The 2007-2009 Financial Crisis: An Erosion of Ethics - A Case Study

This case study examines five dimensions of the 2007-2009 financial crisis in the United States: (1) the devastating effects of the financial crisis on the U.S. economy, including unparalleled unemployment, massive declines in gross domestic product (GDP), and the prolonged mortgage foreclosure crisis; (2) the multiple causes of the financial crisis and panic, such as the housing and bond bubbles, excessive leverage, lax financial regulation, disgraceful banking practices, and abysmal rating agency performance; (3) the extraordinary efforts of the Federal Reserve, the Federal Reserve Bank of New York, and the Department of the Treasury to stem the financial freefall triggered by the crisis and resuscitate financial institutions, (4) the ethical implications of the unprecedented actions by government institutions to rescue financial institutions and drag the country back from the brink of global financial collapse, and the conduct of the various parties contributing to the financial crisis, such as the shoddy behavior of mortgage brokers, the massive securitization of mortgages into overly complex bonds, the excessive leverage of financial institutions, the disgraceful work of bond rating firms, the abysmal risk management systems employed by financial institutions, and the massive operations of the shadow banking and over-the-counter derivatives markets; and (5) the major provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act signed into law to in response to the financial crisis and for the purpose of correcting the egregious conduct of major financial institutions

Masterpiece Cakeshop: A Case Study Brought to You by the U.S. Supreme Court

In Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Commission,[1] the U.S. Supreme Court ruled seven to two that the Colorado Civil Rights Commission (“the Commission”) violated the free exercise rights of a baker, who refused to sell a custom-designed wedding cake to a gay couple, by reflecting hostility toward the baker’s religious beliefs during public hearings in the case and treating him differently from three other bakers who objected to creating wedding cakes with messages expressing derogatory views of same-sex marriage.[2] In reaching its decision, the Court sidestepped the chore of reconciling two fundamental principles: (1) whether the baker’s refusal to create a wedding cake for a same-sex marriage reception was protected by his First Amendment rights to free exercise of religion and against compelled speech, and (2) whether Colorado has authority to protect the rights and dignity of gay people who seek to purchase goods and services for their wedding through its anti-discrimination statute.[3] Instead, the Court ruled the Commission violated its obligation to consider the baker’s sincere religious objections with “the requisite religious neutrality that must be strictly observed.”[4] In doing so, the Court acknowledged it postponed the reconciliation of the protections of free exercise of speech and religion and the protection against discrimination on the basis of sexual orientation to future cases, which “must be resolved with tolerance, without undue disrespect to sincere religious beliefs, and without subjecting gay persons to indignities when they seek goods and services in an open market.”[5] [1] Masterpiece Cakeshop, Ltd. v. Colorado Civil Rights Comm’n, 138 S. Ct. 1719 (2018). [2] Id. at 1729-32. The facts of the Masterpiece Cakeshop case are examined in Part II. Justice Kennedy wrote the majority opinion in which Chief Justice Roberts and Justices Breyer, Alito, Kagan and Gorsuch joined. Justice Thomas filed an opinion concurring in part and concurring in the judgment in which Justice Gorsuch joined. Justice Kagan filed a concurring opinion in which Justice Breyer joined. Justice Gorsuch filed a concurring opinion in which Justice Alito joined. Justice Ginsburg filed a dissenting opinion in which Justice Sotomayor joined. [3] Debra Cassens Weiss, Supreme Court Cites Agency Hostility in Ruling for Christian Baker, ABA Journal (June 4, 2018), http://www.abajournal.com/news/article/supreme_court_rules_for_christian_ baker_who_refused_cake_ for_gay_wedding_ci/?utm_source=maestro&utm_medium=email&utm_campaign=weekly_email. [4] Masterpiece Cakeshop, 138 S. Ct. at 1731. Weiss, supra note 4. [5] Id. at 1732. Another reported case dealing with a wedding vendor who refused to sell a wedding cake to a same-sex couple is In the matter of: Melissa Elaine Klein, dba Sweetcakes by Melissa, Case Nos. 44-14 & 45-14 (Oregon Bureau of Labor and Industries) (Order dated July 2, 2015), accessed on July 16, 2018 at https://www.oregon.gov/boli/SiteAssets/pages/press/Sweet%20Cakes%20FO.pdf, in which: (n.b. this link works) Sweetcakes by Melissa, an Oregon bakery, refused to make a wedding cake for a same-sex couple based on the owners\u27 religious convictions about marriage. The couple filed a complaint with the Oregon Bureau of Labor and Industries, and the ALJ determined the bakery\u27s refusal to make a wedding cake for the couple constituted discrimination based on their sexual orientation, which is prohibited by Oregon\u27s public accommodation law. The ALJ ordered Sweetcakes by Melissa to pay $135,000 in damages to the couple for emotional and mental suffering resulting from the denial of service. The bakery\u27s owners are challenging the Oregon Bureau of Labor\u27s decision in the Oregon Court of Appeals as a violation of their freedom of religion, arguing the First Amendment\u27s protection of religious liberty prohibits such a ruling. Specifically, on appeal, the owners argue the decision violates their rights as artists to free speech, their rights to religious freedom, and their due process rights. It is worth noting, however, that Sweetcakes by Melissa recently closed the bakery. L. Darnell Weeden, Marriage Equality Laws Are a Threat to Religious Liberty, 41 S. Ill. U. L.J. 211, 218-20 (2017)

Completing Government Speech\u27s Unfinished Business: Clipping Garcetti\u27s Wings and Addressing Scholarship and Teaching

This article examines two major developments stemming from the U.S. Supreme Court decision in Garcetti v. Ceballos, in which the Court ruled: Statements made by public employees pursuant to their official duties are not protected by the First Amendment. Furthermore, the Court disclaimed whether or not its ruling applied to scholarship of teaching. First, this decision has triggered an avalanche of circuit court decisions dismissing 42 U.S.C. § 1983 employment retaliation claims, because the courts usually determined the expression was derived from the government employee\u27s actual duties. Second, the disclaimer has created inconsistency and doubt in assessing § 1983 public worker employment retaliation claims pursued by faculty members at public colleges and universities

Par Funding: A Fabulous Fraud Founded in Philly

This case describes a recent iteration of the Ponzi scheme originated in 1920 by Charles Ponzi: creating a plausible investment, attracting investors, using the money from more recent investors to pay off earlier investors, and earning a substantial profit, estimated to be $15 million (worth$220 million today).1 While not as big as Bernie Madoff’s Ponzi scheme, as a result of which he was sentenced to 150 years in prison and ordered to pay restitution of $170 billion to his victims,2 the Federal district court in Miami was asked to order Par Funding’s cofounders, Joseph W. LaForte and his wife, Lisa McElhone, to pay$337 million to Par Funding investors and to declare they engaged in a Ponzi scheme in defrauding those investors.3 Ultimately the Federal district court in Miami ordered Par cofounders to pay “$219 million in ‘ill-gotten gains,’ fines and interest so the funds can be used to help reimburse 1,200 investors who were duped into buying the risky, unregistered securities used to finance the high-fee loan company.”4 How LaForte and McElhone executed their scheme is an intriguing story which provides helpful insight into ethical and U.S. securities law principle