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The Morning Risk Report: U.S. Likely Exceeded Authority in TikTok Ban, Judge Says
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The judge said the 1970s national security law President Trump invoked to pursue the TikTok ban prohibits restrictions on exchanges of informational materials. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
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Good morning. The judge who stopped the Trump administration’s download ban on video-sharing app TikTok determined that the government likely overstepped its authority under national security law.
In his 18-page ruling released Monday, Judge Carl Nichols of the U.S. District Court in Washington, D.C., said the 1970s International Emergency Economic Powers Act—which President Trump invoked to pursue the TikTok ban—prohibits restrictions on exchanges of informational materials. In his ruling, the judge sided with attorneys for TikTok and its owner, Beijing-based ByteDance Ltd., in determining that the ban’s restrictions “likely exceed the lawful bounds proscribed by IEEPA.”
[Continued below…]
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Banning TikTok downloads while the app’s lawyers argue about the law in court would harm its business by freezing its user base, hurting employee recruitment and damaging its relationships with commercial partners and advertisers, he said.
“TikTok has proffered unrebutted evidence that uncertainty in TikTok’s future availability has already driven, and will continue to drive, content creators and fans to other platforms,” Judge Nichols wrote. “The nature of social media is also such that users are unlikely to return to platforms that they have abandoned.”
The Trump administration contends that the data TikTok collects from U.S. users could be shared with the Chinese government. TikTok has said it would never hand over such data.
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WSJ Risk & Compliance Forum
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Join us on Oct. 8 for the WSJ Risk & Compliance Forum, where risk managers, compliance officers and legal professionals will provide insights on how their roles are changing as companies grapple with remote workforces, digitization and an amplified focus on corporate ethics. To register, click here.
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From Risk & Compliance Journal
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Interface, Fulton Financial Settle With SEC
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The U.S. Securities and Exchange Commission said it settled separate charges against Interface Inc. and Fulton Financial Corp. for violations that resulted in the improper reporting of quarterly earnings per share. The charges arose from the regulator’s initiative in uncovering potential accounting and disclosure violations caused by earnings management practices, the SEC said.
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Fiat Chrysler to Pay $9.5 Million Over Allegedly Misleading Disclosures
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Automaker Fiat Chrysler Automobiles NV agreed to pay a $9.5 million penalty to settle claims by the U.S. Securities and Exchange Commission that it misled investors about an internal audit of its emissions control systems.
The SEC’s claims stem from a press release and an annual report from 2016, in which FCA said it had conducted an internal audit that confirmed the London-based company's compliance with U.S. emissions regulations. FCA’s statements didn’t sufficiently disclose the limited scope of the audit, which was only focused on a specific type of defeat device, the SEC said. The automaker agreed to settle the claims without admitting or denying the SEC’s findings.
—Dylan Tokar
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Gov. Gavin Newsom of California introduced the plan to ban sales of new gas-powered cars on Sept. 23. PHOTO: DANIEL KIM/SACRAMENTO BEE/ZUMA PRESS
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The Environmental Protection Agency raised concerns about California Gov. Gavin Newsom’s plan to ban sales of new gasoline and diesel-powered passenger cars in the state by 2035, arguing that the mandate is impractical and possibly illegal. In a letter to Mr. Newsom on Monday, EPA Administrator Andrew Wheeler said a statewide shift to electric vehicles would strain California’s electric grid.
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A California federal judge heard arguments in a case led by “Fortnite” maker Epic Games Inc. that legal analysts say could serve as an early test of whether Apple’s App Store practices run afoul of antitrust law. Legal observers say Epic might have difficulty prevailing, in part, because Epic and Apple don’t compete principally in the same markets. Epic could also struggle to prove it has suffered irreparable harm from “Fortnite” being taken out of the App Store because it knowingly broke Apple’s rules and could avoid that harm by complying pending trial.
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Uber won an appeal over the revocation of its operating license in London, securing for now the ride-hailing company’s operations in one of its biggest global markets. The ruling is a step forward for Uber as the company tries to build trust with regulators after years of tussles in London and elsewhere. Under co-founder Travis Kalanick, who resigned as chief executive in 2017 and left the board late last year, Uber regularly tested the regulatory and legal envelope of countries where it operated in order to speed growth.
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LVMH Moët Hennessy Louis Vuitton SE sued Tiffany & Co over their soured merger deal, saying the U.S. jeweler’s business has been so deeply damaged during the pandemic that their takeover agreement is invalidated.
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Nominee to Financial Regulator CFTC Traded Stocks, Options While in Government
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A classroom at Walter Johnson Junior High School in Las Vegas on Aug. 24. The Clark County School District in Las Vegas has about 320,000 students. PHOTO: ETHAN MILLER/GETTY IMAGES
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A hacker published documents containing Social Security numbers, student grades and other private information stolen from a large public-school district in Las Vegas after officials refused a ransom demanded in return for unlocking district computer servers.
The illegal release of sensitive information from the Clark County School District in Las Vegas, with about 320,000 students, demonstrates an escalation in tactics for hackers who have taken advantage of schools heavily reliant on online learning and technology to run operations during the coronavirus pandemic.
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Computer systems at Universal Health Services Inc., one of the nation’s largest hospital chains, were taken offline after a malicious software attack crippled the company’s computers and led it to cancel some surgeries and divert some ambulances.
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French container-shipping line CMA CGM SA said it has shut down some of its technology systems as it copes with a cyberattack at two of its Asia-Pacific subsidiaries. People involved in the matter said the carrier was investigating an encryption malware attack and that it had been contacted by someone claiming to be a hacker who asked for ransom in return for a decryption key.
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‘Opportunity is not equally distributed,’ says Ron Williams, the Black former CEO of Aetna. PHOTO: MICHAEL BUCHER/THE WALL STREET JOURNAL
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Out of the chief executives running America’s top 500 companies, just 1%, or four, are Black. The numbers aren’t much better on the rungs of the ladder leading to that role. Among all U.S. companies with 100 or more employees, Black people hold just 3% of executive or senior-level roles, according to Equal Employment Opportunity Commission data.
CEOs, recruiters and senior executives say Black professionals face greater obstacles early in their career, are viewed more critically than their colleagues and frequently lack the relationships that are pivotal to advancement. Once in the C-suite, they are rarely given the profit-and-loss positions that serve as steppingstones to the top job, and are instead more typically placed into roles such as marketing or human resources. The lack of profit-and-loss experience also stymies women’s careers.
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A health worker took swab samples for coronavirus testing in New Delhi. PHOTO: EPA/SHUTTERSTOCK
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The death toll from the coronavirus pandemic reached one million world-wide on Monday, as several nations continue to struggle to contain a virus that has overloaded health-care systems, upended economies and remade daily life around the globe.
Covid-19, the disease caused by the virus, is killing on average more than 700 people a day in the U.S., which leads the world in both confirmed cases and deaths. With more than seven million confirmed infections since the beginning of the pandemic, the U.S. accounts for nearly a fifth of the more than 33.1 million cases reported globally. More than 205,000 Americans have died.
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United Airlines warned in July that as many as 36,000 employees would be furloughted because of the slump in air travel. PHOTO: DAVID PAUL MORRIS/BLOOMBERG NEWS
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United Airlines said it secured a deal to avoid furloughing pilots before next summer, reducing planned compulsory layoffs by about a quarter to under 12,000 if more federal aid isn’t forthcoming. United said the agreement would keep pilots in their current aircraft types and assignments, thus limiting operating costs and special charges, as well as making it easier to increase flying if demand recovers.
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Microsoft suffered disruptions with its Office 365 workplace software tools and its Azure cloud that disabled some users for hours.
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