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The Morning Risk Report: Barr Presses Facebook on Encryption, Setting Up Clash Over Privacy
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Facebook CEO Mark Zuckerberg was on Capitol Hill last month to discuss regulations on tech companies. PHOTO: BRENDAN SMIALOWSKI/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Good morning. U.S. Attorney General William Barr is asking Facebook to hold off on plans to add end-to-end encryption throughout its messaging services, citing public safety in a push to force the social-media giant to delay a major strategic shift outlined by Chief Executive Mark Zuckerberg earlier this year.
Mr. Barr is making the request in an open letter also signed by his British and Australian counterparts, set to be published Friday. The letter, a copy of which was obtained by The Wall Street Journal, asks the company to delay the encryption plan until it figures out a way to provide government access to the services for investigative purposes.
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Mr. Barr’s salvo reignites a long-running dispute between technology companies and law enforcement over encrypted communications. In 2016 the Justice Department filed suit, requesting access to the encrypted iPhone of San Bernardino, Calif., shooter Syed Rizwan Farook. Apple pushed back against the request, and the suit was eventually dropped when investigators used another method to obtain access to the phone.
The federal government has avoided further high-profile dispute with the technology industry over encryption since then, but Mr. Barr’s letter represents a new effort against a Silicon Valley giant. It also comes at a time when there is increased regulatory scrutiny of Facebook and other technology companies.
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From Risk & Compliance Journal
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CFTC: Commissioners Shouldn’t Be Forced to Testify
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The Commodity Futures Trading Commission has asked an appeals court to block an order requiring three of its commissioners to testify over statements the agency published following a market-manipulation settlement.
The derivatives regulator argued in a motion unsealed Wednesday that U.S. District Judge John Robert Blakey had overstepped judicial bounds by ordering the CFTC’s presidentially appointed commissioners to show up in court for a hearing that the judge said could result in a referral for criminal contempt.
The appeal is the latest in a series of attempts by the agency to prevent its new chairman, Heath Tarbert, and two Democratic commissioners from becoming entangled in a legal battle related to a CFTC settlement. The regulator had sued Kraft Heinz and Mondelez International Inc. over alleged manipulation of the wheat-futures market.
To settle the CFTC’s allegations, Kraft and Mondelez—which were one corporate entity when the agency announced its civil charges in 2015—had agreed to pay $16 million.
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The Wall Street Journal reported in August that the FTC had opened an investigation of Juul’s marketing practices. PHOTO: ELIJAH NOUVELAGE/REUTERS
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The Federal Trade Commission said it is seeking information from six e-cigarette companies, including vaping startup Juul Labs, to study the sale and promotion of their products as health authorities investigate a rash of illnesses and deaths linked to vaping. The other companies contacted by the FTC are R.J. Reynolds Vapor Co., Fontem U.S. Inc., Logic Technology Development LLC, NJOY LLC and Nu Mark LLC, which is Altria Group’s vaping business.
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The former co-chairman of law firm Willkie Farr & Gallagher LLP was sentenced to one month in prison for his role in the college admissions cheating scheme, as the federal judge overseeing the cases of parents who have pleaded guilty continued to distinguish between parents who were involved in the testing scheme and those who bribed coaches to secure spots at particular colleges.
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MGM Resorts International said it has reached an agreement worth up to $800 million to settle claims related to the 2017 mass shooting at its Mandalay Bay Casino & Resort in Las Vegas. The casino company said it reached a settlement agreement with attorneys representing substantially all plaintiffs in the litigation stemming from the deadliest shooting in modern U.S. history, which left 59 people dead, including the gunman, and hundreds of others injured.
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An outside review of The Financial Times’s coverage of German payments company Wirecard AG found no collusion between reporters and short sellers looking to benefit by drops in the company’s stock price, the newspaper said. In an email to staff reviewed by The Wall Street Journal, FT Editor Lionel Barber said a law firm the paper hired to carry out the review hadn’t found evidence to support claims of collusion after a two-month probe.
Also...
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A worker cleaning a bridge used to build a CNC router machine at a manufacturing facility in Colorado Springs, Colo. PHOTO: RACHEL WOOLF/BLOOMBERG NEWS
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In a market prepped for the end of the economic cycle, constant recession scares could chip away at confidence and eventually feed back to cause a slowdown.
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Retailers expect a strong holiday shopping season, but warn that global political and economic uncertainty could erode consumer confidence and spending.
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Ms. Cooper joined Imperial 20 years ago and became CEO in 2010. PHOTO: JASON ALDEN/BLOOMBERG NEWS
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BP Chief Executive Bob Dudley will retire next year, after almost a decade steering the U.K.-based energy giant through the aftermath of the Deepwater Horizon crisis.
He will be succeeded by Bernard Looney, the chief executive of BP’s upstream segment. Mr. Looney will take up the CEO role and join the BP board on Feb. 5, the company said Friday.
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Lazard is cutting employees in its asset-management unit. PHOTO: MATTHIEU ALEXANDRE/AFP/GETTY IMAGES
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Lazard Ltd. is cutting up to 7% of its employees in its asset-management division and closing some investment funds by year’s end, people familiar with the matter said, amid a tougher climate for money managers. Lazard Asset Management, which employs more than 850 people globally and oversees $213.6 billion in assets, told staffers of the cuts last week, one of the people said.
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TheMaven Inc., which earlier this year licensed the rights to Sports Illustrated’s print and digital publications, is planning to eliminate more than 40 positions at the sports media bible as part of a broader overhaul, according to people familiar with the matter. The employees are expected to receive notice this week that their jobs are being cut, according to the people.
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Constellation Brands posted a quarterly loss, while beer sales grew 7% to $1.64 billion, the company said. PHOTO: DANIEL ACKER/BLOOMBERG NEWS
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Constellation Brands Inc.’s big bet on cannabis has been a drag on profits, but the brewer is preparing its next gamble: jumping into the crowded, fast-growing market for alcoholic seltzers with a new Corona-branded drink.
The Victor, N.Y., company posted a $525.2 million second-quarter loss, weighed down by paper losses on its investment in Canadian marijuana grower Canopy Growth Corp. Constellation was one of the first brewers to invest in cannabis and put roughly $4 billion into Canopy, giving it a 38% stake.
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