4 Types of deceptive practices

There are different levels of deceit we might encounter, ranging from simple misrepresentation to out and out bald face negotiation lies. They are all equally harmful and potentially damaging, so let's examine them in detail so we may better flush out these red herrings before they stink up the room.

1. Falsification

Your counterpart uses information that has been deliberately altered prior to the negotiation. This could be anything from misleading facts and figures, occasionally referred to as creative accounting in more dubious circles. Or, they could be false statements that has been either deliberately exaggerated or deliberately under estimated to mislead. The result is that this can cause us to erroneously recalculate and alter our own presentation. This tangled web is a tricky one to unravel, as it is difficult to pinpoint.

2. Misleading their position

Here, our counterpart deliberately falsifies their actual position to alter the range of the negotiation zone. One example is when our counterpart sits blandly across the table and boldly demands more or they will walk away in a huff. Actually, they really are ready to settle, but are just trying to squeeze a little bit more juice out of you for a little more coin, or to add a little more pulp in the form of another concession. On the other hand, they may also sincerely lie to you about their reservation or resistance point, and this blithely changes the zone of possible agreement. This scenario, unfortunately, is one of the more common situations we might face.

3. Misrepresentation

This scenario occurs when a negotiator deliberately fails to disclose the true wishes or position of the decision maker they represent, or they don't tell their constituencies or bosses what actually has been transpiring in the negotiation room. Playing at a bit of the 'old slight of hand' the right hand doesn't know what the left hand is playing at (Sort of speak). They are willfully playing either the bosses or us at cross-purposes to manipulate the outcome of the negotiation.

4. Bluffing

This is also a very commonly employed tactic meant to deceive us with their actual intentions. The gist, of course, is that they threaten to do something that they actually have no intention of doing. It usually occurs in the dubious form of either a false threat or a false promise. In a sense, this gambit shares many similarities to a good old-fashioned poker bluff, while in reality, their hand may only hold a pitiful pair of deuces.

Remedies:

It can be difficult to catch a person in a web of deceit. Even the most experienced negotiators can get snookered from time to time. However, there are a few counter measures we can employ to catch them out. It's a method consisting of watch, listen and learn.

1. Watch

A favorite belief we all have likely heard is that a person cannot look you in the eye and lie to you at the same time. This is sometimes true, but someone who is practiced at deception learns to do exactly that very thing. Oft times though, a less skilful liar will look just slightly lower than directly in your eyes.

At any given moment when a person is about to engage in deceit, many people exhibit very subtle unconscious signs that can be indicative of their rascally intentions. Micro expressions may wash across their face like a momentary ripple of muscles, a rapid blinking or two of the eyes, or a dilation of the pupils, are all potential clues that might expose a potential deceiver.

They may fidget momentarily before or during their deceit, such as slightly shifting their positions, tugging on their ear, rubbing their chin, reveal an unconscious twitch, or fiddle with their fingers. These body movements are what an experienced poker player would refer to as a 'tell'. People can be very habitual in their 'tells', but you have to be observant and register them. Once you hook onto their 'tells', you can learn to read your counterpart like a book.

2. Listen

Voice patterns can also offer some clues about their nefarious intent. When people are engaging in deceit, the pitch of their voice tends to be slightly higher, or they might speak more slowly, and have to tendency to correct or alter their sentences. If a person hasn't taken the time to practice their deceit, such as trying it out on the spot, they may become less fluent, exhibiting a decrease in their usual eloquence and stumble slightly over their words.

3. Learn

This really is a two-fold process. First, learning means we must be well prepared beforehand. The more information you have on the other negotiator's situation such as facts, figures, financial statements, research and intelligence, the more prepared you will be to challenge any falsified statements they try to wing past you. The second stage of learning means to learn to recognize the verbal and body language clues discussed previously.

Summary

Smoking out the deceiver is an inexact science at best, and you must guard against jumping to a conclusion, but if the hairs are tingling at the back of your neck, then follow your gut and proceed with caution. A bluff can be challenged or questioned as to its wisdom. Intelligent and insightful questions can trip them up just as well.

Often times, our own instincts can be very wise and accurate as a warning barometer. There are ways to test the waters. You can use the pregnant or prolonged pause, while you narrow your eyes and stare meaningfully at them, as this might invoke additional visual or verbal clues. You could respond with your own body language such as using a well-timed sigh, raising an eyebrow, shifting your body to express discomfort, or sharing a sidelong glance with a team member. The most important thing is to simply be vigilant and alert. Be prepared by doing your homework on your counterpart, and keep your eyes and ears attuned and focused to whatever unravels in front of you.

Excessive Markups
The markup on a security represents the difference between the price a broker-dealer charges its customer and the "prevailing market price." Central to determining the reasonableness of a markup is determining the prevailing market price. The prevailing market price generally means the price at which broker-dealers trade with each other -- i.e., the current inter-dealer market. But where a broker-dealer is not a market maker, the prevailing market price generally is based on the broker-dealers’ cost in actual transactions closely related in time to its retail sales.
In Grandon v. Merrill Lynch & Co., the Second Circuit, in an opinion written by Judge Joseph M. McLaughlin and joined by Judge John M. Walker Jr. and District Judge Robert W. Sweet of the Southern District of New York (sitting by designation), vacated and remanded a district court's dismissal of a securities fraud complaint alleging that a broker-dealer had charged (undisclosed) excessive markups, ruling that a broker-dealer has a duty to disclose markups on municipal bonds where those markups are deemed "excessive."
In 1994 and 1995, in three separate transactions, plaintiffs bought three sets of municipal bonds from registered broker-dealer Merrill, Lynch, Pierce, Fenner & Smith Inc. In 1996, plaintiffs brought an action against Merrill Lynch in the United States District Court for the Southern District of New York, alleging that Merrill Lynch had charged excessive markups on these transactions of 4.6 percent, 6.3 percent and 3.7 percent to 9.74 percent, respectively.
Plaintiffs asserted that Merrill Lynch committed securities fraud by: (i) charging excessive markups by imposing inflated prices and fees; (ii) failing to disclose either the "true market price" of the bonds or the amount of the markups; and (iii) making implied misrepresentations or omissions by sending plaintiffs confirmation statements without disclosing the prevailing market prices or the amount of fees charged. Plaintiffs also asserted pendent state law claims for breaches of contract and fiduciary duty.
Merrill Lynch moved to dismiss the complaint. The district court granted Merrill Lynch's motion to dismiss, on the ground that Merrill Lynch was not required to disclose the markups. Although the district court believed the size of the markups was significant and presumed reliance on the part of plaintiffs, it nonetheless held that Merrill Lynch had no statutory or regulatory duty to disclose the markups. Because the district court determined that Merrill Lynch was under no such affirmative duty to disclose, it also concluded that the firm had not acted with scienter in failing to disclose the markups.

The district court did not address whether Merrill Lynch had made fraudulent misrepresentations or omissions in the confirmation statements sent to plaintiffs; nor did it address Merrill Lynch's alternative argument that plaintiffs had not satisfied the stringent pleading requirements Fed. R. Civ. P. 9(b). Refusing to exercise pendent jurisdiction over the state law claims, the district court dismissed the complaint in its entirety.
In reviewing the lower court's decision de novo, the Second Circuit only addressed plaintiffs' contention that Merrill Lynch had a duty to disclose the "true market price" of the municipal securities and that it had failed to make the required disclosure. Because the court ruled that Merrill Lynch had a duty to disclose any excessive markups, it did not address plaintiffs' contention that Merrill Lynch had made implied, material misrepresentations by not disclosing the markups in its confirmation statements.

Duty to Disclose
Liability under §10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated under it, is established by demonstrating that: (i) in connection with the purchase or sale of a security; (ii) the defendant, acting with scienter; (iii) made a material misrepresentation or (where there exists a duty to speak) a material omission, or used a fraudulent device. Where a material omission is alleged, a duty to disclose arises where "one party has information that the other [party] is entitled to know because of a fiduciary or other similar relation of trust and confidence between them."
Because there are few federal regulations governing the municipal securities market, investors of municipal securities enjoy "substantially less protection" than do investors in the "regular securities market." It is well-settled that a broker-dealer operating in the regular securities market commits fraud in violation of §10(b) and Rule 10b-5 by charging customers excessive markups without proper disclosure. As noted above, the markup on a security represents the difference between the price charged and the prevailing market price, which generally is the price at which dealers trade with one another. An excessive markup is one that bears "no reasonable relation to the prevailing market price."
The Municipal Securities Rulemaking Board -- the SEC-supervised, primary regulatory authority in the municipal securities market -- has expressly refused, because of the "heterogeneous" nature of the municipal securities market, to adopt a specific percentage guideline for what constitutes a reasonable markup. Instead, the MSRB has stated that the goal of protecting customers from unfair prices "can be achieved through other means." These "other means" include MSRB Rule G-30, which requires that prices charged by a municipal securities dealer be "fair and reasonable, taking into consideration all relevant factors."
These "relevant factors" include: (i) "the best judgment of the broker, dealer or municipal securities dealer as to the fair market value at the time of the transaction"; (ii) "the expense involved in effecting the transaction"; (iii) "the fact that the broker, dealer or municipal securities dealer is entitled to a profit"; (iv) "the total dollar amount of the transaction"; (v) the availability of the security in the market; (vi) the price or yield of the security; and (vii) the nature of the professional's business.
The MSRB has expressly recognized that the price charged customers is the single "most important" factor in determining the fairness and reasonableness of the markup. Given the "welter of considerations" identified by the MSRB, the court noted that there is no fixed definition of what constitutes an excessive markup, although permissible markups on municipal bonds are significantly lower than those for equity securities.
As distinguished from the myriad regulations governing equity securities, no statutory disclosure requirements exist with respect to municipal securities. To protect against unfair pricing, the SEC has brought Rule 10b-5 actions asserting fraud against securities brokers for charging undisclosed, excessive markups on debt securities under a "shingle theory" of liability. This presumes that a dealer has created an implied duty to disclose excessive markups by "hanging out his professional shingle."
Although not expressly espousing this "shingle theory," the Third and Sixth Circuits have recognized a private right of action under §10(b) and Rule 10b-5 for violating this implied duty to disclose certain markups, and the Supreme Court has long interpreted expansively the antifraud provisions of the securities laws.
Implied Representation
The Second Circuit itself has held, in SEC v. First Jersey Sec. Inc., that sales of securities by broker-dealers carry an implied representation that the prices charged are reasonably related to those charged in an open market, and broker-dealers that charge customers retail prices that include an undisclosed, excessive markup violate the securities laws.
Although this principle was announced in the context of an SEC enforcement action regarding markups of over-the-counter securities, the Second Circuit announced in Grandon v. Merrill Lynch that "[t]he time has come ... to extend the First Jersey principles to private actions arising out of excessive markups on municipal bonds. Specifically, we find that there exists an implied duty to disclose markups on municipal securities when those markups are excessive." The court continued: "We find that when a broker-dealer breaches this implied duty to disclose excessive markups, the broker-dealer violated §10(b) and Rule 10b-5 ... Finally, we also recognize that a private action under the antifraud provision of §10(b) and Rule 10b-5 exists against broker-dealers who charge undisclosed, excessive markups on municipal bonds." Recognizing that it might be unduly burdensome to require broker-dealers to disclose bond markups in every instance and fearful of overreaching into the competitive municipal bond market, the court cautioned that "[i]n assessing whether markups on municipal bonds are, in fact, excessive ... courts should begin with the factors set forth under MSRB Rule G-30." Although a "fairness and reasonableness determination" under MSRB Rule G-30 typically will be fact-based, the court stated that a court, in some cases, properly may conclude, as a matter of law, that plaintiffs have not stated a claim for excessive markups.
Finding that there exists a duty to disclose excessive markups on municipal bonds, the Second Circuit reversed the district court's judgment of dismissal. It also remanded for consideration by the district court the issue of whether plaintiffs properly pleaded that Merrill Lynch had impliedly misrepresented in its confirmation statements the prices charged in the bond transactions. Further, the court vacated the lower court's determination that Merrill Lynch had not acted with scienter because it was not bound by any duty to disclose even excessive markups.
Finally, the court directed the district court to address Merrill Lynch's arguments (i) that plaintiffs had failed to plead the basis for determining the "fair market value" at the time of sale or the amount of the markup, as required by Fed. R. Civ. P. 9(b); and (ii) that plaintiffs' claims are barred by the statute of limitations.
The Second Circuit's decision in Grandon opens the door to further enforcement action by the SEC and private actions by plaintiff-investors. Given the fact-intensive nature of the "excessive markup" analysis formulated by the court, these actions likely will survive motions directed at the pleadings. Needless to say, in the wake of the Second Circuit's ruling and the spate of recent enforcement actions, broker-dealers need to shore up their compliance efforts with respect to determining appropriate markups on all types of securities.

Criticism of advertising is closely linked with criticism of media and often interchangeable. Critics can refer to advertising's

• audio-visual aspects (cluttering of public spaces and airwaves) • environmental aspects (pollution, oversize packaging, increasing consumption) • political aspects (media dependency, free speech, censorship) • financial aspects (costs) • ethical/moral/social aspects (sub-conscious influencing, invasion of privacy, increasing consumption and waste, target groups, certain products, honesty)
As advertising has become prevalent in modern society, it is increasingly being criticized. Advertising occupies public space and more and more invades the private sphere of people. “It is becoming harder to escape from advertising and the media. Public space is increasingly turning into a gigantic billboard for products of all kind. The aesthetical and political consequences cannot yet be foreseen.” Hanno Rauterberg in the German newspaper Die Zeit calls advertising a new kind of dictatorship that cannot be escaped.

Ad creep says, "There are ads in schools, airport lounges, doctor’s offices, movie theaters, hospitals, gas stations, elevators, convenience stores, on the Internet, on fruit, on ATMs, on garbage cans and countless other places. There are ads on beach sand and restroom walls.” “One of the ironies of advertising in our times is that as commercialism increases, it makes it that much more difficult for any particular advertiser to succeed, hence pushing the advertiser to even greater efforts.” Within a decade, advertising in radios climbed to nearly 18 or 19 minutes per hour, on prime-time television the standard until 1982 was no more than 9.5 minutes of advertising per hour, today it is between 14 and 17 minutes. With the introduction of the shorter 15-second-spot the total amount of ads increased even more. Ads are not only placed in breaks but also into sports telecasts during the game itself. They flood the Internet, a growing market.

Other growing markets are product placements in entertainment programming and movies where it has become standard practice and virtual advertising where products get placed retroactively into rerun shows. Product billboards are virtually inserted into Major League Baseball broadcasts and in the same manner, virtual street banners or logos are projected on an entry canopy or sidewalks, for example during the arrival of celebrities at the 2001 Grammy Awards. Advertising precedes the showing of films at cinemas including lavish ‘film shorts’ produced by companies such as Microsoft or DaimlerChrysler. "The largest advertising agencies have begun working to co-produce programming in conjunction with the largest media firms” creating Infomercials resembling entertainment programming.

Opponents equate the growing amount of advertising with a "tidal wave" and restrictions with "damming" the flood. Kalle Lasn, one of the most outspoken critics of advertising, considers advertising “the most prevalent and toxic of the mental pollutants. From the moment your radio alarm sounds in the morning to the wee hours of late-night TV micro jolts of commercial pollution flood into your brain at the rate of around 3,000 marketing messages per day. Every day an estimated 12 billion display ads, 3 million radio commercials and more than 200,000 television commercials are dumped into North America’s collective unconscious”. In the course of his life the average American watches three years of advertising on television.

Video games incorporate products into their content. Special commercial patient channels in hospitals and public figures sporting temporary tattoos. A method unrecognizable as advertising is so-called ‘’guerrilla marketing’’ which is spreading ‘buzz’ about a new product in target audiences. Cash-strapped U.S. cities offer police cars for advertising. Companies buy the names of sports stadiums for advertising. The Hamburg soccer Volkspark stadium first became the AOL Arena and then the HSH Nordbank Arena. The Stuttgart Neckarstadion became the Mercedes-Benz Arena, the Dortmund Westfalenstadion is the Signal Iduna Park. The former SkyDome in Toronto was renamed Rogers Centre.

Whole subway stations in Berlin are redesigned into product halls and exclusively leased to a company. Düsseldorf has "multi-sensorial" adventure transit stops equipped with loudspeakers and systems that spread the smell of a detergent. Swatch used beamers to project messages on the Berlin TV-tower and Victory column, which was fined because it was done without a permit. The illegality was part of the scheme and added promotion. Christopher Lasch states that advertising leads to an overall increase in consumption in society; "Advertising serves not so much to advertise products as to promote consumption as a way of life.

Criticisms and challenges of social marketing: The most common criticisms include:

• An overemphasis of interventions that “blame the victim”

• Confusion between social marketing and social advertising/health

• Communication

• Failure to invest time and money on formative research as needed

• Overuse of focus groups

• Failure to segment populations and carefully select priority audiences.

• Failure to rigorously evaluate social marketing interventions