Massive Estate Planning Mistakes of Celebrities

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[Marilyn Monroe]Consider the mistakes of these five celebrities when you make decisions about your estate or advise others about theirs. As Sheyna Steiner reports, problems in life may compound after death as creditors, heirs and the Internal Revenue Service come calling for their share of an estate.

Questions:
1. After reading about these five celebrities, what, in your opinion, is the biggest lesson learned?
2. Which of these stories is the saddest in your opinion and why?
3. Which of these stories would help you the most as a future accountant, advising a client, and why?

Source:
Steiner, S. (2013). 5 Celebrities Who Made Massive Estate Planning Mistakes. Business Insider, June 7 (Retrievable online at http://www.businessinsider.com/5-celebrity-estate-planning-mistakes-2013-6).

Welcome to the GMO free zone of the future

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As we head into the hot summer, what sounds great? Well, ice cream, of course! And who is in the news? Ben and Jerry’s.

According to the Huffington Post, Ben and Jerry’s is removing a controversial ingredient from its ice cream: Genetically-modified organisms (or GMOs). The back story is that only 80% of Ben & Jerry’s ingredients are sourced non-GMO, according to the ice cream maker. The conversion process to remove the remaining GMOs may continue into 2014.

Questions:
1. Why are foods genetically modified in the first place?
2. What did Unilever, Ben and Jerry’s parent company, do to avoid labeling GMO’s in California? What other companies did the same thing?
3. How should the companies that you mentioned in Question 2 record these costs? Discuss these cost presentations in terms of the financial records and financial statements.

Source:

Stuart, H. (2013). Ben & Jerry’s Will Stop Using Genetically-Modified Ingredients, Company Says. The Huffington Post, June 2 (Retrievable online at http://www.huffingtonpost.com/2013/06/02/ben-and-jerrys-gmos-genetically-modified_n_3372451.html?utm_hp_ref=business)

Pension Predators – A New York Investigation

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Gov. Andrew Cuomo is ordering New York’s top banking regulator to investigate “pension advance” firms. The payments by these firms are advertised as advances. However, they are really cleverly disguised high interest rate loans that target older citizens’ assets.

Questions:
1. What are the benefits for the firms on insisting that they are advances rather than loans?
2. According to the New York Times, what is the range of interest rates on the “advances?”
3. What are the three options that New York has in dealing with the pension predator companies?

Source:

NYT editorial board. (2013). Pension Predators. money_ballThe New York Times, May 15 (Retrievable online at http://www.nytimes.com/2013/05/16/opinion/pension-predators-in-new-york.html?src=recg)

Why is the IMF chief in court?

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Recently, Christine Lagarde was grilled by a French court in regards to a business settlement with disgraced tycoon Bernard Tapie in 2007.

Questions:

1. What is the IMF? Why was the IMF in the news in 2011?
2. What is the controversy about? Is anyone alleged to have profited from the incident?
3. What does the story have to do with the company Adidas?

Source:
BBC News. (2013) IMF chief Christine Lagarde key witness in Tapie case. BBC News Europe, May 24 (Retrievable online at http://www.bbc.co.uk/news/world-europe-22652922)
CNN Video. (2013) Why is the IMF chief in court? CNN, May 23. (Retrievable online at http://www.cnn.com/video/#/video/bestoftv/2013/05/23/bittermann-lagarde-in-court.cnn)

The Value of Newsjacking

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Newsjacking refers to the practice of capitalizing on the popularity of a news story to amplify your sales and marketing success. The term was popularized in David Meerman Scott’s book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. In this video, Christine Romans and PR expert Rachel Sklar analyze the decision of McDonald’s to attach themselves to Charles Ramsey’s new-found fame in the Cleveland kipnappings.

Question:
1. Based on the video, what does newsjacking require corporate marketers to do? If a corporation pays marketers to do this, in what manner do you think that they should be compensated?
2. Do you think that a value could be attached to a newsjacking service? If so, how would you do it?
3. Research newsjacking and present your favorite example, other than those given in the video.
4. Present a cost/benefit analysis of newsjacking versus traditional PR methods.

Source:
CNN Video. (2013). ‘Newsjacking’ in social media, May 10 (Retrievable online at http://www.cnn.com/video/#/video/bestoftv/2013/05/10/ym-sklar-social-media-business.cnn)

Is it fair that some hospitals are charging 400% above their costs to deliver services?

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According to government data, hospitals charge Medicare wildly differing amounts — sometimes 10 to 20 times what Medicare typically reimburses — for the same procedure. This raises questions about how hospitals determine prices and why they differ so widely.

Questions:
1. Discuss the data set and what was included.
2. According to the article, who are the people that are getting hit with the extremely high hospital bills?
3. What were some of the reasons that hospitals gave for the extremely high bills?
4. Based on your opinion, what was the most interesting issue in this article?MEDICAID-1-articleLarge

Source:
Meier, B., J.C. McGinty, and J. Creswell. (2013). Hospital Billing Varies Wildly, Government Data Shows, The New York Times, May 8 (Retrievable online at http://www.nytimes.com/2013/05/08/business/hospital-billing-varies-wildly-us-data-shows.html?hp&_r=1&)

IPO Fever

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U.S. companies are on track to raise the most money through initial public offerings since before the financial crisis. It appears that this trend is driven by the same thirst for risk among investors that has pushed the stock market to new highs.

Questions
1. Based on the information given in this article, what is the average amount already raised this year, based on number of firms and dollars raised?
2. How does your answer in #1 compare with the average for the same period in 2012?
3. What does the article indicate that successful deals have also been promising besides a good aftermarket?
4. What is your reaction to the risks being taken by investors at this time?Money-file-2

Source:
Demos, T. and M. Jarzemsky. (2013). IPOs Set to Raise Most Cash Since Crisis. The Wall Street Journal, May 12 (Retrievable online at http://online.wsj.com/article/SB10001424127887324031404578478940578501324.html?mod=dist_smartbrief)

The Tragedy of “Fast Fashion”

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A garment factory, manufacturing products for international clothing companies, collapsed outside of Dhaka, Bangladesh, last month. The collapse killed more than 400 workers and injured many others. This tragedy came on the heels of a factory fire in November 2012, which killed 112 workers.

Questions:
1. Who are some of the chains that supply “cheap fashion” from Bangladesh?
2. Explain why the article calls it a “numbers game.”
3. From an ethical standpoint, what should consumers do?

Source:
NPR. (2013) Ethical Fashion: Is the Tragedy in Bangladesh A Final Straw? Fresh Air from WHYY, May 2 (Retrievable online at http://www.npr.org/2013/05/02/180557959/ethical-fashion-is-the-tragedy-in-bangladesh-a-final-straw)

www.RT.com. (2013). The high cost of cheap clothing, April 26 (Retrievable online at http://www.youtube.com/watch?v=8788BHbf6Xc).

Access to Material Confidential Government Information?

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According to The Washington Post, the Securities and Exchange Commission has issued subpoenas to Height Securities, a Washington-based stock brokerage firm, and individuals in connection with the leak last month about a federal funding decision that appeared to cause a surge in stock trading of several major health companies.

Questions:
1. What healthcare stock surged in the trading of shares?
2. According to the article, what was the global market for criminal-justice-logo-mdworth in terms of revenue in 2009?
3. According to the GAO, why is it difficult to quantify how much political intelligence the Washington information industry sold to clients or the nature of the compensation it received?

Source: Hamburger, T. and D. ElBoghdady (2013) SEC subpoenas firm, individuals in a case of leaked information. The Washington Post, May 1 (Retrievable online at http://www.washingtonpost.com/business/economy/sec-issues-subpoenas-to-political-intelligence-firms-connected-to-leaked-information/2013/05/01/43121794-b290-11e2-bbf2-a6f9e9d79e19_story.html)

JPMorgan Chase: Transition from Model Citizen to Problem Child in the Eyes of the Government

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chaseAccording to The New York Times, government investigators have found that JPMorgan Chase devised “manipulative schemes” that transformed “money-losing power plants into powerful profit centers.” In addition, they allege that one of its most senior executives gave “false and misleading statements” under oath.

Questions:

1. Who is Jamie Dimon; who is Blythe Masters?
2. At least eight federal agencies are investigating the JP Morgan bank. Name two of these and discuss their role.
3. What is the indirect linkage between JPMorgan’s case to the Enron fraud?
4. What is the direct linkage between JPMorgan’s case to the Madoff fraud?

Source:
Silver-Greenberg, J. and B. Protess. (2013). JPMorgan Caught in Swirl of Regulatory Woes, The New York Times, May 2 (Retrievable online at http://dealbook.nytimes.com/2013/05/02/jpmorgan-caught-in-swirl-of-regulatory-woes/?hp)