29 May. Activision, the company that created the wildly successful “Call of Duty” franchise, is being sued by the two men they fired in 2010. The two men are co-creators of the “Call of Duty” video game. They were accused by Activision of breach of contract and stealing intellectual property for personal gain and then fired.

The men sued Activision for wrongful termination. They are asking for over $1 billion in unpaid royalties, bonuses and punitive damages. Activision has counter-sued them for the alleged breach of contract and intellectual property theft.
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Publicly owned corporations enjoy many benefits, but those benefits carry with them a cost. Specifically, they face higher standards of scrutiny and may come under fire for even innocent mistakes. In that vein, California readers may be interested to hear of a shareholder lawsuit alleging that Groupon committed fraudulent business practices.

Recently, Groupon informed investors that the company had made a mistake in its accounting for refund reserves. The mistake meant that the fourth quarter revenue last year was $14.3 million less than believed. The discrepancy was evidently caused by a failure on Groupon’s part to take customer refunds properly into account. There were more refunds than usual at the end of last year.
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When faced with a lawsuit from a large organization, a small business may not necessarily know how to fight back, much less have the resources to do so. That appears to be the case with a recent wave of lawsuits filed against small businesses in California. These lawsuits are targeted at businesses that fail to make the appropriate payment for playing a pay-per-view event. However, the amount sued for to cover the alleged copyright infringement may not always be suitable, as one business lawsuit made clear.

In that incident, a small business owner of a bar in Aptos, California found himself facing a lawsuit for $160,000 in damages for a pay-per-view event his bar displayed. However, in this case, the event was turned on by a patron and not by the bar itself. Normally, the cost of displaying the event would have been $800.
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