Mar 13, 2019 | Car Problems Car Complaints
Do you own a Model-Year 2011-14 Chrysler 200 Sedan; Model-Year 2011-14 Dodge Avenger Sedan; Model-Year 2011-12 Dodge Caliber Hatchback; Model-Year 2011-16 Dodge Journey SUV or Model-Year 2011-16 Jeep Compass or Patriot SUV?
If so, you are encouraged to contact Kehoe Law Firm, P.C., Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected], to discuss the investigation.
On March 13, 3019, Cars.com reported that Fiat Chrysler’s recall was due to “[a]n issue with the catalytic converter [which] could adversely affect the vehicle’s emissions and, therefore, pollutants released into the air.”
As reported by The Detroit News on March 13, 2019, “[t]he U.S. Environmental Protection Agency announced Wednesday that Fiat Chrysler is voluntarily recalling 862,520 cars as a result of ‘in-use emissions investigations’ conducted by both the agency and the company. Those investigations, designed to measure the effectiveness of emission control systems in cars after some time on the road, revealed the vehicles were not meeting federal emission standards.”
The Detroit News reported the following vehicles affected by the recall:
2011-2016 Dodge Journey (Front-wheel drive);
2011-2014 Chrysler 200 / Dodge Avenger (Front-wheel drive);
2011-2012 Dodge Caliber (Front-wheel drive, CVT transmission);
2011-2016 Jeep Compass/Patriot (Front-wheel drive, CVT transmission).
Owners of Fiat Chrysler Vehicles Affected by the Recall
If you own one of the vehicles affected by Fiat Chrysler’s recall, please complete the form on the right or contact Michael Yarnoff, Esq., (215) 792-6676, Ext. 804, [email protected], [email protected].
Mar 12, 2019 | Shareholder & Investor Protection
On March 12, 2019, the Securities and Exchange Commission announced charges against Lumber Liquidators Holdings Inc. for making fraudulent misstatements to investors. The charges stem from Lumber Liquidators’ false public statements in response to media allegations that the company was selling laminate flooring that contained levels of formaldehyde exceeding regulatory standards. Lumber Liquidators agreed to pay more than $6 million to settle the SEC action.
The SEC’s order found that in early 2015, Lumber Liquidators, a discount retailer of hardwood flooring, made public statements in response to a “60 Minutes” news program episode that showed undercover video of Lumber Liquidators’ suppliers stating that they provided the company with products that did not comply with regulatory requirements. In its response, Lumber Liquidators, according to the SEC, fraudulently informed investors that third-party test results of its flooring products proved compliance with formaldehyde emissions standards and that it had discontinued sourcing materials from suppliers that were unable to meet these standards. In reality, Lumber Liquidators knew that its largest Chinese supplier had failed third-party formaldehyde emissions testing and was unable to produce documentation showing regulatory compliance. The SEC’s order further found that despite having evidence confirming that the individuals in the “60 Minutes” undercover video were factory employees of its suppliers, Lumber Liquidators falsely stated that its suppliers were not depicted in the video.
Lumber Liquidators consented to the SEC’s order finding that it violated the antifraud provisions in Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Section 13(a) of the Exchange Act and related rules, which require periodic filings with the Commission to contain all material information. In addition to paying more than $6 million in disgorgement and prejudgment interest, Lumber Liquidators agreed to cease and desist from future violations of the charged provisions and cooperate fully with any further investigation, litigation or other proceeding by the Commission staff relating to this matter.
In a parallel criminal action, Lumber Liquidators entered into a deferred prosecution agreement with the U.S. Justice Department’s Fraud Section and the U.S. Attorney’s Office for the Eastern District of Virginia by which Lumber Liquidators agreed to pay $33 million in criminal fines and forfeiture. The Department of Justice agreed to credit the amount paid to the SEC in disgorgement as part of its agreement. Thus, the combined total amount of criminal and regulatory penalties paid by Lumber Liquidators will be $33 million.
Source: SEC.gov
Mar 11, 2019 | Shareholder & Investor Protection
Investment Advisers Who Self-Reported Advisers Act Violations To Compensate Investors and Ensure Adequate Fee Disclosures
On March 11, 2019, the SEC announced that it settled charges against 79 investment advisers who will return more than $125 million to clients, with a substantial majority of the funds going to retail investors. The actions stem from the SEC’s Share Class Selection Disclosure Initiative, which the SEC’s Division of Enforcement announced in February 2018 in an effort to identify and promptly correct ongoing harm in the sale of mutual fund shares by investment advisers. The initiative incentivized investment advisers to self-report violations of the Advisers Act resulting from undisclosed conflicts of interest, promptly compensate investors, and review and correct fee disclosures. The orders issued address advisers who directly or indirectly received 12b-1 fees for investments selected for their clients without adequate disclosure, including disclosures that were inconsistent with the advisers’ actual practices.
The SEC’s orders found that the investment advisers failed to adequately disclose conflicts of interest related to the sale of higher-cost mutual fund share classes when a lower-cost share class was available. Specifically, the SEC’s orders found that the settling investment advisers placed their clients in mutual fund share classes that charged 12b-1 fees – which are recurring fees deducted from the fund’s assets – when lower-cost share classes of the same fund were available to their clients without adequately disclosing that the higher cost share class would be selected. According to the SEC’s orders, the 12b-1 fees were routinely paid to the investment advisers in their capacity as brokers, to their broker-dealer affiliates, or to their personnel who were also registered representatives, creating a conflict of interest with their clients, as the investment advisers stood to benefit from the clients’ paying higher fees.
SEC’s Division of Enforcement’s Share Class Selection Disclosure Initiative
In February 2018, the SEC’s Division of Enforcement announced the creation of the Share Class Selection Disclosure Initiative to address ongoing concerns that, despite the fiduciary duty imposed by the Advisers Act, an OCIE risk alert, Form ADV reminders, and numerous individual SEC enforcement actions, investment advisers were not adequately disclosing, or acting consistently with the disclosure regarding, conflicts of interest related to their mutual fund share class selection practices. These disclosure failures caused harm to investors, particularly retail investors, including being deprived of the ability to make informed investment decisions when purchasing higher-cost share classes. The initiative, which was managed by the Asset Management Unit, enabled investment advisory firms to avoid financial penalties if they timely self-reported undisclosed conflicts of interest, agreed to compensate harmed clients, and undertook to review and correct their relevant disclosure documents. To assist advisers evaluating their eligibility for the initiative, the Division of Enforcement issued answers to frequently asked questions, which provided detailed information about the eligibility of advisers to participate, calculation of disgorgement, and other aspects of the initiative.
The SEC staff is continuing to evaluate self-reports that were received from investment advisers prior to the initiative cut-off date.
Settlement Terms
The SEC’s orders found that the settling investment advisers violated Section 206(2) and, except with respect to state-registered only advisers, Section 207 of the Investment Advisers Act of 1940 by:
- Failing to include adequate disclosure regarding the receipt of 12b-1 fees; and/or
- Failing to adequately disclose additional compensation received for investing clients in a fund’s 12b-1 fee paying share class when a lower-cost share class was available for the same fund.
Without admitting or denying the findings, each of the settling investment advisers consented to cease-and-desist orders finding violations of Section 206(2) and, except with respect to state-registered only advisers, Section 207. The firms also agreed to a censure and to disgorge the improperly disclosed fees and distribute these monies with prejudgment interest to affected advisory clients. Each adviser has also undertaken to review and correct all relevant disclosure documents concerning mutual fund share class selection and 12b-1 fees and to evaluate whether existing clients should be moved to an available lower-cost share class and move clients, as necessary. Consistent with the terms of the initiative, the SEC has agreed not to impose penalties against the investment advisers.
Firms Charged by the SEC
Source: SEC.gov
Feb 27, 2019 | Overtime & Wages
Under the Fair Labor Standards Act (“FLSA”), Can Uniforms or Other Items Primarily for the Benefit of the Employer Be Included as Wages?
The FLSA does not allow uniforms, or other items which are considered to be primarily for the benefit or convenience of the employer, to be included as wages. Thus, an employer may not take credit for such items in meeting his/her obligations toward paying the minimum wage or overtime.
FLSA Requirements for Uniforms and Other Items
Uniforms: The FLSA does not require that employees wear uniforms; however, if the wearing of a uniform is required by some other law, the nature of a business, or by an employer, the cost and maintenance of the uniform is considered to be a business expense of the employer. If the employer requires the employee to bear the cost, it may not reduce the employee’s wage below the minimum wage of $7.25 per hour effective July 24, 2009 – nor may that cost cut into overtime compensation required by the FLSA.
For example, if an employee who is subject to the statutory minimum wage of $7.25 per hour (effective July 24, 2009) is paid an hourly wage of $7.25, the employer may not make any deduction from the employee’s wages for the cost of the uniform nor may the employer require the employee to purchase the uniform on his/her own. However, if the employee were paid $7.75 per hour and worked 30 hours in the workweek, the maximum amount the employer could legally deduct from the employee’s wages would be $15.00 ($.50 X 30 hours).
The employer may prorate deductions for the cost of the uniform over a period of paydays provided the prorated deductions do not reduce the employee’s wages below the required minimum wage or overtime compensation in any workweek.
Other Items: Employers at times require employees to pay or reimburse the employer for other items. The cost of any items which are considered primarily for the benefit or convenience of the employer would have the same restrictions as apply to reimbursement for uniforms. In other words, no deduction may be made from an employee’s wages which would reduce the employee’s earnings below the required minimum wage or overtime compensation.
Some examples of items which would be considered to be for the benefit or convenience of the employer are tools used in the employee’s work, damages to the employer’s property by the employee or any other individuals, financial losses due to clients/customers not paying bills, and theft of the employer’s property by the employee or other individuals. Employees may not be required to pay for any of the cost of such items if, by so doing, their wages would be reduced below the required minimum wage or overtime compensation. This is true even if an economic loss suffered by the employer is due to the employee’s negligence.
Employers may not avoid FLSA minimum wage and overtime requirements by having the employee reimburse the employer in cash for the cost of such items in lieu of deducting the cost from the employee’s wages.
Examples of Employee Reimbursement Issues
A minimum wage employee working as a cashier is illegally required to reimburse the employer for a cash drawer shortage.
An employer improperly requires tipped employees to pay for customers who walk out without paying their bills or for incorrectly totaled bills.
An employer furnishes elaborate uniforms to employees and makes them responsible for having the uniforms cleaned.
An employee driving the employer’s vehicle causes a wreck, and the employer holds the employee responsible for the repairs, thereby reducing the employee’s wages below the minimum wage.
A security guard is required to purchase a gun for the job, and the cost causes him/her to not earn the minimum wage.
The cost of an employer-required physical examination cuts into an employee’s minimum wage or overtime.
Source: U.S. Department of Labor. According to the Department of Labor, the aforementioned is for general information and is not to be considered in the same light as official statements of position contained in regulations.
Feb 27, 2019 | Consumer Protection, Employment & Technology Archive
The U.S. Department of Labor recently announced that two Philadelphia restaurants J.H.S.K, Inc. and Osaka Japan Restaurant, Inc., both doing business as Osaka, and their owner, have agreed to a consent judgment ordering them to pay $935,000 in back wages and liquidated damages to 201 employees for willful violations of the minimum wage and overtime requirements of the Fair Labor Standards Act (FLSA). The employers must also pay a $65,000 civil money penalty. The consent judgment, according to the Department of Labor, must be approved by the U.S. District Court for the Eastern District of Pennsylvania.
The employers agreed to the $1 million settlement midway through the first day of a weeklong bench trial. The consent judgment permanently enjoins the employers from violating the FLSA in the future.
Investigations conducted by the U.S. Department of Labor’s Wage and Hour Division (“WHD”) exposed willful violations of the FLSA at the Osaka restaurants in Philadelphia and Lansdale, Pennsylvania.
According to the Department of Labor, WHD investigators determined that from at least September 1, 2013, the employers deducted and pocketed 15 percent of customer tips charged on credit cards, well in excess of the 4 percent fee charged by credit card processors.
The employers also failed to notify tipped employees, including servers, bartenders, bussers, and hosts, that the restaurants were claiming a portion of their customer tips as a credit toward the minimum wage, which is required under the FLSA. Because the employers claimed the tips as a “credit” for the difference between the employees’ actual hourly wages and the $7.25 full minimum wage, these actions meant that the employers failed to comply with the FLSA’s tip credit requirements and therefore violated the FLSA’s minimum wage requirement.
Additionally, according to the Department of Labor, the employers violated the FLSA’s overtime provisions since at least September 1, 2013. The employers failed to pay employees the proper time-and-a-half overtime premium for work beyond 40 hours per week. Hourly tipped employees received straight time for all hours worked, even when their time records clearly showed them working more than 40 hours. The employers also paid sushi chefs, hibachi chefs, kitchen cooks, and dishwashers flat daily rates ranging from $80-$150 for all hours worked, even when their time records clearly showed them working upwards of 50-60 hours per week. The company also failed to maintain records required by the FLSA.
The FLSA requires that covered, nonexempt employees be paid at least the minimum wage of $7.25 per hour for all hours worked, plus time and one-half their regular rates, including commissions, bonuses and incentive pay, for hours worked beyond 40 per week. Employers also must maintain accurate time and payroll records.
Source: U.S. Department of Labor
