International Law

Reliance and RICO Fraud - Hope for Franchisees

Posted on June 12, 2008
Image via WikipediaThe United States Supreme Court delivered a very important decision regarding the element of reliance in a RICO cause of action. "RICO provides a private right of action for treble damages to any person injured in his business or property by reason of the conduct of a qualifying enterprise's affairs through a pattern of acts indictable as mail fraud...

Quiznos Owed Money from Failed Class Action in Ontario

Posted on June 12, 2008
Image via WikipediaIn Canada, the losing party pays part or all of the legal costs of the motion or trial. Recently, the Quiznos class action was not granted certification, and several days ago, Justice Perell ruled on what the losing party, the Quiznos franchisees, had to pay their franchisor for legal costs...

Surviving Franchisor Bankruptcy

Posted on June 11, 2008
Image via WikipediaGenerally, I find the articles about franchising at allbusiness.com reasonable, but not compelling. However, I put this article about dealing with your franchisor's bankruptcy or insolvency pretty decent. Here are three suggestions, but read the entire article...

Googling isn't Making us Stoopider - Something Else Is.

Posted on June 11, 2008
Image via WikipediaNo this is not another whack an Nicholas Carr and his essay in Atlantic, entitled "Is Google Making Us Stupid?" Instead, I wonder why google hasn't made some of us smarter. According to the SEC, "The Securities and Exchange Commission yesterday announced an action charging advisory firm Lincoln Funds International, Inc...

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More Adsense Fraud

Posted on June 11, 2008
Image via WikipediaAs I have written before, The promise of interactive ads, delivered by Adsense, is: "AdSense for content automatically crawls the content of your pages and delivers ads (you can choose both text or image ads) that are relevant to your audience and your site content--ads so well-matched, in fact, that your readers will actually find them useful...

Australian Allphones Cheats Franchisees

Posted on June 11, 2008
Image via WikipediaThe Australian Franchisor, Allphones, has been found by a Federal Court in Australia to have engaged in systemic cheating and dishonesty: "Embattled mobile phone retailer Allphones, which is under investigation by the competition regulator, has hit back at findings in the Federal Court that it engaged in "calculated dishonesty" and "continuing deceit" against its retailers...

Suicide of Former Bayou Management Hedge Fund CEO?

Posted on June 10, 2008
Image via WikipediaIt is has been a bad month for Hedge Fund operators convicted of fraud. First, Kirk Wright committed suicide, and now the WSJ Law Blog is reporting that "Yesterday, Samuel Israel III, the former CEO of defunct hedge-fund Bayou Management, was supposed to begin serving a 20-year prison term for fraud...

Barry Schwartz: The Paradox of Choice

Posted on June 10, 2008
Great discussion about a very difficult problem: the abundance of choice, and when is more just too much.

Putting Your Money Where Your Mouth Is

Posted on June 10, 2008
Image via WikipediaMichael Nielsen asks: "Could you run an ultramarathon, solve a major scientific problem, or write a bestseller? What if you had a deadline to do it by the end of June 2009? Sound too hard? What if you placed $10,000 of your own money with an escrow service (say, a beefed up version of www...

Ten Must Have Books Part 1

Posted on June 10, 2008
Image via WikipediaDmitry Davydov, at Unusual Business Ideas that Work, has an neat list of 10 books describing how we actually make decisions and how businesses profit from our irrationality. Here are the bottom 5 from his Top 10 list, and my own observations...

Business Opportunity Scammer's $100,000 Performance Bond

Posted on June 09, 2008
Image via WikipediaThe Federal Trade Commission today announced that it has successfully secured the proceeds of repeat offender Richard Neiswonger's $100,000 performance bond. Last year, in a civil contempt case brought by the Commission, a U.S. district judge found Neiswonger in contempt for violating the terms of a 1997 permanent injunction by deceptively marketing business opportunities and failing to provide proof of his bond to the Commission, among other things...

Why Do White Collar Criminals Do It?

Posted on June 09, 2008
Image by stratosphaerenlieder via FlickrOver at the Corporate Crime Reporter, they review an academic study, and conclude: The authors interviewed 45 nationally recognized experts in white-collar crime, including prosecutors, qui tam relator trial lawyers, and white collar criminal defense counsel...

Herbalife "Rebuts" lead claims, But Provides no Proof

Posted on June 09, 2008
Aarthi Sivaraman writes about Herbalife, at Reuters, that: "Herbalife Ltd said on Sunday that independent lab tests have confirmed its products do not contain lead levels that would require labeling under a California law, disputing a prior complaint by a critic of the dietary supplement company...

What Happens When the Franchisor is Bankrupt?

Posted on June 09, 2008
Image via WikipediaPeople purchase a franchise because they falsely believe, irrationally believe, that the mere word "franchise" stands for "reduced risk and higher profit". (Sometimes this is done with an deliberate intent to deceive themselves.) Some of the worst abuse in this sector takes place with the franchising of franchise consultancies - businesses that are supposed to assist non franchised business transition to a franchised business...

Telling the Truth Slowly

Posted on June 07, 2008
Image via WikipediaGreg Newton, over at the Naked Shorts has a great series of stories for your weekend reading. But the one I liked the best was: "All that stuff about Jérôme Kerviel acting alone in setting up that ?5 billion discrepancy in Société Générale's trading account? As they say in France, taureau-merde...

Is ACN Really That Lame?

Posted on June 07, 2008
Image by mugley via FlickrDan Walmsley thinks so, and that ACN is selling crappy technology. "Ok, so they sell: (a) A product nobody wants (proprietary videophones that don't talk SIP), and (b) A product so commoditised that there's practically no margin in it (mobile and fixed line phone plans) But the common link between these two products? They're both new enough that normal people don't understand the market dynamics yet...

Restitution in Polish Fraud Case

Posted on June 07, 2008
Image via WikipediaThe FBI announced that "16.5 million dollars is to be distributed to the victims of a scheme that defrauded Polish investors. The money was obtained through a civil forfeiture action filed by the United States Government in Manhattan federal court to recover the proceeds of the scheme...

Franchise Disclosure Laws

Posted on June 06, 2008
M. Todd Henderson, University of Chicago, Faculty of Law writes about insider trading regulation that: "Ever since Louis Brandeis wrote that "sunlight is the best disinfectant," disclosure has been the fetish of American law. Our securities laws and much of corporate law are premised on the assumption that disclosure is a virtual legal panacea -- if individuals are aware of the relevant information, then the opportunities for strategic opportunism will be reduced or eliminated...

Ontario, Feversham man facing 39 counts of fraud

Posted on June 06, 2008
Image via WikipediaMeaford is a lovely little area in Ontario, west of Collingwood, which is now a favourite of Toronto retirees. But Bill Muller has been busy for the last eight years, allegedly ripping of Meaford residents by selling them non-existent biz ops...

Google Sued for Running Fraudulent Ads

Posted on June 06, 2008
Image via WikipediaEric Goldman has an analysis of a lawsuit against Google, for permitting ads on its google adsense network which advertised for a fraud. "Today's misdirected lawsuit involves "fraudulent mobile subscription services," which are optional third party services for cellphones (such as ringtones) that are charged on a periodic basis...

How Irrational are You? - Take The Cosmo Test

Posted on June 06, 2008
Image via Wikipedia Alright, Dan Ariely is not the publisher of Cosmo. But he does have a test for irrationality here. It is relatively interesting, pointing you to various chapters in his books that you need particular instruction on, give your answers to the test questions...

Is XL Results Foundation a Scam?

Posted on June 04, 2008
According Lois Watson, of the New Zealand Sunday Star Times, reports about XL Results Foundation that "Allegations of unfair conduct and misrepresentation from dozens of disgruntled clients on two continents did not stop a self-styled "wealth consultant" peddling his wares to hundreds of Kiwis across the country last week...

Sneaky Lawyer Tricks Part II

Posted on June 04, 2008
Just yesterday, I posted about a sneaky lawyer trick in franchising. So I was absolutely gob smacked when I read this interchange over at BMM with the new head of the FTC, which regulates franchising in the US. "BMM: Would you yourself buy a franchise if there were no Item 19 earnings claim ? that is to say you did not know what the profitability of the business concept was? Why did the FTC decide not to require franchisors to declare an average franchise owners income statement or at least what the bottom-line earnings for a store is? Tregillus: The Rule gives franchisors the option of making financial performance representations, rather than requiring them, because the requirements for preparing an Item 19 claim are rather demanding, and not all franchisors have sufficient reliable data from their franchisees to be able to comply with the substantiation requirements...

Sparta Chem, Inc. and Compu-Kleen Inc Agree to Settle FTC Contempt Charges

Posted on June 04, 2008
From the FTC Press Release, Dennis J. Saccurato and his businesses, Sparta Chem, Inc. and Compu-Kleen Inc. of Elmwood Park, have agreed to a settlement with the Federal Trade Commission in which, among other things, they admit that they are in contempt for violating a court order barring them from making fraudulent representations to induce sales of cleaning supplies and shipping and billing for supplies that businesses didn't order...

How good are you at finding what's best?

Posted on June 04, 2008
Dan Goldstein, at the Psychology Today Blogs, asks this question: You have been captured by an evil dictator. He forces you to play a game. He brings you into a room with 25 brightly colored gift boxes. Each box has a different amount of money in it...

How Can Your Research Your Franchisor? Sneaky Lawyer Trick to Follow

Posted on June 03, 2008
Mark Leonard, who styles himself as the Franchise Mentor, proposes the following checklist when researching a franchise opportunity. I am going to reprint the entire list, because it demonstrates two things. First, Mark has some good ideas. But, second, Mark has no idea about the effect of the FTC Rule on disclosures made outside the FDD or UFOC...

Value Menu provides no Value for McD's Franchisees

Posted on June 03, 2008
Advertising Agereports that: " With sky-high commodity costs, an increase in minimum wage and consumers trading down to lower-price items, McDonald's owner/operators are starting to push back on the dollar menu credited with much of the chain's turnaround...

From the Law and Magic Blog: Is Poker a Game of Skill or a Game of Chance?

Posted on June 03, 2008
From the Law and Magic Blog, we learn about a paper arguing for poker being more skill and luck, and so not subject to federal or state gaming laws. Gee, I thought W.C. Fields said it best. Mark: Is this a game of chance? Fields: Not the way I play it, no.

Redemption for Barry Minkow?

Posted on June 03, 2008
Thanks to Tracy for this clip about a new movie about Barry Minkow's life, Redemption There is also a story in the LA Business Journal about Barry's fraud to convict to preacher/fraud investigator story. Might not it have been easier to skip the first two steps? What say you Barry?

Who is a Franchisor - Part II

Posted on June 02, 2008
Manufacturer’s Rep Was Not a Wisconsin “Dealer”...: "Manufacturer’s Rep Was Not a Wisconsin ‘Dealer’This posting was written by Peter Reap, Editor of CCH Business Franchise Guide.Correspondent. Several days ago, I posted about sellers of business opportunities who claimed that they were not franchises, because they didn't collect royalties...

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