Chapter 30

19. Explain why an employer would restrict an employee's speech on social media.

20. Identify two crimes that could be carried out using social media.

21. How does evaluating social media use for determining creditworthiness potentially violate federal law?

22. What are some of the legal problems with using social media posts as evidence?

23. What are three ways that social media could be used that would infringe on trade- mark rights of a company?

24. When posting reviews on social media, what might be a defense to a claim of defamation?

25. How does social media facilitate identity theft?

26. Should the government (state and federal) implement laws that restrict employers from requiring password and username information from employees or potential employees?

27. Why would a creditor want information about a potential borrower's social media use?

28. Are there instances when social media posts should not be used as evidence?

29. Should social media be used by companies to disclose information to investors?

30. Should companies monitor, restrict, or ban unaffiliated group pages that purport to

boost a company's products?

31. How should prosecutors deal with anonymous crimes on social media? Should host sites be held responsible?

32. Are there instances when an employer should not make an employment decision based on an employee's social media use?

33. What emerging issues do you see for businesses as the use of social media expands and develops?

Chapter 31

21. Compare and contrast the two main statutes that cover the sale and distribution of securities in the United States.

• The two main statutes that govern the sale and distribution of securities in the United States are the Securities Act of 1933, as amended, and the Securities Exchange Act of 1934, as amended.-The Securities Act of 1933 is the principal federal law in the United States governing the sale of securities to the public by a corporation or other entity. Sales by entities directly to the public are said to occur in the "primary market." The Securities Act addresses: How an entity registers securities with the Securities and Exchange Commission. The securities to be sold in a public offering. The disclosure to be provided to the public about the entity. The form used in providing disclosure to the public.

22. State the four rules relating to online sales of securities and explain the importance of these.

• The four rules that relate to online sales of securities are: Information electronically transmitted to an investor must be substantially equivalent to what an investor would have received in paper. Prospective investors must receive timely and adequate notice of the availability of electronic information. Electronic delivery must afford investors with access to information that is comparable to what is in paper. There must be evidence available that demonstrates investors successfully received delivery of the information.-The four rules are important because they assure that prospective investors are treated similarly whether they receive information electronically or in paper. The rules are designed so that investors who receive information electronically get: Information comparable to what would have been received in paper. Adequate notice of the availability of information so investors can review the information, just as investors receiving paper documents would receive. -The rules also ensure that the company has evidence of successful delivery when electronic transmission is used. This would be comparable to certified or overnight delivery receipts that the company retains when mailing paper copies of information.

23. When is insider trading of securities illegal?

• The FTC has five primary options when they suspect online deceptive advertising.

1. he FTC can issue a cease-and-desist order, in effect compelling the publisher to eliminate the Internet reference.

2. The FTC can order an affirmative disclosure, requiring the publisher to revise the web reference to include additional, truthful information.

3. The FTC can require corrective advertising, to inform future visitors to the web page that the previous information was deceptive.

4. The FTC can seek fines and other civil remedies.

5. In extreme cases involving fraud, the FTC can ask the federal Justice Department to file criminal charges, which can lead to imprisonment.

24. How can Internet service providers protect themselves against a charge of copyright infringement?

• The Digital Millennium Copyright Act of 1998 protects ISPs from charges of copyright infringement if. Adopt and reasonably implement a policy of terminating, in appropriate circumstances, the accounts of subscribers who are repeat infringers. Accommodate, and do not interfere with, the identification or protection of copy- righted works.

25. Identify types of legal documents for which electronic signatures are not valid and explain why the law excludes these.

• The law requires higher security and protection against fraud for some legal documents, and requires an actual signature. ESIGN does not apply to electronic signatures that appear on: 1. Wills, codicils, and related testamentary documents.2. Adoption or divorce papers.3. Court papers such as orders, pleadings, and motions.4. Notices of cancellation or interruption in utility services.5. Notices of defaults, repossessions, foreclosures, and evictions.6. Notices of cancellation or termination of life or health insurance benefits.7. Certain notices relating to recalls of defective products. 8. Documents relating to the transportation of hazardous material

26. Name five advantages for individuals who select alternative dispute resolution over litigation and give an example of each.

• The five advantages of alternative dispute resolution are speed, finality, informality, privacy, and financial savings.

27. Selling Securities on the Web How can the law better protect individuals who are considering making investments over the web?

• The law can prevent deceptive investment companies from engaging in transactions, thereby only allowing "trusted" firms to market investments to online consumers.

28. Crowdfunding Currently there is a $1 million limit on the amount a company may raise in 12 months through crowdfunding. Should investors have more opportunities to purchase securities over the internet through crowdfunding?

• They can employ people to verify advertisements and take action against deceptive advertising.

29. Entering into Contracts on the Web Why and how are contracts of adhesion especially problematic for offers made on the web?

• All elements necessary for a contract to be valid are required for contracts on the web. It is more difficult to ensure that all requirements are met and web contracts run the risk of being voidable more than contracts made in person. For example if a minor enters a web contract, the contract is voidable. Yet minors are able to hide their age more easily on the web.

30. Electronic Signatures Describe some ways in which technology might be used to ensure that computer users signing contracts with e-signatures are in fact the persons they are representing themselves to be.

• They can ask the users to verify information that they would only use. They can also send verification instructions or links to personal email accounts or telephone numbers.

31. A Question of Ethics Several representatives of the entertainment media have suggested that a federal statute be enacted that would require all computers sold in the United States to incorporate software that would prevent making digital copies of music and video. Is it fair that consumers would lose the right to use their computers to make additional digital copies, for their own use, of songs and movies that they purchased legally?

• Yes. It would be unfair. This type of law was also considered with cassette tapes and VCRs. This also forces computer companies to add software to computers. Who bears the additional expense of bloatware?