|
The Morning Risk Report: When MAXs Fly Again, Will Passengers Board?
|
|
|
|
|
|
|
A Boeing 737 MAX 8 jetliner being built for Turkish Airlines took off on a test flight, Wednesday in Renton, Wash.; passenger flights using the plane remain grounded world-wide. PHOTO: TED S. WARREN/ASSOCIATED PRESS
|
|
|
Good morning. Boeing Co.’s 737 MAX plane could return to service this summer, yet convincing passengers the plane is safe will be one of the aviation industry’s toughest consumer-relations challenges in decades.
The aircraft has been grounded world-wide since March after two MAX jets crashed within five months of each other. The crashes, and what some carriers and pilots have described as Boeing’s lack of transparency in their aftermath, have undermined confidence in the plane maker.
[Continued below...]
|
|
|
|
|
|
Industry officials expect U.S. regulators may lift the flying ban for the MAX in June, but it increasingly looks like late summer before the planes start flying passengers again. Getting the MAX back in the air is crucial to Boeing’s future.
As its best-selling model, the jet was expected to contribute 40% of Boeing’s sales and profits in coming years, analysts say. Airlines that have the craft in their fleets, meanwhile, face steep financial costs and have canceled flights or shuffled planes to avoid stranding passengers.
|
|
|
From Risk & Compliance Journal
|
|
|
|
The final match of the 2014 World Cup in Brazil. PHOTO: THEMBA HADEBE/ASSOCIATED PRESS
|
|
|
Telefonica Brasil S.A. agreed to pay a $4.1 million fine to settle charges related to how it accounted for ticket purchases and a hospitality program it hosted at major international soccer tournaments, the U.S. Securities and Exchange Commission said.
The regulator said the Brazilian subsidiary of Spanish telecommunications giant Telefónica S.A. gave 2014 World Cup and 2013 Confederations Cup tickets to Brazilian officials who were involved with, or in a position to influence, legislation, regulatory approvals and business dealings involving the company. As part of the agreement, announced Thursday by the SEC, Telefonica Brasil didn’t admit or deny the regulator’s findings.
|
|
|
FinCEN Clarifies Compliance Expectations for Virtual Currency Firms
|
|
The Treasury Department’s financial crimes office issued new guidance on how anti-money-laundering laws apply to virtual currency firms.
The 30-page document from the Financial Crimes Enforcement Network, which responds to questions it received from financial institutions and law enforcement agencies, describes the internal controls FinCEN expects from companies that use virtual currency, including policies and procedures to spot suspicious transactions.
The guidance comes weeks after FinCEN issued its first penalty for a virtual currency exchange. It also comes six years after the agency first outlined its treatment of certain virtual currency firms as money services businesses.
The guidance does not represent a change in policy, the agency said. But it might prove useful to virtual currency firms looking to work with more established financial institutions, said Walter Mix, managing director at financial services consulting firm Berkeley Research Group. The document provides both groups with a clearer picture of regulators’ expectations.
It also signals how virtual currency is becoming increasingly important to financial services, said Andrew Ittleman, a lawyer at Fuerst Ittleman David & Joseph in Miami. “It’s legitimate; it’s being regulated,” he said.
Here is a link to the guidance.
—Kristin Broughton
|
|
Finra Issues Guidance on Anti-Money Laundering Compliance
|
|
A financial regulator for broker-dealers published new guidance on maintaining effective anti-money laundering controls.
The Financial Industry Regulatory Authority guidance outlines more than 90 red flags that brokerage firms should keep in mind to spot potential criminals. They include watching for customers who buy and sell securities without a clear purpose, or who transfer money in small amounts to evade reporting requirements.
Finra’s notice expands guidance issued 17 years ago, following the overhaul of anti-money laundering laws after the Sep. 11 terrorist attacks. The update is part of a broader effort by the industry-funded regulator to be more transparent about its expectations, according to Bao Nguyen, a principal in the risk advisory practice at Kaufman Rossin.
It’s also likely meant as a warning to brokers. “They see a pattern of deficiencies,” Mr. Nguyen said. “They wanted to put other broker-dealers on notice.”
Here is a link to the guidance.
—Kristin Broughton
|
|
|
|
A Volkswagen logo on the front of a car at the North American International Auto Show in Detroit on Jan. 14. PHOTO: JONATHAN ERNST/REUTERS
|
|
|
-
A federal judge questioned why securities regulators took so long to sue Volkswagen AG over its bond offerings, years after other government agencies resolved litigation over the auto maker’s diesel-cheating scandal. U.S. District Judge Charles Breyer suggested the Securities and Exchange Commission’s March 2019 lawsuit makes it look like a “carrion hawk that simply descends when everything is all over and sees what it can get from the defendant,” according to a transcript provided to The Wall Street Journal.
-
The Trump administration warned Venezuela’s military and intelligence officials that continued support of President Nicolás Maduro’s regime puts them at risk of targeted sanctions. Friday’s message—issued by the U.S. Treasury Department as it blacklisted two more oil tankers allegedly shipping banned Venezuelan oil—follows disappointment within the administration that the military didn’t abandon Mr. Maduro when opposition leader Juan Guaidó earlier this month called for the country’s security forces to back him instead.
-
India’s antitrust watchdog is investigating whether Alphabet Inc.’s Google used its Android platform to block rivals, New Delhi’s latest move to try to tamp down American tech behemoths. The investigation launched by the Competition Commission of India resembles a case last year in which the European Union fined Google $4.87 billion, according to an Indian government official with knowledge of the matter.
-
Nasdaq Inc.’s lawsuit accusing a New Jersey company of stealing more than $1 billion in exchange-traded funds is set to come to trial Monday in New York, in a case that is drawing interest across the ETF industry.
-
San Francisco leaders here are proposing to more than triple a tax on stock compensation in a bid to use revenue from a wave of public offerings by tech companies to address concerns about growing wealth disparity.
|
|
|
|
Saudi Aramco's Ras Tanura oil refinery and terminal. One of the attacked ships was headed for the Ras Tanura port. PHOTO: SIMON DAWSON/BLOOMBERG NEWS
|
|
|
-
Two Saudi Arabian oil tankers suffered significant damage in an attack over the weekend near the Strait of Hormuz, the kingdom’s energy minister said, amid heightened military tensions in the Persian Gulf.
-
Amazon.com Inc. has a Facebook Inc.-size problem: It’s become such a gigantic, sprawling, powerful business that its inevitable missteps are beginning to erode trust in its products and services, good will in Washington, and its ability to achieve globe-spanning dominance.
-
The increased tariffs enacted by the U.S. on products coming from China raise the costs for many American companies and threaten their future profit.
|
|
|
|
Charge nurse Theresa Ritchie adjusts settings on a bedside patient monitor at NewYork-Presbyterian/Weill Cornell Medical Center, in New York. STEPHANIE AARONSON/THE WALL STREET JOURNAL
|
|
|
Hospitals are pushing medical-device makers to improve cyber defenses of their internet-connected infusion pumps, biopsy imaging tables and other health-care products as reports of attacks rise.
Rattled by recent global cyberattacks, U.S. hospitals are conducting tests to detect weaknesses in specific devices, and asking manufacturers to reveal the proprietary software running the products in order to identify vulnerabilities. In some cases, hospitals have canceled orders and rejected bids for devices that lacked safety features.
|
|
|
|
Toshiba is acceding to foreign shareholders’ demands to shake up its board. PHOTO: KIMIMASA MAYAMA/EPA-EFE/REX/SHUT/EPA/SHUTTERSTOCK
|
|
|
Toshiba Corp. said it was proposing to replace a majority of its board and add more international business leaders, acceding to demands made by foreign shareholders in the latest sign of activist shareholders’ growing influence in Japan.
Toshiba’s list of candidates didn’t include Brian Higgins, co-founder of New York-based hedge fund King Street Capital Management LP, which has a 5.4% stake in Toshiba. In March, King Street said it intended to nominate a slate of independent directors, including Mr. Higgins, to replace a majority of Toshiba’s board.
|
|
|
|
Purdue Pharma, the maker of OxyContin, and its owners, the Sackler family, are facing a raft of lawsuits for the company’s alleged role in the opioid epidemic. PHOTO: DREW ANGERER/GETTY IMAGES
|
|
|
Balter Capital Management, a Boston mutual fund, is giving back more than $90 million to the Sackler family, owners of OxyContin maker Purdue Pharma LP, the fund’s manager said. People familiar with the matter said firm executives had said the Sacklers had decided to redeem their money. Mr. Balter disputed the accuracy of the family initiating the move.
With continued media coverage of the family and Purdue in relation to the continuing opioid litigation, Mr. Balter said he had received an increasing volume of calls from current and prospective investors about whether the Sacklers would pull out of the fund. It was difficult to provide callers with assurances the family wouldn’t redeem given the uncertainty of the litigation, he said.
|
|
|
|
United Capital could slot into Goldman’s existing private wealth business and be part of its push to manage more money for clients. PHOTO: BRENDAN MCDERMID/REUTERS
|
|
|
-
Goldman Sachs Group Inc. is nearing a deal to acquire investment management firm United Capital Financial Partners Inc. expanding its push into managing assets for individuals, according to people familiar with the matter. The deal would be Goldman’s biggest deal since the 2008 financial crisis and could be announced as soon as Monday, the people said.
-
Shares of Germany’s Thyssenkrupp AG surged 28% Friday after the group said it was dropping a plan to split into two companies and would instead pursue an initial public offering of its elevator unit. The company, which makes steel, elevators and auto components, also said it would restructure the remaining businesses in a bid to improve profits. The surprise U-turn is the latest example of a large, aging conglomerate being forced to reinvent itself.
-
An investment firm with a strategy to protect Bed Bath & Beyond Inc. from the carnage in the retail sector, Legion Partners Holdings LLC, is suing the housewares seller, accusing it of risking trouble with lenders to keep them from getting seats on the board of directors. Bed Bath & Beyond, in a statement, said it is prepared to talk to the activists, which include Legion allies Macellum Advisors GP LLC and Ancora Advisors LLC, and is open to a settlement.
-
China’s Cosco Shipping Holdings Co. is eyeing Singapore’s Pacific International Lines as a potential takeover target as it looks to expand its footprint in developing markets.
|
|
|
|
Drivers for ride-hailing giants Uber and Lyft held a rally May 8 at a park near Los Angeles International Airport to protest what they say are declining wages as the companies rake in billions of dollars from investors. PHOTO: RINGO CHIU/ZUMA PRESS
|
|
|
-
Now that Uber Technologies Inc. and Lyft Inc. are trading on public markets, the companies are under pressure to achieve years of rapid growth. First they will have to figure out how to hang onto drivers.
-
Job growth at the smallest businesses has fallen to the lowest levels in nearly eight years as tiny companies struggle to attract and retain workers in the tightest U.S. job market in half a century.
|
|
|
|