Small Business Crimes and Scams - Free Enterprise
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Corporation Basics: Piercing the Veil and Personal Responsibility

You did your research before going into business, so you know that incorporation protects your personal assets if your business is sued. A corporate officer is not personally liable for the actions of the business, and that is one major reason to incorporate.

This protection is called the corporate veil. But there are situations in which this veil is lifted, or pierced, and liability can attach to individuals. Let's look at examples, as described in the San Francisco Chronicle, of things to avoid doing and not doing so that you stay personally protected.

How to Protect Your Small Business From Embezzlement

Embezzlement occurs in all kinds of businesses, even schools, and the people who do it might surprise you. For example, today the Associated Press reports that a Vermont school principal has been arrested for embezzlement, and local police say they found items in his home that were purchased using school funds.

People steal from all kinds of businesses, even (and sometimes especially) if they hold positions of authority and responsibility, and they do it in a wide range of ways. There is no absolute protection from embezzlement for your business but you can pay attention to some things that will certainly help to prevent it. Here are tips suggested by Entrepreneur that will get you on the right track.

3 Simple Ways to Keep Your Business Safe From Data Breaches

Even if you aren't doing business online, it would be hard to find a business today that doesn't rely on the Internet or exist on the web in some form. As such, cyber security is an increasing concern for businesses and individuals.

The cost from a data loss could be high indeed and you do need to be paying attention to a number of security issues. Here are three simple tips, reported by CIO, to help you to ensure your business's electronic safety.

Beware Ransomware: 3 Simple Electronic Security Tips for Your Business

As a business owner, you know you have to stay on top of a lot of different things. But how much thought do you give to electronic security and scams? If you are not considering this now, you might have to when you find yourself separated from a lot of valuable data while the information is held ransom by hackers.

According to the Associated Press, electronic ransom is all the rage, with hackers increasingly demanding bitcoin payments from unwary users who open their "ransomware" and have to fork over to access their files. Here are three simple steps you can take to avoid becoming a victim.

Just when you thought it was safe to order office supplies ... Well, actually, ordering supplies for your office is probably pretty safe, just as long as you're not ordering from a few unscrupulous vendors in California or Maryland.

The Federal Trade Commission just charged 12 companies in those two states for ripping off non-profit organizations and small businesses, and "tricking them into paying for overpriced office and cleaning supplies they never ordered." So how do you avoid the same fate as some of these victims?

Disruption, Interrupted: CA Regulators Catch Up With Zenefits

Zenefits, a Silicon Valley startup that was valued at $4.5 billion late last year, has been violating California regulations by using insurance agents who were not properly certified. This week, the state's Department of Insurance announced that it is investigating Zenefits, according to the Wall Street Journal.

This prompted the startup's founder and CEO, Parker Conrad, to quit. The new CEO, David Sacks, has changed the company motto and taken responsibility, admitting Zenefits' error. But the WSJ points out that this is just one of many seemingly successful startups that got big by ignoring industry regulations and asks if that's the true secret to Silicon Valley's successes.

Federal prosecutors served Chipotle with a subpoena as part of a criminal investigation into the restaurant's involvement in norovirus outbreak last year. The Department of Justice and the Food and Drug Administration opened the investigation after E. coli outbreaks sickened hundreds of Chipotle customers.

Chipotle's in-store sales and share prices have been plummeting since multiple norovirus outbreaks occurred last fall in California, Massachusetts, Oregon, and Washington.

DOJ Indicts Man Who Manipulated US Markets With False Tweets

The Department of Justice indicted a Scottish man who manipulated financial markets by tweeting false company information that impacted stock prices. The man acted on the false info to make trades but did not make much because he waited to long to sell his stock, reports Ars Technica.

The Scottish man, James Alan Craig, 62, did not make much on the scheme, authorities say. He did, however, undermine confidence in American markets. He also did manage to move the markets based on false info he tweeted from two fake market research firm accounts he created on the social network Twitter.

Consider TargetJP MorganSony, and Anthem Blue Cross. If these corporations can get hacked, so can your small business. So what can you do about it?

Obviously, prevention is key. But more and more businesses are also looking at post-hacking relief and finding it in the form of cybersecurity insurance. So is it time for your small business to get a cybersecurity insurance policy?

White Collar Crime Checklist: 3 Tips to Prevent Fraud in Your Office

The white collar is mostly gone. But economic crime is still going strong. Bribery, extortion, embezzlement, fraud, and tax evasion are all alive and well as white collar crimes.

These are serious offenses that do much damage to victims and society in general. Yet, they get less press than classic violent offenses. It's important to understand how financial fraud can be more harmful to your business.