Business, Finance, & Economics: January 2009 Archives

A Microsoft marketing scheme persuading consumers to buy PCs "capable" of running Windows Vista could cost more money than Microsoft made from the program. University of Washington Associate Economics Professor Keith Leffler gave evidence in the class-action suit against Microsoft's Windows Vista Capable program and estimated the cost of upgrading so-called "capable" PCs to machines able to run premium editions at between $3.08bn and $8.52bn.   The economics expert arrived at the numbers after he was asked by plaintiffs in the case to calculate the impact of the program on the demand and prices of PCs and judge whether there had been an adverse impact on consumers.  ChannelRegister.com also reports:

At the crux of the case is the question of whether Microsoft deliberately mislead consumers who bought a Windows Vista "capable" machine into thinking they could install the full operating system. Windows Vista Capable got you a machine able to run the stripped down basic editions such as Home Basic, but not the premium-edition Windows Vista Ultimate.

Boston University law professor Tamar Frankel testified as a fraud expert before Congress Jan. 5 in the first SEC hearing regarding Bernard Madoff’s alleged Ponzi scheme. "Some [money] will be recovered no doubt. The question is how much, and from whom,” she said. BU journalism professor Mitchell Zuckoff, author of the biography Ponzi’s Scheme: The True Story Of A Financial Legend, said Madoff built up a reputation as a brilliant investor. “They thought they were getting the great opportunity of a lifetime investing in him,” he said.  DailyFreePress.com also writes:

The SEC’s failure to catch Madoff’s alleged scheme earlier is under fire, but it is not clear whether all blame should be laid on the SEC, Frankel said However, Zuckoff said he has no doubt the SEC failed.

“There is no question in my mind the Securities and Exchange Commission did not do its job,” Zuckoff said. Madoff’s prominent position as former Nasdaq chairman made a thorough investigation of his actions difficult, Frankel said.  “You don’t take a person like that and put him under the light and interrogate him,” she said. “So he was questioned with kid gloves.”

Boston University law professor Tamar Frankel testified as a fraud expert before Congress Jan. 5 in the first SEC hearing regarding Bernard Madoff’s alleged Ponzi scheme.  Frankel has been working to bring what may prove to be an elaborate fraud to light by contributing her expertise in Ponzi schemes.  Authorities arrested Madoff at his New York City office on Dec. 11 and charged him with securities fraud for orchestrating a Ponzi scheme.

Named after Charles Ponzi, a conman in the 1900s, a Ponzi scheme pays early investors off with funds from new investors. The former Nasdaq stock exchange chairman and founder of Bernard L. Madoff Investment Securities LLC’s scheme ended when investors began to request funds from his firm because of the recession.

Excerpted from DailyFreePress.com.

Twenty-nine franchisee-plaintiffs are set to go to trial in Georgia against Mama Fu's Pan-Asian restaurant chain and executives H. Martin Sprock, III and Daryl Dollinger charging fraud, breach of contract, breach of duty of good faith and fair dealing, negligent misrepresentation, breach of implied contract, violations of the Florida Franchise Act and the Robinson-Patman Act.

Franchisees are asking that the court appoint a temporary receiver to take possession of Mama Fu's franchise property.  According to franchise expert Michael Seid, the information given to franchisees in Mama Fu’s disclosure documents was "false, misleading and omitted important and required information."  The expert stated "It is not the purpose of a franchisee's due diligence to discover factual misrepresentation in a UFOC (now called the franchise disclosure document), franchise agreement or sales presentation. They should be entitled to rely upon their veracity."

Excerpted from BlueMauMauFranchise News.