Replies to Discussion 5 and 6

Reply to each person using the prompt for context. Each reply must be 75 words.

Discussion 6A

Prompt: briefly discuss some of the benefits to the investor of current securities regulations.

AH: Today’s investors are protected by several provisions and Acts.  The Securities Exchange Act of 1934 regulates securities, informs investors, and prevents fraud and insider trading.   Over the years, provisions have been added to the act.   The Market Reform Act was issued in 1990 to regulate trade.  Traded securities are required to register with the SEC and reports must be updated annually and quarterly.  The federal statutes of 1984 and 1988, require strict penalties for insider trading.  The Sarbanes-Oxley Act is a more recent statute that was enacted in 2002 to hold corporate executives responsible for the information reported in financial statements.  The act was created in response to the unethical practices and scandals that occurred in corporations in the early 2000’s.  Congress passed the Sarbanes-Oxley Act (SOX) to reinstate investors’ confidence in the stock market.  SOX requires transparency on publicly traded corporations.  The chief financial executive and chief financial officer must certify that financial records are accurate.  The financial statements must contain true information about the corporation’s operations and finances.  The Public Company Accounting Oversight Board has five members who oversee the auditors of corporations.  Individuals, who are found to alter or conceal information about a corporation’s financial status, can go to jail for up to 20 years.  SOX also encourages corporations to have a code of ethics.  Lastly, whistleblowers are protected by the False Claims Act and SOX.  Whistleblowers are individuals who report fraud on behalf of the investors and government.  

KD: Some benefits to the investor of current securities regulations consist of protection, regulation of companies along with trade. The Securities and Exchange Committee, also known as the SEC, and the Sarbanes-Oxley Act, better known as SOX both have regulations on preventing crimes such as fraud. The SOX implements regulations and limitations on firms and people of power like the CEO and CFO from committing crimes. The SOX also provides whistleblowers with protection against fraud. The SEC has different regulations like the Blue-sky Laws, the Uniform Securities Act, Securities Exchange Act of 1933, and the Securities Exchange Act of 1964 to ensure companies comply with regulations. Blue-sky Laws help regulate the offerings and sales of securities in the state while Uniform Securities Act help with coordination between state and federal securities laws. These regulations consist of having companies filing their quarterly paperwork properly along with preventing insider trading for personal gains. They also help regulate the trading and how trading is to be done. All of this protects the investor because it allows the investor to have a sense of security with trading. The investor has the mindset that those in charge of trading have set rules that they have to follow.

Discussion 6B

Prompt: briefly discuss the employer's responsibilities under current employment law. For the sake of simplicity, select one aspect of employment law for your thoughts.

AH: It is the employer’s responsibility to follow the Civil Rights Act of 1964.  The Act protects individuals from being discriminated against by their employers.  Title VII is supported by the Equal Employment Opportunity Act of 1972.  The EEOC investigates complaints made by employees and follows an informal process to present the complaint to the employer. Under Title VII, employers have to fairly hire, fire, promote, and compensate employees.  They cannot discriminate against an individual’s race, color, religion, sex, or national origin.  However, an employer is permitted to discriminate against an individual when there is a rational basis for a person to not qualify for a position.   Current employer law also protects employees against sexual harassment.  The two types of sexual harassment are quid pro quo and hostile work environment.  Quid pro quo occurs when an employer says that an employee must participate in a sexual activity to receive a promotion or to keep their job.  A hostile work environment is a work area that promotes sex-related comments or actions that are not welcomed.   Employers are responsible to investigate complaints by employees who feel that they were sexually harassed.  Employers are responsible to follow other statutes besides Title VII.  One of the statutes is the Equal Pay Act of 1963.  The act requires that the same pay must be given to both male and female employees if they are performing equal work.  Another statute is the Age Discrimination in Employment Act of 1967.  The Act protects employees who are over the age of forty.  Employers who have less than twenty employees, labor organizations with less than twenty-five employees, and bona fide occupational qualifications are not covered by the act.

KD: The https://gradewriters.com/samples/week-2-textbook-discussion-and-problems under employment law is to provide a level of protection not only for the employer, but primarily for the employee and employees. One aspect of employment law that I find curious is the Fair Labor Standards Act. This is because I really haven’t heard much of this particular employment law. Fair Labor Standards Act establishes things like minimum wage, paying time and a half for overtime, and regulations of employment. Some regulations of employment include employees not receiving time and a half when they’re going from job site to job site, for time and a half excludes professionals and executives, “forbids any employment of children under 14” (Emerson, 2015, p. 570) along with prohibiting any persons under the age of working in hazardous occupations. Another regulation is limiting those who are of the ages 14-15 to non-school hours and not to work in hazardous jobs. The Fair Labor Standards Act, I think, is unique because the minimum wage can be reduced if working in restaurants and deals with interstate commerce. Another thing I find unique about the FLSA is the fact that it deals with both Federal and State regulations so it makes me wonder how many differences there are between the State and Federal regulations.

Discussion 5A:

AH: The types of insurance include life, property, liability, and health.  Life insurance can be categorized according to the length of coverage and the cost of the policy.  Term life is a cheaper insurance.  The downside to term coverage is that the insurance company does not payout if the owner outlives the policy.  Whole life insurance is the opposite of term.  The owner’s family will be guaranteed payout, but it is a more expensive insurance.  Another form of life insurance is variable, which is an investment with the market.  The policy is guaranteed to the owner’s family and the owner has the option of taking cash out and borrowing against the policy.  The downside to variable life insurance is that the owner is responsible for managing the policy with the market.  Universal life is another option for life insurance.  Guaranteed universal life insurance is cheap and guaranteed; however, it does not carry a cash value.  Indexed universal life insurance grows with the stock market; however, it is monitored by the owner and it does not make as much money as investing in the stock market.  The next type of insurance is property insurance. It is purchased to protect the property owner.  The insurance covers losses and accidents that occur on or to a person’s property.  Another type of insurance is liability.  Liability insurance can be included in property insurance and commercial insurance.  Workman’s compensation and fidelity insurance are examples of liability insurance.  Both of the insurances are beneficial to business owners.  Workman’s compensation provides compensation to workers who are injured while working on the job and fidelity insurance protects the employer from employees who cause loss to a business. Embezzlement is an example of an act that may cause loss. Health insurance is the last type of insurance.  It is also important for businesses because many employees receive the insurance as a benefit from their employers.  Most insurance companies provide health insurance coverage to all individuals and businesses regardless of health status. 

KD: There are several different insurances for a business, and each provide businesses protection.to be insured, there has to be something of value such as real or personal property. The different insurances consist of Life Insurance, Insurable Interest, Commercial Liability such as Fidelity Insurance, Business Interruption Insurance, along with Directors’ and Officers’ Liability Insurance to name a few. Life insurance benefits businesses because people are, in a way, an asset and liability to the company. Life insurance cam be broken down into different things like term life, whole life, health and disability to name some. And in doing so, protecting the people can give them a mindset of feeling protected/safe and they’ll focus on the work itself. Insurable interest benefits businesses because things like the building(s), company vehicle or vehicles, and equipment used for the business operations will be insured. Fidelity Insurance helps businesses be protected from fraudulent activity from within itself. Directors’ and Officers’ Liability, also known as D&O insurance, protects the directors and officers of the corporation from actions they take on behalf of the company. Workers’ compensation covers the workers if they’re injured on the job or in the workplace setting. This protects also the company from lawsuits from the employee as long as the injury was within accordance to the worker not being negligent. An example is if the worker uses the company equipment wrong, then the workers’ compensation would not cover the employee and the company is in the clear.

Discussion 5B:

Prompt: consumer protection, address this question: What are some of the current issues or trends in consumer protection and what are the implications for business owners?

AH: A federal agency that has been established for a long time and affects business owners is the Food and Drug Administration.  The FDA oversees the foods, medicines, and tobacco products that consumers purchase.  They are also responsible for the health of consumers when the products threaten the public’s health.  Major outbreaks of food borne illness and death attract the immediate attention of the FDA and the nation. In 2021, Tyson Foods Inc., recalled certain cooked chicken products because it contained Listeria Monocytogenes.  Listeria can cause illness and death.  The chicken was served to a vulnerable population, which included nursing homes, school districts, and hospitals.  The recall took place after people became ill and caused the death of one person.  The FDA notified consumers of the contaminated products and stopped the production of the contaminated food.  A more recent issue that occurred with the Food and Drug Administration is the recall of baby formula.  Several months ago, a few infants became ill or died after consuming the baby formula. The FDA was responsible for the inspections of the manufacturing plant that produced the contaminated formula.  The FDA’s delay in the inspection is being investigated.  The manufacturing company has been affected because the plant has been shut down due to the investigation.  The public is also affected because there is now a baby formula shortage.  The recall and the delay in the investigation is likely responsible for the manufacturing shortage.  The food industry is affected by consumer protection agencies because of food borne illnesses.  The recall of food from a large manufacturing company can affect the entire nation.

KD: Some current issues, in reference to consumer protection, is there are a lot of products that can become hazards for the consumers. There a lot of products that are out that have had hazards and minimal corrections to them. An example is with bicycles. A couple of different brands of bicycles have had issues and the correction or corrections was implementing an additional screw or adhesive to the bike. A trend I think that is happening, or seems to happen, is the company or companies is that they – the company/companies, will have a mass shipment to distributors and sell the products only to wait and see if there are any potential problems. From there, it seems the problem(s) will be classified as life threatening or not life threatening. Depending on where the issue falls will determine the next action. In doing so, I think people claim negligence but it’s hard to sometimes tell if the company knew of the hazard before shipping out the product(s). An example of this is with vehicles. An automotive brand will make a new vehicle and ship the vehicle to the dealerships. From there, within a certain amount of time later, a recall or multiple recalls come out for something pertaining to the vehicle. Some people may claim the brand knew of the risk or risks but still shipped the vehicle anyway. This can be difficult for the Bureau of Consumer Protection because if they investigate the brand, they may not find anything wrong such as false advertisement.

The issues and trends tend to become implications for business owners by having the looming concern of being sued over anything and everything. Also, the fact that the Bureau of Consumer Protection may send out new rules and regulations that may cause potential lawsuits for products or cervices the owners already have out in the market. Another implication for business owners is if their supply chain gets penalized or shut down due to not following the regulations enforced by the Bureau of Consumer Protection, there goes the income and potential problems with products sent into the market that used the resources from the supply chain.

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