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The Morning Risk Report: Purdue Pharma Bankruptcy Plan Approved, Freeing Sacklers From Lawsuits
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Some federal and state authorities opposed the bankruptcy plan, arguing the Sackler settlement is unconstitutional.
PHOTO: TOBY TALBOT/ASSOCIATED PRESS
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Good morning. OxyContin maker Purdue Pharma LP won court approval of a $4.5 billion bankruptcy settlement that shields its owners, members of the Sackler family, from lawsuits accusing them of contributing to the nation’s opioid epidemic in exchange for providing funding to combat the crisis.
Judge Robert Drain of the U.S. Bankruptcy Court in White Plains, N.Y., said Wednesday he will confirm a restructuring plan that will transform Purdue into a public benefit company and settle civil lawsuits filed by governments and opioid victims against the drugmaker and its owners.
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The ruling can be appealed by the handful of federal and state authorities that opposed Purdue’s bankruptcy-exit plan and argued at trial that the settlement structure is unconstitutional and the Sacklers aren’t contributing enough of their wealth. Purdue’s family owners collected more than $10 billion from the company between 2008 and 2017, about half of which went to taxes or was reinvested in the business.
The bankruptcy plan’s approval means those family members can put behind them numerous lawsuits and investigations from state regulators and private litigants over their stewardship of Purdue. The Sacklers who own Purdue and sat on its board are getting broad releases that extinguish civil litigation currently pending against them as well as lawsuits that could be brought in the future.
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Read more: Purdue Bankruptcy Plan Settles Opioid Lawsuits Against Founding Family. Here’s What to Know.
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WSJ Risk & Compliance Forum
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Join us on Oct. 12 for the WSJ Risk & Compliance Forum. The virtual program includes sessions on anti-money-laundering laws, emerging risks, compliance and cryptocurrencies, lessons from Wirecard and workshops on ESG reporting and responding to ransomware. You can register here.
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The U.S. Securities and Exchange Commission in Washington, D.C., alleged that BitConnect paid back some investors using the contributions of newer investors, the hallmark of a Ponzi scheme.
PHOTO: ARIEL ZAMBELICH/THE WALL STREET JOURNAL
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Regulators on Wednesday sued an offshore company that allegedly conducted one of the biggest scams ever involving cryptocurrencies.
The Securities and Exchange Commission accused BitConnect and its founder, Satish Kumbhani, of a $2 billion fraud that misused bitcoin raised from investors world-wide. An American promoter for the scheme, Glenn Arcaro, pleaded guilty in federal criminal court over his role in fleecing U.S. investors.
BitConnect sold its own digital asset in 2016 in exchange for bitcoin, the world’s most valuable cryptocurrency. BitConnect said it had an automated program that would make money by trading the contributed bitcoin. Profits would be shared with investors through interest payments.
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Can the FTC help get you your McFlurry?
As many customers of McDonald’s know all too well, the fast-food chain has struggled for years to keep its ice cream machines working.
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Enter the United States Federal Trade Commission. The FTC reached out to McDonald’s franchisees this summer seeking information on what, exactly, is going on with the broken ice cream machine problem, according to a letter it sent, viewed by The Wall Street Journal, and people familiar with the matter. The FTC declined to comment.
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Asset managers that say they allocate capital to environmentally or socially responsible companies might eventually have to back up those claims. Wall Street’s main regulator is considering whether to require fund managers to disclose the criteria and data they use to apply labels such as green, low-carbon or sustainable.
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European Union regulators fined Facebook Inc.’s chat service WhatsApp 225 million euros, equivalent to around $266 million, for failing to tell the bloc’s residents enough about what it does with their data, ramping up privacy enforcement against U.S. tech companies.
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Financial regulators have opened an investigation into electric delivery-truck maker Workhorse Group Inc., an Ohio-based company that was an early investor in now-struggling startup Lordstown Motors Corp.
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Facing pressure from investors to show progress on diversity issues, more companies are publicizing workforce representation data they already report confidentially to the U.S. government.
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Accessibility jobs are increasing at a rapid pace across industries as companies strive to make their products and services more tailored to people with disabilities. The rise is fueled by a number of factors, including effects of the Covid-19 pandemic, disability lawsuits, and diversity and inclusion efforts, advocates and hiring managers said.
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Aviation regulators are investigating how Virgin Galactic Holdings Inc.’s spacecraft returned to the ground after taking billionaire entrepreneur Richard Branson to the edge of space, a spokesman for the Federal Aviation Administration said.
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Vivint Smart Home Inc. on Tuesday named Daniel Garen as its new chief ethics and compliance officer, Dow Jones Newswires reports.
Mr. Garen, a technology compliance lawyer, joins the smart home technology company from DLA Piper, where he implemented compliance and risk management programs at both public and private companies.
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Ben Dugan, seen above in a CVS store, the company’s top investigator, is charged with combatting a boom in organized theft from retail stores. ZACK WITTMAN FOR THE WALL STREET JOURNAL
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Retailers are spending millions a year to battle organized crime rings that steal from their stores in bulk and then peddle the goods online, often on Amazon.com Inc.’s retail platform, according to retail investigators, law-enforcement officers and court documents. It is a menace that has been supercharged by the pandemic and the rapid growth of online commerce that has accompanied it.
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European leaders, grappling with the question of how to interact with Afghanistan’s new hard-line Taliban leadership, are considering threatening sanctions to win commitments to safeguard human rights, cut terrorist ties and permit at-risk Afghans to leave. Measures under consideration include freezing Afghan money overseas and ending existing sanctions-waivers for certain Taliban leaders.
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Many Afghans get by with financial help from family members living abroad. But those remittances have become much harder to send and receive in the weeks since the Taliban gained control of the country.
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Refineries that were caught in the path of Hurricane Ida could take weeks to resume operations because of widespread power outages. Valero Energy Corp., Marathon Petroleum Corp., Royal Dutch Shell PLC and other oil refiners along the banks of the Mississippi River near New Orleans are still assessing damages and trying to figure out when they can come back online.
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Business remains muted in the once-bustling casinos of Macau more than a year and a half into the Covid-19 pandemic, while gambling operators wait for tourists to return en masse to the Chinese city.
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The growing body and scope of breach notification rules from regulators, state authorities and soon the federal government risks harming their effectiveness, industry groups warn.
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Getting tested for Covid-19 in a factory in Wuhan, China, last month.
PHOTO: AGENCE FRANCE-PRESSE/GETTY IMAGES
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Factory activity faltered across Asia in August, with a resurgence in Covid-19 infections adding to global supply-chain disruptions and confirming fears of a slowdown in the region’s economic recovery.
Gauges of manufacturing activity plummeted across major Asian economies, in large part because virus lockdowns, port congestion and higher input costs hampered production. There were also signs that global demand for some Asian goods has been leveling off, as consumers rein in spending in the West.
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Amazon.com Inc. said it is seeking to hire about 55,000 people globally among its corporate and technology ranks during a recruiting event set for Sept. 15, as the e-commerce giant continues a hiring spree begun at start of the Covid-19 pandemic.
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Walmart Inc. is hiring 20,000 workers for its supply-chain operations ahead of the holidays, highlighting the growing role of distribution and delivery as the retailer competes with e-commerce giant Amazon.com Inc.
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The European Union plans to expand its market for trading carbon emissions. A refinery in the Netherlands earlier this year.
PHOTO: PETER BOER/BLOOMBERG NEWS
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Big energy trading houses, long focused on deep, volatile markets such as oil and natural gas, are now bulking up their carbon-trading operations as governments around the world push to expand the market for trading carbon emissions.
Two of the world’s biggest oil companies, Royal Dutch Shell PLC and BP PLC, already have significant carbon-emissions trading arms, thanks to a relatively well-developed carbon market in Europe. Big carbon emitters such as steel producers receive emission allowances, and can buy more to stay under European emissions guidelines. Companies that fall below those limits can sell their excess carbon-emissions allowances.
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