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The Morning Risk Report: Kraft Heinz Discloses SEC Probe |
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Kraft Heinz’s procurement practices are under investigation by the SEC. PHOTO: GENE J. PUSKAR/ASSOCIATED PRESS
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Securities regulators are investigating Kraft Heinz Co. over its procurement practices, the company disclosed as it reported a loss from a significant write-down in the value of some of its best-known brands, sending its shares down 17% after hours.
The packaged-food giant said Thursday that it is cooperating with the investigation by the Securities and Exchange Commission. Kraft Heinz said it had conducted an internal investigation into accounting practices in its procurement division that led it to record an additional $25 million in costs in the quarter.
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Kraft Heinz has struggled in recent months with higher costs for ingredients, shipping, marketing and new product development. Kraft Heinz’s profit, excluding things like interest payments, taxes and restructuring costs, fell 14% in the quarter. For years, this measure, known as adjusted Ebitda, had routinely risen at the company thanks to its cost management.
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| From Risk & Compliance Journal |
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A shot of the Nike sneakers worn by Zion Williamson on Wednesday night. PHOTO: STREETER LECKA/GETTY IMAGES
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The blowout of college basketball star Zion Williamson’s Nike shoe underscored how consumer perception of safety and quality can weigh heavily on a company’s reputation, Risk & Compliance Journal’s Mengqi Sun reports.
The prime-time spectacle, which played out on national television during a high-profile between storied rivals Duke University and the University of North Carolina, highlighted a delicate dance between customer expectations and quality assurance, risk consultants said.
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The Future of Corporate Compliance |
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Companies face a widening range of risks from third-party relationships at a time when many depend on complex networks of hundreds of sales agents, suppliers and business partners. Join The Wall Street Journal and Dow Jones on March 12 at 8 a.m. in New York for a discussion about third-party risk, including an interview with Stephanie Davis, Chief Ethics & Compliance Officer for Volkswagen Group of America. Register here.
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Danske Bank is under investigation for allegedly facilitating the laundering of about $230 billion through its branch in Estonia. PHOTO: JACOB GRONHOLT-PEDERSEN/REUTERS
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U.S. securities regulators have joined a long list of authorities investigating Danish lender Danske Bank over a massive money-laundering scandal at its Estonian branch. Danske Bank said in a statement that it has received an inquiry from the U.S. Securities and Exchange Commission, which is carrying out an investigation.
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Standard Chartered PLC said it would take a $900 million charge to cover conduct-related settlements, including the potential resolution of a U.S. sanctions probe that has hung over the bank.
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Ford Motor Co. said it will investigate its processes for U.S. emissions certification compliance after a group of employees raised concerns about the company’s analytical modeling.
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A worker assembles components inside a round baler at the New Holland hay tools plant in New Holland, Pa., in December. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS
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A widely watched measure of how much businesses are investing fell for the fourth time in five months at the end of 2018, signaling firms are feeling less confident in light of domestic and global economic uncertainty.
Overall orders for durable goods, manufactured products intended to last at least three years, rose a seasonally adjusted 1.2% in December from the prior month, the Commerce Department said. This was largely driven by ramped up commercial aircraft and parts orders, and orders for vehicles and vehicle parts. When removing transportation, orders grew at a 0.1% pace.
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Marketers including Clorox, Nestlé, McDonald’s and “Fortnite” publisher Epic Games halted their YouTube advertising on Wednesday PHOTO: JAAP ARRIENS/ZUMA PRESS
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AT&T Inc. is the latest to join a growing group of marketers halting their advertising on YouTube after it was found that the site served ads near inappropriate content.
“Until Google can protect our brand from offensive content of any kind, we are removing all advertising from YouTube,” an AT&T spokesman said in a statement Thursday.
AT&T’s retreat is notable because it was one of the last major marketers to resume advertising on YouTube, part of Alphabet Inc.’s Google, after a number of them pulled out in 2017 over revelations that their ads there were running near offensive videos. AT&T said in January that it had taken time to be confident that similar problems wouldn’t recur.
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Pinterest, which launched in 2010, surpassed 250 million monthly active users in September. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
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Pinterest Inc. has confidentially filed paperwork with the Securities and Exchange Commission for an initial public offering, according to people familiar with the matter, as the online-image search company joins a parade of highly valued technology startups planning to list their shares in 2019.
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Bunge Ltd. said it is reviewing its businesses and may sell assets to improve profits at a volatile time for agricultural markets. The company, the world’s biggest soybean processor, is examining its global network of crop-loading terminals, food brands and processing plants after a weak performance in 2018 and pressure from investors.
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SoftBank Group Corp.’s Vision Fund is diving into the global freight business, leading a new $1 billion round of funding in Flexport Inc., a six-year-old international shipping broker built by Silicon Valley technology developers.
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China’s first Tesla Model 3 owners took express delivery of their new cars Friday, after the electric-car maker rushed a boatload of vehicles across the Pacific to beat a looming tariff deadline.
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Canadian authorities are conducting a security review of its telecommunications networks, with a specific focus on Huawei’s role in 5G mobile networks. PHOTO: ANDY WONG/ASSOCIATED PRESS
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Huawei Technologies Co. said it would hire 200 new employees and increase research and development spending in Canada as the Chinese company attempts to counter U.S. efforts to pressure allies to abandon its equipment over security concerns.
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Separately, a large delegation of U.S. officials is heading to Spain this weekend for the world’s largest telecommunications trade show, planning to ratchet up the offensive against Huawei.
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Trade tensions, slower economic growth and Britain’s looming exit from the European Union are denting the outlook for companies in Europe—forcing some to make structural changes while others take a wait-and-see approach.
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Newell CEO Michael Polk says the company ‘has taken a series of very decisive actions to set up the business for long-term success.’ PHOTO: RICHARD DREW/ASSOCIATED PRESS
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Newell Brands Inc. Chief Executive Michael Polk is under pressure from the board of directors to prove his turnaround is working following several disappointing quarters of sales at the household-goods conglomerate, according to people familiar with the matter.
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The head of South Korea’s ailing container operator, Hyundai Merchant Marine Co., has offered to resign after months of being under pressure from its top creditor to quit over failures in its turnaround.
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The chief executive of shale oil and gas driller Pioneer Natural Resources Co. has retired effective immediately, the company said Thursday. Timothy Dove, who took the helm of the Texas-based company two years ago, will be replaced by board chairman Scott Sheffield, the company’s former CEO, also effective immediately.
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Zillow Group Inc. is bringing back its former CEO to lead the company again. Seattle-based Zillow said that Rich Barton, one of the founders of the real estate listings company and its CEO between 2005 and 2010, has been appointed to the top role at the company.
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Nintendo of America said its president and chief operating officer, Reggie Fils-Aime will retire, effective April 15. Taking his place as president: Doug Bowser, the U.S. unit’s vice president of sales and marketing. Mr. Bowser joined Nintendo of America in 2015 and has led the sales and marketing efforts in the U.S. for the Switch.
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