Good morning. Companies that have invested in the right technology may have an advantage when it comes to investigating potential misconduct by employees while coronavirus-related travel restrictions remain in place, corporate compliance veteran Michael Ward tells Risk & Compliance Journal’s Dylan Tokar.

Data analytics platforms, which place troves of information at the fingertips of in-house investigators, can minimize the need to dispatch lawyers to overseas offices to gather evidence, according to Mr. Ward, who oversaw the development of such a tool while serving as the chief compliance officer of Juniper Networks Inc.

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Mr. Ward, who joined the law firm Vinson & Elkins LLP as a partner this month, had been hired by Juniper in the midst of foreign bribery probes by the U.S. Justice Department and U.S. Securities and Exchange Commission. Before Juniper, which was later given credit for the steps it took to strengthen its compliance systems, Mr. Ward held in-house compliance positions at Cisco Systems, Adobe, McKesson and Target.

Mr. Ward shared the risks posed to compliance by the pandemic and how companies are using technology and analytics to improve their programs.

Officials in charge of enforcing a U.S. antibribery law predicted that the novel coronavirus would create incentives for corruption and urged companies to keep their guards up.

“Reporting and detecting misconduct continue to be very important things for companies to do,” said David Fuhr, an assistant chief of the U.S. Justice Department’s anti-foreign-bribery unit. Prosecutors are trying to be reasonable given the conditions companies face as a result of the pandemic, but “compliance has to continue,” he said.

China offered a new route for producers of medical goods to obtain export approval, a move that could help ease recent shipment delays of face masks, test kits and other critical medical equipment to fight coronavirus to the U.S. and other countries. Makers of medical gear in China that met the national standards of their foreign buyer can apply for export approval through an industry association, Chinese authorities said Sunday.

This would allow manufacturers to bypass an earlier rule that required exporters to obtain a certification from Chinese medical-product regulators. The policy, introduced on March 31 to boost quality control of Chinese medical-supplies exports, led to a significant shipment bottleneck in items including masks, ventilators, surgical gowns and testing reagents, essential for medical workers world-wide to fight the coronavirus pandemic.

• A growing pile of lawsuits are challenging the strict measures that states have imposed to contain the coronavirus pandemic, presenting a legal test for orders that governments say save lives, but that have drawn protests by conservative groups over the devastating economic effects. The lawsuits come as some U.S. states take tentative steps toward reopening.
   
• Private equity and hedge funds cannot tap taxpayer-backed loans intended to support small businesses struggling due to the coronavirus pandemic, the U.S. Small Business Administration has ruled. Hedge funds and private-equity firms aren’t eligible for the aid because they are “primarily engaged in investment or speculation,” according to a new rule from the SBA. The SBA also says on Paycheck Protection Program loan applications that companies in bankruptcy aren’t eligible for the emergency funding. 
   
• ViacomCBS investors are accusing media mogul Shari Redstone of forcing through the merger of CBS and Viacom last year to protect her investment in Viacom, according to a lawsuit seeking class-action status.
   
• China’s top business and commerce regulator is investigating Luckin Coffee, according to a person familiar with the matter, after the upstart coffee chain stunned investors by revealing that much of its 2019 sales were fabricated.
   
• Brazil’s popular justice minister resigned after accusing President Jair Bolsonaro of political interference in federal criminal investigations, triggering a political conflict as the right-wing government struggles to contain the coronavirus pandemic.

The International Accounting Standards Board proposed relief to companies accounting for rent concessions they have received on leases due to the coronavirus pandemic. Companies across industries have struggled to pay rent or chosen to skip payments to boost liquidity as pandemic-related lockdowns eat into revenue.

The IASB’s proposal would amend the existing 2016 standard on leases, which requires lessees to evaluate individual lease contracts to decide if they are deemed lease modifications. If they are considered modifications, companies would need to use a revised discount rate to remeasure lease liabilities. 

The Federal Communications Commission ordered four Chinese state-owned telecommunications operators to explain why it shouldn’t withdraw permission for them to operate in the U.S., paving the way for likely license revocations. The FCC sent orders to the U.S. units of state-owned carriers China Telecom Corp. and China Unicom, as well as to Pacific Networks Corp. and ComNet (USA) LLC, both of which are controlled by Chinese government investment firm Citic Group Corp.

The FCC said its orders “give the companies the opportunity to demonstrate that they are not subject to the influence and control of the Chinese government.” The move is part of a recent push by U.S. regulators to root out Chinese links to U.S. telecommunications infrastructure.

Changes to the nation’s financial system, put in place after the 2008 crash to prevent a repeat, have sapped banks’ tolerance for the kinds of risks that are necessary to bring about a recovery, according to regulators, experts and bank executives themselves.

Regulators ringfenced Wall Street from Main Street after 2008, to insulate the real economy from the financial one. The costs of those changes have become clear over the past month: sustained turbulence across Wall Street securities-trading, credit drying up for some of the country’s largest corporations and the Fed taking unprecedented action, in some cases sidestepping banks that have proven to be imperfect conduits for its rescue efforts.

• The coronavirus shutdown will induce the sharpest economic downturn and push the U.S. budget deficit to the highest levels since the 1940s, the Congressional Budget Office projects. The economy is likely to shrink 12% in the second quarter—a 40% drop if it were to persist for a year—and the jobless rate will average 14%, the nonpartisan research service said Friday. Job losses will come to 27 million in the second and third quarters.
   
• Millions of Americans are skipping their credit-card payments as the coronavirus pandemic puts them out of work. Banks and other lenders that for years relied on heavy consumer spending to create big profits are preparing to struggle alongside their customers.
   
• Companies have spent much of 2020 racing to shore up supply chains as the coronavirus shut down much of the world, but business leaders say they expect problems to remain even as countries start to reopen their economies.

At least 13 of the public companies that received coronavirus hardship loans said they would return the money amid mounting scrutiny, while some of the smaller public companies said they needed the money to keep employees from losing their jobs.

The decisions are the latest twists in the rushed and turbulent rollout of the federal government’s Paycheck Protection Program, a portion of last month’s $2 trillion stimulus package intended to help small businesses and limit layoffs through the coronavirus pandemic. Lawmakers and independent business owners have criticized public companies for tapping a program that quickly ran out of funds.

Lodging companies affiliated with a Dallas businessman that combined have received more than $68 million under the program, however, say they are keeping the money.

Companies trying to recover from coronavirus-driven lockdowns will face hurdles in shipping markets roiled by deep capacity cuts and weeks of disruptions in global trade, the chief executive of the world’s largest logistics company said.

Frank Appel, chief of DHL parent Deutsche Post, said in an interview last week that freight volumes would increase significantly as Europe and the U.S. begin to ramp up factory production and reopen stores.

But “the shortfall of every capacity will last longer,” Mr. Appel said, especially for the high-value goods such as industrial parts and electronics often transported in the bellies of passenger planes.

• Fewer Products, Localized Production—Companies Seek Supply-Chain Solutions

Two influential proxy advisers are recommending Boeing shareholders vote against key board members to protest the plane maker’s handling of the 737 MAX debacle.

Glass Lewis, recommended voting against Chairman Larry Kellner, a former airline executive who previously oversaw the board’s audit committee. “We believe the audit committee failed to mitigate the risk posed by management’s decisions and should be held accountable for its oversight,” the firm wrote.

Institutional Shareholder Services, meanwhile, recommended shareholders vote against four longtime board members who served during the 737 MAX’s development and rollout, including Edmund Giambastiani Jr., a retired Navy admiral who heads a safety committee Boeing formed in the wake of the twin MAX crashes.

• Senior executives are taking markedly different approaches to sharing the economic pain suffered by employees amid the pandemic. Chief executives at 184 companies within the S&P Composite 1500 have announced temporary reductions in their salaries, ranging from 10% to 100%, with a median cut of 50%, according to a Wall Street Journal analysis of data from research firm MyLogIQ and securities filings. 
   
• AT&T Chief Executive Randall Stephenson said he will step aside at the end of June, handing leadership of one of the world’s largest media and telecommunications companies to longtime deputy John Stankey.

• Facebook is rolling out a new video-chat feature to rival Zoom, part of a suite of new offerings aimed at users kept home by the coronavirus. The company said that it is launching Messenger Rooms, an invitation-based group video chat that can accommodate up to 50 people, along with additional video options for gamers and singles looking to chat with matches on Facebook Dating. 
   
• Hertz Global has hired advisers for talks with lenders on restructuring the company’s $17 billion of debt, according to people familiar with the matter, as the coronavirus pandemic and government restrictions on travel have devastated the rental-car industry.
   
• Diamond Offshore Drilling Inc. filed for bankruptcy protection Sunday, as the plunge in oil prices and the downturn in business activity because of the coronavirus pandemic have sapped demand for its offshore drilling services.
   
• The owner of theater chain CMX Cinemas has filed for bankruptcy protection, saying it needs breathing room from movie studios and landlords because of the economic crisis triggered by the coronavirus pandemic.

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