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There exists a tension between older and younger generations, which is perhaps no more accentuated than in the competitive world of corporate finance. Multinational bank, Citibank, is currently defending a claim of alleged age discrimination, after a restructure of its London-based energy and natural resources practice in 2017 resulted in the dismissal of its former managing director.

Initially awarded ₤2.7 million by an employment tribunal, the director will need to continue the fight as his former employer, Citibank, successfully had the ruling overturned. An appellate panel in the United Kingdom determined that the case be reheard, ruling that the tribunal had not taken sufficient account of the fact that the director’s replacement was only marginally younger than himself.

The tribunal’s original decision relied on evidence that the director’s supervisor referred to him as “old and set in his ways” and highlighted the need for a person in his position to be more agile. The Citibank supervisor denied making the remarks but the tribunal found that in fact he had. This point of contention was not addressed in the appeal, despite the decision being overruled.

The matter shines a spotlight on the risk of prejudice in the workplace, particularly with respect to age. As organisations encourage innovation in response to a quickly changing marketplace, there is increasing pressure on employees to adapt to new ways of doing things. Many older professionals feel that a creeping culture culture of ageism may be forcing them into early retirement.

The challenges faced by Citibank reflect broader trends occuring throughout corporate finance. In 2020, the global accounting firm, PricewaterhouseCoopers, settled a $11.6 million class action discrimination suit. In addition to a settlement shared among 5,000 applicants, the company committed to a program focused on improving outcomes for older entry-level employees.

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An in-house lawyer who for many years was responsible for overseeing the Apple Inc insider trading policy has admitted to using privileged financial information for illegal personal gain. The lawyer, a former director of corporate law across the company’s global operations, has pleaded guilty in a United States federal court to six counts of securities fraud over a five year period.

According to the complaint, the lawyer deceived one of the world’s largest tech companies for his own financial advantage. By misappropriating draft regulatory filings for his own use and transacting Apple stock held in personal brokerage accounts, he was able to make over $227,000 in profits and avoid $377,000 of losses, for a total illegal benefit of $604,000.

As former co-chairman of Apple’s disclosure committee, the lawyer was permitted to review the company’s confidential financial statements before they were submitted to the Securities and Exchange Commission (SEC) for approval. Even after telling other employees that trading within a designated blackout period was strictly prohibited, it is alleged he did so himself on several occasions.

In defence, the lawyer claimed the charges were unconstitutional, and that no legislation specified that insider trading was illegal. This argument, dubbed a ”Hail Mary” by prosecutors, was promptly quashed by the court. Sentencing is due to take place later this year, with each charge carrying a maximum penalty of 20 years in prison and a fine of between $250,000 and $5 million.

As a graduate of Stanford Law School, the lawyer joined Apple at the time of the iPhone’s release, rising to become a senior legal advisor reporting directly to general counsel. Despite this relative success, it appears he was unable to resist the temptation of trading on inside knowledge to improperly advance his Apple shareholding, estimated to be valued at $10 million.

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Oil production and storage is a risky business; and not just with respect to bodily injury and property damage, but also the financial health of a company itself. This is a reality currently being experienced by Shebah Exploration and Production Co, after the company’s oil storage vessel caught fire in Nigerian waters and was destroyed with up to 60,000 barrels of oil on board.

The vessel, Trinity Spirt, erupted in flames in early February 2022, reportedly killing a number of its crew. While the cause of the accident is yet to be determined, according to Nigeria’s national oil spill detection and response agency, the amount of crude contaminating the water was less than initially expected due in large part to the size of the fire.

Unfortunately, the incident has exasperated a number of existing challenges for Shebah, as creditors file lawsuits against the corporate entity and its directors. The claimants have accused the company and key personnel of defaulting on multiple financial agreements, including two bank loans for a combined $220 million, as well as a contract for the vessel’s ongoing management.

According court documents, Shabah’s president acted as the personal guarantor of a $150 million loan taken by the company to fund a drilling program on its permit, “Oil Mining Lease 108”. Shabah had previously acquired a 40% interest in this permit from ConocoPhillips, an oil exploration and production company headquartered in the United States.

Trinity Spirt was first launched in 1976 as an oil tanker, before being reconfigured for oil storage in 1997. According to reports, Shebah leased the vessel from one of its shareholders, Allenne, a company which also shared common managerial control. Allenne had previously acquired the vessel from ConocoPhillips, at the same time the oil licence was acquired by Shabah.

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The retail industry has been challenged for some years now, not only because of increasing digitisation but also increasing inflationary pressures, as highlighted by a recent lawsuit against Starbucks by the US Labour Board. The company is being asked to reinstate a group of activist employees by labour officals in federal court, following allegations of employment retaliation.

According to the complaint, Starbucks retaliated against the three employees because of their union involvement, as well as their participation in a regulatory investigation. The claim seeks an injunction requiring the reinstatement of effected employees, and comes in response to dozens of allegations made against the company by unions, of which prosecutors have found merit in some.

With union campaigning surging through Starbucks stores, the lawsuit escalates the battle between the company and its employees. Beginning in 2021, a number of the company’s baristas, referred to as ”partners”, commenced unionisation into an affiliate of the Service Employees International Union, which petitions on behalf of thousands of employees across the country.

In response, Starbucks has announced it does not agree with the labour board’s claims and that any claims of anti-union activity are categorically false, with employees right to organise being respected. Furthermore, the company reiterated that policies have been implemented to protect all stakeholders, and to ensure that its workplaces are welcoming and safe.

Starbucks was founded in 1971 as a coffee bean roaster and equipment retailer. Since its modest beginnings as a corner shop in downtown Seattle, the company has grown into a network of over 30,000 coffee houses in 84 countries across the world. Impressively, it continues to increase both revenue and profit despite the headwinds experienced by the sector at large.

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The ability to market products and services direct to consumers has rarely been more accessible than with smartphones. However, as privacy concerns increase, the age of unrestrained digital marketing may be over, as evidenced by a recent shareholder lawsuit against Meta Platforms after changes to the Apple iOS ecosystem led to a significant profit downgrade.

Meta is the holding company of Facebook, the social network whose business model relies on leveraging the personal data of its users to deliver targeted advertising. As this model comes under pressure, however, the company has forecast a $10 billion reduction in revenue shortly after reassuring investors that the impact of Apple’s iOS privacy tweaks were manageable.

The complaint, brought by the Plumbers and Steamfitters Local 60 Pension Trust in a United States federal court, alleges that Meta executives failed to inform shareholders that their efforts in mitigating Apple’s iOS privacy changes were failing, and that management painted a false and misleading picture of their ability to rebuild the company’s advertising business.

Meta and many other technology companies are revisiting their core assumptions following Apple’s decision that app developers be required to seek permission from users before they are tracked. These changes have seen users opt out of cookies and other cross-app tracking methods, thereby reducing the effectiveness digital marketing, as well as its profitability.

In 2021, Facebook rebranded as Meta Platforms to reflect the company’s shifting focus towards building the metaverse as a digital extension of the physical world. While this vision of the future is ambitious, it does seem clear that some shareholders are equally concerned about the present, and how a changing privacy landscape may undermine the value of their investment.

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When Virgin Galactic listed on the on the New York Stock Exchange in 2019, its management did not likely envisage the extent of the challenges they lay before them. Some of these unforeseen difficulties appear to have materialised, with the company suing its own directors and officers in a shareholder derivative lawsuit for alleged breaches of fiduciary duty.

According to the complaint initiated by shareholders, Virgin Galactic‘s chairman allegedly took unfair advantage of his role to sell 10 million shares for $315 million before unexpectedly quitting the board. It is also alleged that a high profile shareholder of the company pocketed $301 million by capitalising on a period of good news in which to sell stock at a temporarily inflated price.

The space travel company has been struggling as of late, largely as a result of an investigation into potential defects of its spacecraft which have delayed commercial flights until late 2022. According to the United States federal court filing, Virgin Galactic management were allegedly aware of these potential defects for up to three years prior to their public disclosure.

Unfortunately, it is not the first time that Virgin Galactic executives have been accused of misleading investors. While the company has promoted successful flights of its Eve and Unity spacecraft, some stakeholders argue that these vehicles are more accurately described as “rudimentary prototypes”, citing a lack of engineering documentation and errors in design.

Originally founded in 2004, Virgin Galactic received regulatory approval to fly customers into space in 2021. Today, the company has stated its intention to commence commercial flights by the end of this year, with a reported waiting list of 750 customers who have placed deposits for a 90 minute return journey priced at the modest sum of $450,000 per ticket.

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Building a world changing company that dominates an entire market is no easy task. But imagine doing such a good job of it that your shareholders are concerned with the consequences. This is the challange faced by Alphabet, the holding company of Google, as it faces an antitrust related claim brought by its shareholders in the form of a derivative class action lawsuit.

The complaint alleges that Alphabet is likely to accrue significant antitrust liabilities, and is at risk of being broken up by regulators. The founding directors of the company, Sergey Brin, Larry Page and Eric Schmitt, are accused of exerting undue influence on corporate governance, resulting in breaches of fiduciary duty, unjust enrichment, and corporate waste.

The lawsuit has arisen in the wake of Alphabet coming under increasing regulatory scrutiny, culminating in numerous claims initiated by government and private interests. Each lawsuit shares a common theme, ensuring that the company’s management have in place adequate checks and balances to maintain transparent and responsible business practices.

Alphabet was established in 2015 as a holding company of Google and a number of related enterprises, such as the Android mobile operating system and Google Play store. The purpose behind its creation was to clean up the group’s existing governance structures, and ensure that its various units remain sufficiently accountable to stakeholders as a whole.

As our society becomes further digitised, the centralisation of information is a concern shared by many. The recent lawsuits faced by Alphabet indicate that it is not just regulators that have an active interest in ensuring that appropriate controls are in place, but also shareholders who will experience equally the risks and rewards of innovation.

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When Beny Steinmetz was detained in Greece on an international arrest warrant, it came as somewhat of a surprise. The Israeli billionaire, who arrived by private jet into Athens, had previously been convicted of bribery in Romania and Switzerland. However, according to his lawyer, the detention was unexpected, and an error of the European Police authority, Interpol.

Steinmetz made his money in the diamond trade, before securing the rights to the Simandou mine in Geneva, the world’s richest untapped iron-ore deposit in Guinea. This investment should have been his crowning glory but instead it sparked years of legal headaches that culminated in a European court conviction for bribing Guinean officials.

The verdict was a major blow to Steinmetz, who is now fighting multiple legal battles around the world relating to the West African mine, which was first acquired in 2008. The asset was stripped from him in 2012, amid allegations of paying bribes of $8.5 million to Mamadie Toure, the wife of Guinea’s former president Lansana Conte, who himself is now deceased.

The way in which he was convicted provides some insight into the risk of conducting business abroad. Judge Banna suggested that making a profit of billions from an initial investment of $160 million was in itself sufficient evidence of corruption, adding in her closing remarks; “the fact that Steinmetz wasn’t aware of all details doesn’t change a thing.”

At the time of his conviction, Steinmetz’s lawyer said the five year jail sentence would be appealed because Steinmetz never took part in bribery and the court didn’t properly consider the fragility of the testimony against him. However, for the moment Steinmetz must remain in Greece, as it may take 90 days for a court hearing to address the Interpol discrepancy.

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Families have created of many of the world’s most successful businesses. No matter how successful, however, a family involved in business is not immune from breakdown. Unfortunately, this possibility has become reality for the well-known Hinduja family, who find themselves at the centre of a series of lawsuits, as recently reported by Bloomberg.

Founded by Parmanand Hinduja in 1914, in the Sindh region of British India, the one-time commodities-trading firm was rapidly diversified by his four sons, with early success coming from distributing Bollywood films outside India. Now in London, the family is neighbours with Queen Elizabeth, their Carlton House Terrace a short stroll away from Buckingham Palace.

With a collective net worth of about $15 billion, the Hinduja brothers have always presented a united front, with little to suggest a divergence in philosophy. With dozens of companies, including six publicly traded entities in India, the closely held Hinduja Group employs more than 150,000 people in 38 countries, across truck-making, banking, chemicals, power, media and healthcare.

What was once a steadfast business empire, however, is now on the precipice of evolution. Karam Hinduja, the 31 year old grandson of the eldest brother, Srichand Hinduja, is now asking for the once unthinkable – that the group’s assets be broken up. The young and ambitious entrepreneur wishes to establish his own vision of the future, independent of the past.

As lawsuits pile up in the courts of London and Switzerland over control of the group, Srichand and his brothers Gopichand, Prakash and Ashok cling to the family motto, “everything belongs to everyone and nothing belongs to anyone.” But the conglomerate of 107 years may be about to encounter one of life’s ancient lessons, that the only constant is change.

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Being a successful entrepreneur often means imagining what the future could be like and convincing others of your vision. It takes big ideas and bold action to change status quo. However, there is a fine line between enthusiasm and fraud, a topic being explored in the trial of Elizabeth Holmes, the charismatic founder and CEO of failed medical device company, Theranos.

According to charges laid by the US Government, it is alleged that Holmes, along with her former partner and company CFO, Ramash Balwani, engaged in a multi-million dollar scheme to defraud the company’s investors, as well as doctors and patients. Prosecutors claim that the two promised to revolutionize health care, but profited from misleading and deceptive conduct.

The complaint, being tried in the US District Court, addresses two primary areas of concern. The first is that Holmes and Balwani used advertisements and solicitations to encourage and induce doctors and patients to use Theranos blood testing technology, even though they knew that the devices were not capable of consistently producing accurate and reliable results.

The second is that Holmes and Balwani made numerous misreprestations to potential investors about the financial condition of the company and its future prospects. For example, it is alleged that patient tests were represented as having being completed with proprietary technology, when in fact, these tests were conducted from other commercially-available sources.

It is well known that Holmes tried to established a reputation as a hard-charging entrepreneur, and in many ways she succeed. Theranos peaked at a valuation of $9 billion in 2014 before media and regulatory scrutiny drove it to ruin less that four years later. Balwani, who will be tried separately next year, has pleaded not guilty to the charges, and also denies manipulating Holmes.

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In business, it isn’t always easy to strike a balance between developing a product that is safe and effective, while also maintaining financial viability. Aeronautical engineering is no expectation, and this has been emphasised by a recent agreement of Boeing’s directors to settle a claim against them for $237 million, arising from allegations of mismanagement.

The derivative class action lawsuit led by some of Boeing’s largest shareholders, such as New York’s pension fund for government employees, alledges that the company’s directors breached their fiduciary duties by dismantling Boeing’s much lauded safety-engineering corporate culture in favour of one that prioritised financial-engineering and short term incentives.

The claim arose in the wake of two incidents involving Boeing’s newest plane, the 737 MAX, after 346 people were killed within a five month period in 2019. The incidents, occurring in Ethiopia and Indonesia, were attributed to a flight control system that relied on a single sensor that failed, leading to the deaths and worldwide groundings of the planes by regulators.

According to a draft release, which is yet to be approved by the courts, much of the $237 million settlement is expected to be made by Boeing’s insurers. In addition, the company is likely to adopt a number of changes to address the cultural concerns raised, including the appointment of an internal ombudsman, as well as adding engineering and safety experts to its board.

The FAA eventually cleared the 737 MAX to return to service in late 2020, after Boeing took significant actions to reinforce its commitment to safety. Tom DiNapoli, whose office led the lawsuit, said “this settlement will send an important message that directors cannot shortchange public safety and other mission critical risks”. The matter is likely to be settled without an admission of wrongdoing.

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Running a public company is a tough job. There are a million and one things that can go wrong, and often the only thing standing in the way of a potential problem is quality risk controls. PayPal has recently found this out the hard way, after the company was sued by shareholders over an alleged lack of controls amid an investigation into its affairs by regulatory authorities.

In a class action lawsuit filed in the United States, PayPal is accused of hiding its compliance oversight in annual reports over a number of years. Its shareholders claim that they have suffered losses after the company’s share price fell 6% following disclosures that it had been cooperating with a regulatory probe into its credit and debit card programs.

More specifically, PayPal advised that the Securities and Exchange Commission (SEC) had been looking into whether its marketing revenues had been correctly disclosed, and the issuance of branded payment cards complied with regulations governing interchange fees. Interchange fees, which can account for more than 2% of each transaction, have drawn much attention as of late.

Unfortunately for PayPal, its issues became even more acute after releasing a forecast for the remainder of the financial year which was materially lower than expected. The driver of this gap in expectations was predominately the company’s changing relationship with online marketplace, eBay, who has recently decided to no longer use PayPal as its primary payments processor.

The reporting obligations imposed on public companies are known to be onerous. Nevertheless, the takeaway from PayPal’s experience is clear. Shareholders care about the value of their investments, and will go to lengths to protect the integrity of a company’s affairs. Management should aim to communicate failure just as clearly as success, or else expect to be held accountable.

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The video game industry attracts a lot of media attention, and is a significant influence on popular culture. Riot Games, the publisher of successful eSports video game, League of Legends, is the latest company to make headlines, albeit in circumstances that are far from flattering. Nevertheless, it will allow us to reflect on some of the challenges in the modern workplace.

Riot Games CEO has found himself at the centre of a sexual harassment claim, filed by an ex-employee and former personal assistant. The details of the allegations are serious, but highlight how the interactions between a company’s management and employees can quickly deteriorate if professional boundries are not appropriately set and respected.

Corporate culture can be difficult to measure, but certainly counts for a lot in employment-related matters. This is especially true in high-performing companies such as Riot, where a single video game release can earn upwards of $1.6 billion. However, success left unmitigated can lead to the tolerance of behaviour that would otherwise be deemed unacceptable.

Accordingly, few may be surprised to learn that Riot has a checkered history in terms of culture, again placing the interactions of men and women at the forefront. The company has taken steps to address these issues, including a $10 million class action settlement with 1,000 of its female employees. Despite this initiative, given the latest incident there appears further work to do.

Companies should of course aim to cultivate amicable relationships between employees. In doing so, an organisation’s management, and CEO in particular, must lead by example. Since the allegations have been raised, an internal review has been completed with a special committee finding no evidence of wrongful behaviour. The litigated matter currently remains pending.

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There is little doubt that electric vehicles are the hot topic of the day. Everyone from Tesla to Volkswagen to Toyota to BMW wants to get in on the future of transport. Another company trying to stake its claim is Nikola Motors, founded in 2015 with the ambitious goal of manufacturing commercial trucks that run on alternative fuel with low or zero carbon admissions.

Nikola’s founder and largest shareholder has recently found himself at the centre of attention, but probably not in a way that he intended. He is subject to a claim by the United States Securities Commission (SEC) for fraud. The charges revolve around allegations of deceiving retail investors about the technical advancement of his company’s products through social media.

Anyone who has been keeping tabs on popular social media platforms like Twitter will not be surprised to hear about such shenanigans. Tesla Motor’s CEO, for example, is well known for being able to move the price of a stock, amongst other things, at the click of a button. In this instance, it appears that Nikola’s founder may also have been a bit too enthusiastic while marketing his company’s brand.

There’s nothing wrong with a bit of self-promotion provided it is done within the rules. According to the SEC, Nikola’s founder was obligated under securities law to communicate “completely, accurately, and truthfully.” Whether this occurred is yet to be determined. What is not in doubt, however, is that he raised over $1 billion from investors using a special purpose acquisition company (SPAC).

Nikola Tesla (1856–1943), was a Serbian-American inventor and engineer, most famously known for his innovations in electric power. While the world of electric vehicles is certainly exciting and holds much potential for the future, many of the ventures marketed by the likes of Nikola’s founder may not be quite what the company’s namesake would wish to be associated with – at least not yet.

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