|
The Morning Risk Report: How Compliance Programs Can Create a Better Business Culture
|
|
|
|
|
|
|
Michaela Ahlberg. PHOTO: COURTESY OF MICHAELA AHLBERG
|
|
|
Good morning. The lengths to which a company goes to strengthen its compliance program in the face of a government investigation can make a big difference in the outcome—sometimes to the tune of tens of millions of dollars. Take the cases of two Swedish telecom companies.
When Ericsson last month paid more than $1 billion in fines for violating the Foreign Corrupt Practices Act, a U.S. antibribery law, prosecutors said it had enhanced its compliance program, but not quickly enough. The company was required to retain an independent monitor to oversee the implementation of the new program for a three-year period.
[Continued below...]
|
|
|
By contrast, Telia Co. AB in 2017 agreed to pay about $965 million for violating the FCPA after receiving a 25% discount off its fine and it wasn’t required to retain a monitor. Telia had engaged in extensive remedial measures, prosecutors said, including by creating a comprehensive anticorruption compliance program and overhauling its governance corporate structure.
Michaela Ahlberg was Telia’s chief compliance officer at the time. Ms. Ahlberg, who is now chief compliance officer of Swedish medical device company Getinge AB, spoke with Risk & Compliance Journal's Dylan Tokar about her new book and lessons learned from Telia’s FCPA settlement.
|
|
|
|
Daimler Seen With Less Room for Charges, Compliance Issues
|
|
Daimler’s financial headroom has narrowed following the car maker’s warning that it would take up to €1.5 billion ($1.66 billion) in additional charges related to ongoing diesel investigations, according to ratings company S&P Global. “Rating pressure could increase if Daimler incurred further substantial special charges related to diesel proceedings or compliance issues,” S&P Global said.
S&P Global currently has an investment grade rating for Daimler, but with a negative outlook. Daimler said its 2019 earnings before interest and taxes fell to €5.6 billion in 2019 from €11.1 billion the year before.
After decades of churning out huge profits and setting the standard for premium cars, Germany’s top luxury auto makers are on the retreat, hurt by increased competition, allegations of foul play and tech-heavy upstarts.
—Nina Trentmann
|
|
|
|
The Trump International Hotel in Washington, D.C. PHOTO: MARK WILSON/GETTY IMAGES
|
|
|
-
District of Columbia Attorney General Karl Racine sued President Trump’s inaugural committee and his family business on Wednesday, alleging the committee abused its nonprofit status by overpaying the Trump Organization’s Washington hotel for event space to enrich the company.
-
U.S. air-safety regulators likely acted improperly in the way they authorized Southwest Airlines to begin flights between California and Hawaii last year, according to the main government agency that handles federal whistleblower complaints.
-
Victims of longtime national team physician Larry Nassar moved to dismiss USA Gymnastics’ bankruptcy proceedings Tuesday, a sign that the gymnasts and federation remain far apart in mediation talks to resolve legal claims stemming from sexual abuse by Nassar over a three-decade period.
-
Johnson & Johnson Chief Executive Alex Gorsky told analysts on a conference call the company’s performance was strong in 2019, especially in light of challenges including “today’s litigious environment”—a reference to lawsuits against J&J over the safety and marketing of various products such as opioids and baby powder. The company says it continues to work with a committee of U.S. state attorneys general to finalize last year’s agreement in principle for J&J to pay about $4 billion to resolve its portion of the opioid litigation.
-
SUNY Downstate Accused of Retaliating Against Whistleblower Surgeons
-
U.S. Moves to Let Airlines Ban Emotional Support Animals
|
|
|
|
Engineers inspect Huawei Technologies 5G equipment overlooking St. Paul's Cathedral during trials in London on March 15, 2019. PHOTO: SIMON DAWSON/BLOOMBERG NEWS
|
|
|
The U.S. is preparing for a longer and broader campaign to banish Huawei Technologies from next-generation 5G cellular networks around the world, as Washington faces resistance on the front line of its lobbying campaign, according to people familiar with the matter.
U.K. officials have indicated they would restrict but not forbid the use of Huawei equipment. The Trump administration sees Britain and Germany as bellwethers that could prompt other nations to welcome Huawei, a giant maker of cellular equipment that the U.S. considers a spying threat.
“The U.K. is our closest intelligence partner in national security in the world,” said Tim Morrison, who was the White House National Security Council’s senior director for European affairs until November. If Britain accepts Huawei 5G equipment, he said, “other countries will read that to say, well, if the U.K. can do it, then we can do it.”
|
|
|
-
Two United Nations officials called for further investigation into allegations that Washington Post owner Jeff Bezos’ phone was hacked using a WhatsApp account associated with Saudi Crown Prince Mohammed bin Salman, suggesting it was an attempt to influence news coverage of the kingdom.
|
|
|
|
Comptroller of the Currency Joseph Otting says he doesn’t see time to compromise with the Fed on Community Reinvestment Act requirements. PHOTO: ANNA MONEYMAKER/BLOOMBERG NEWS
|
|
|
A top U.S. banking regulator said Wednesday he plans to push ahead with a proposal to overhaul rules governing billions of dollars of lending in low-income neighborhoods despite objections from the Federal Reserve.
Comptroller of the Currency Joseph Otting said he doesn’t see time to compromise with the Fed regarding a December proposal that would update federal regulations under the Community Reinvestment Act. The proposal was crafted jointly by his office and the Federal Deposit Insurance Corp.
“There is a structured process now that’s in place,” Mr. Otting told reporters. He said the Office of the Comptroller of the Currency will receive comments on its proposal until March 9 and issue a final rule about 60 days later. “You know, there’s limited ways that the Fed could catch up with us on that.”
|
|
|
|
World leaders, business executives, bankers and policy makers are attending the 50th annual meeting of the World Economic Forum in Davos. PHOTO: JASON ALDEN/BLOOMBERG NEWS
|
|
|
European politicians said they are prepared to defend themselves and would retaliate against any American tariffs, after President Trump set his sights on the continent as the next front in his global fight over trade. With a first-phase China deal in his pocket, Mr. Trump said he wants to reach an agreement with the European Union before the U.S. presidential election, and threatened to levy tariffs if talks failed.
“They’re going to make a deal, because they have to. They have to,” Mr. Trump said in a television interview on the sidelines of the World Economic Forum. “They have no choice.”
France’s finance minister, Bruno Le Maire, who was also making the rounds at Davos, quickly shot back. “If we were to be hit by American tariffs, we would have no choice but to retaliate,” he told The Wall Street Journal.
Executives and board members have worried that economic-policy decisions could hinder their companies’ growth opportunities in the year ahead.
|
|
|
|
People wore masks in Beijing on Wednesday. PHOTO: WU HONG/SHUTTERSTOCK
|
|
|
Two more Chinese cities were put on lockdown by government authorities, expanding an unprecedented experiment to try to contain a fast-spreading virus that has killed at least 17 people and infected more than 500.
On Thursday, authorities in Huanggang—a city of 7.5 million people—said they won’t let long-distance trains and buses run from the urban center and will shut its public transportation system in the lockdown zone, effective midnight Friday local time. Ezhou, another neighboring city with just over a million residents, said it would enact similar restrictions.
Huanggang is about 35 miles east of Wuhan, a city of 11 million and a major hub for travel, where the new pneumonia-causing coronavirus originated. Wuhan just hours earlier halted outbound trains and flights and shut down its public-transportation system.
|
|
|
-
Tinder wants to allow users to send out an alarm when bad dates turn really ugly. The dating app plans to start offering users an option to hit a panic button, log check-ins and even summon authorities. To offer the service, Tinder parent company Match Group is taking a stake and board seat in an app called Noonlight that tracks the location of users and notifies authorities in the event of safety concerns.
|
|
|
|
Blackstone Group Chief Executive Stephen Schwarzman said businesses need to take action on climate change, and that the firm is looking across its vast portfolio of companies to improve sustainability. PHOTO: JASON ALDEN/BLOOMBERG NEWS
|
|
|
Blackstone Group Chief Executive Stephen Schwarzman said it is clear that the climate is changing and businesses need to take action.
“You can’t watch the news literally anywhere without seeing giant fires and storms happening on a regular basis,” Mr. Schwarzman said at a Wall Street Journal event at the World Economic Forum. “There’s little doubt that something very profound appears to be going on, and it ought to be addressed.”
|
|
|
-
Hallmark Channel parent CEO Bill Abbott is leaving, Hallmark Cards Inc. said, weeks after the channel found itself in a firestorm of controversy over commercials featuring a same-sex wedding ceremony. Mr. Abbott’s departure as president and chief executive of Crown Media Family Networks will be effective on Friday, Hallmark Cards said Wednesday.
|
|
|
|
Boeing Chief David Calhoun, seen in 2017, said a new recommendation of simulator training drove the revised date for the MAX’s return to service. PHOTO: CHRISTOPHER GOODNEY/BLOOMBERG NEWS
|
|
|
Boeing Chief Executive David Calhoun expressed confidence the 737 MAX would eventually fly passengers again despite repeated delays in winning regulatory approval for the troubled jet.
“It will fly safely,” Mr. Calhoun said Wednesday, speaking publicly for the first time since taking over the top job at the plane maker last week. “When that happens, and pilots get on that airplane and support that airplane, I believe passengers will follow.”
Mr. Calhoun said the company didn’t see a risk the plane wouldn’t resume service, even as it endures heightened scrutiny by the Federal Aviation Administration and overseas regulators. “I’m all in on it, and the company’s all in on it, and I believe the FAA is all in on it,” he told reporters.
|
|
|
|
Union members joined McDonald’s workers in a march demanding higher wages and union rights in Los Angeles in December. PHOTO: PATRICK T. FALLON/REUTERS
|
|
|
-
The share of American workers in labor unions fell to a fresh record low last year, despite an uptick in the ranks of unionized state-government employees. The number of union members fell by 170,000 in 2019—a year when U.S. employers added more than 2.1 million jobs—reducing the share of the workforce in labor unions to 10.3%, the lowest portion on record since 1983, the Labor Department said Wednesday. Overall union membership rates have trended at record lows for a decade.
-
Fashion retailer Express Inc. said it would close about 100 stores by 2022, sending its share price up more than 20%.
|
|
|
|
|
|