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The Morning Risk Report: FBI and Facebook Potentially at Odds Over Social-Media Monitoring
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A scroll of Facebook’s settlements, violations and breaches posted at a House Financial Services Committee hearing in July. PHOTO: ANDREW HARNIK/ASSOCIATED PRESS
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Good morning. An effort by the Federal Bureau of Investigation to monitor social media more aggressively for threats sets up a clash with Facebook Inc.’s privacy policies and possibly its attempts to comply with a record $5 billion settlement with the U.S. government reached just last month.
The FBI is soliciting proposals from outside vendors for a contract to pull vast quantities of public data from Facebook, Twitter Inc. and other social platforms “to proactively identify and reactively monitor threats to the United States and its interests.” The request was posted last month, weeks before a series of mass murders shook the country and led President Trump to call for social-media platforms to do more to detect potential shooters before they act.
[Continued below…]
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As described in the solicitation, it appears that the service would violate Facebook’s ban against the use of its data for surveillance purposes, according to the company’s user agreements and people familiar with how it seeks to enforce them.
The FBI declined to comment about the potential program, citing standard practice to not comment on pending procurements. A Facebook spokeswoman declined to comment on the proposal. A Twitter spokeswoman cited the company’s policy prohibiting the use of its data “by any entity for surveillance purposes, or in any other way that would be inconsistent with our users’ reasonable expectations of privacy. Period.”
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SEC Proposes Changes to Risk-Factor Disclosures
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The Securities and Exchange Commission is moving forward with a proposal intended to make corporate disclosures more reader-friendly.
Included in the proposed rule, published Thursday, are changes to the way companies warn investors about potential risks. Companies with risk-factor disclosures that exceed 15 pages would be required to include a summary. Additionally, the proposal would change the threshold for disclosing risk factors to those that are “material,” from “most significant.”
The rule is subject to a 60-day comment period. Read a summary of the changes here.
—Kristin Broughton
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From Risk & Compliance Journal
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New COSO Guidance Being Developed for Cybersecurity, Compliance
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A key standard-setter on internal controls is preparing to publish a set of guidelines for companies on how to manage cybersecurity and other enterprise risks.
The new guidance from the Committee of Sponsoring Organizations of the Treadway Commission is expected to address how companies can apply the principles of enterprise risk management, or ERM, to protect against cyberattacks; how to better craft risk-appetite statements; and how to better manage risk and compliance across an enterprise.
COSO develops frameworks that many companies use to manage financial and nonfinancial risks. Its chairman, Paul Sobel, tells Risk & Compliance Journal that the guidance will be rolled out later this year and early next. He also shared some details on what to expect.
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Screengrab of Jim Watkins, owner of 8chan, from a YouTube video released Tuesday.
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Police in the Philippines said they had opened an investigation into 8chan, an online message board whose American owner lives in the country, following allegations that the site’s no-exceptions embrace of free speech has made it a platform for far-right ideologies linked to several mass shootings. The investigation is in its earliest stages and seeks to establish whether 8chan and its owner, Jim Watkins, had been negligent in their moderation of the fringe site.
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Malaysia filed criminal charges against 17 current and former Goldman Sachs Group Inc. directors over their handling of the sprawling, multibillion-dollar financial scandal at the country’s state fund 1Malaysia Development Bhd. Attorney-General Tommy Thomas said Friday that custodial sentences and fines would be sought for the directors, who worked for three Goldman Sachs subsidiaries—Goldman Sachs International, Goldman Sachs (Asia) LLC, and Goldman Sachs (Singapore) Pte—in relation to bond sales the U.S. bank arranged for 1MDB in 2012 and 2013. The accusations relate to the individuals’ alleged participation in the deals as arrangers, structure agents, underwriters and sellers.
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The U.S. government’s campaign to punish StarKist Co. and other canned tuna producers for price fixing could be pushing the company’s finances to the breaking point. StarKist can’t pay the Justice Department’s proposed $100 million criminal fine while also compensating customers suing over the antitrust conspiracy, StarKist lawyer Niall Lynch said in a hearing in the U.S. District Court in San Francisco.
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Mozambique is suing Lebanese-French businessman Iskander Safa for fraud in a U.K. court, opening a new front in the country’s efforts to rid itself of $2 billion in debt raised by state-owned companies to buy fishing boats and other products from Mr. Safa’s company, Privinvest Group. The civil lawsuit is the latest in a series of criminal and civil cases centered around the $2 billion in loans that were used to pay for procurement contracts with Privinvest.
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Several bills have been introduced in the House of Representatives this year by lawmakers from both parties to improve the credit-scoring system. Last month, a bipartisan House financial-technology task force held a hearing on the use of alternative data. Such efforts seek to address mounting criticism of an existing credit-evaluation system that relies on past loan-repayment history but also raises questions about fairness and accessibility to credit.
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The WSJ survey comes in the wake of President Trump’s threat to impose 10% tariffs on almost all Chinese goods not subject to levies, starting Sept. 1. PHOTO: KEVIN LAMARQUE/REUTERS
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The economic consensus is in: The U.S. and China are in a trade war. A year ago, the economists in a monthly survey by The Wall Street Journal were evenly split over whether to describe the situation in those terms. But in the latest survey, conducted Aug. 2-6, 87% of respondents were good to go with “trade war.” The survey came in the wake of President Trump’s threat last week to impose 10% tariffs on almost all Chinese goods not currently subject to levies, starting Sept. 1.
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The U.K. economy contracted in the three months through June, its first drop in economic output since the end of 2012, as the country faces an uncertain future over its planned departure from the European Union at Halloween.
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President Trump’s campaign and other prominent Republican groups said they are temporarily freezing spending on Twitter Inc. after the social-media platform locked the account belonging to Senate Majority Leader Mitch McConnell’s campaign. The @teammitch account was locked after it posted this week a video in which a protester could be heard saying “stab the motherf—er in the heart.” Twitter requires account holders to take down any media deemed to incite violence. The McConnell campaign has declined to remove the video, and said Thursday that it was still locked out of the account.
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Mice have similar auditory systems to humans in terms of their ability to recognize complex sound groups. PHOTO: ISTOCK
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Dogs are commonly called man’s best friend, but when it comes to determining whether voice recordings are real or fake, mice might be a better ally.
Researchers presented findings at the Black Hat USA cybersecurity conference, held in Las Vegas this week, that showed the critters have an aptitude for distinguishing elements of natural speech. The work could influence how technology firms build systems to detect computerized voices created by artificial-intelligence systems.
Experts worry about the growth in “deepfakes,” which can sample hundreds of photographs and voice recordings to make it seem as if people said or did things that they didn’t. The concern is that the technology could be used to influence elections, commit cyberattacks by impersonating key executives or target individuals.
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New York State Comptroller Thomas DiNapoli PHOTO: MARY ALTAFFER/ASSOCIATED PRESS
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The New York state comptroller is calling for improved oversight of a state program that works to prevent lead poisoning and help children with elevated blood lead levels, a major health risk to children.
In a report released from New York State Comptroller Thomas DiNapoli, auditors found that the state Department of Health regional offices didn’t consistently conduct on-site reviews of the local health departments that carry out the state’s lead-prevention program to ensure that children receive proper treatments and intervention.
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ABC News was among the news outlets that received a pitch from Facebook to license their content. PHOTO: KENA BETANCUR/GETTY IMAGES
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Facebook Inc. is offering news outlets millions of dollars for the rights to put their content in a news section that the company hopes to launch later this year, according to people familiar with the matter.
Representatives from Facebook have told news executives they would be willing to pay as much as $3 million a year to license headlines and previews of articles from news outlets, the people said.
The outlets pitched by Facebook on its news tab include Walt Disney Co.’s ABC News, Wall Street Journal parent Dow Jones & Co., The Washington Post and Bloomberg, the people said.
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