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The Morning Risk Report: Barclays Resolves SEC's Asian Hiring Case
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Barclays bank offices in the Canary Wharf financial district in London. PHOTO: TOBY MELVILLE/REUTERS
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Good morning. The U.S. Securities and Exchange Commission ended a busy week on Friday with a slew of enforcement actions, including Foreign Corrupt Practices Act settlements with Barclays and Canadian clean-fuel tech company Westport Fuel Systems Inc. The agency will reach the end of its fiscal year Monday, and other last-minute settlements may yet be announced.
Barclays agreed to pay $6.3 million to settle charges from the U.S. securities regulator it violated bribery laws by hiring the children and relatives of high-ranking decision makers to win business. The Justice Department also had opened a probe into Barclays’s hiring practices in Asia. A spokesman for the agency declined to comment on the status of that investigation.
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Separately, Westport Fuel Systems and its former chief executive, Nancy Gougarty, agreed to pay a combined $4.1 million to settle charges related to bribes paid to a Chinese government official. Ms. Gougarty—who retired from the company in January—and others at Westport engaged in a scheme to bribe the Chinese official in an effort to bring in business, according to the SEC.
Other SEC enforcement actions on Friday included a $20 million settlement with Herbalife, which resolved allegations it misled investors about how its business in China worked, closing the book on a long legal fight that featured activist investors who bet against the company based on a similar theory.
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Traffic at the San Francisco-Oakland Bay Bridge toll plaza. Four auto makers agreed in a deal with California to stronger emissions targets than sought by the Trump administration. PHOTO: JUSTIN SULLIVAN/GETTY IMAGES
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Car makers facing a federal antitrust probe for their auto emissions deal with California will meet with the Justice Department next week, according to people familiar with the matter, as the department itself faces questions about its decision to press an issue with political overtones.
The meetings would mark the first substantive discussions between the two sides since the Justice Department sent an inquiry letter a month ago seeking information about an agreement on greenhouse-gas emissions that Ford, Honda Motor, BMW and Volkswagen reached recently with the California Air Resources Board.
The four auto makers agreed in the pact to cut their emissions by 3.7% annually for their model years 2022 to 2026. The targets, announced in July, are lower than those mandated by Obama-era rules, but stricter than those sought by the Trump administration, which wants to unwind the Obama regime as well as void California’s longstanding ability to set its own emissions standards.
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Congressional antitrust investigators are scrutinizing plans by Google to use a new internet protocol because of concerns that it could give the company a competitive advantage by making it harder for others to access consumer data.
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Fiat Chrysler agreed to pay $40 million to settle claims by U.S. securities regulators that it misled investors by inflating its monthly sales figures. In a filing Friday, the U.S. Securities and Exchange Commission said it found that Fiat Chrysler “inflated monthly vehicle sales to customers by paying dealers to report fake sales, which were later ‘unwound’ or reversed.”
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Mylan has agreed to pay $30 million to settle charges that it allegedly failed to disclose a possible loss related to a previous federal probe into whether the drugmaker overcharged Medicaid for its EpiPen treatment. The Pennsylvania company agreed to pay $465 million back in 2016 to settle allegations from the U.S. Department of Justice that it overcharged the government.
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A federal judge in New York on Friday granted a new trial to Mark Nordlicht, the co-founder of defunct hedge fund Platinum Partners who was convicted of fraud earlier this year. Whether Mr. Nordlicht is tried for a second time depends on if prosecutors from the Eastern District of New York decide to retry the case. A federal jury in July found Mr. Nordlicht and David Levy, Platinum’s co-chief investment officer, guilty of securities fraud, conspiracy to commit securities fraud and conspiracy to commit wire fraud.
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Lisa Bryant holds the transaction email she received on her mobile phone. PHOTO: SARAH HOFFMAN FOR THE WALL STREET JOURNAL
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The online ads that you willingly click on are more likely to make you a scam victim than the robocalls flooding your phone with urgent messages.
A new study of consumer behavior toward fraudulent schemes found that scammers are far more likely to succeed in engaging and stealing money from potential targets by using websites and social media than through the phone calls and emails they have long used.
That tendency has made online marketplaces like Craigslist and eBay among the most lucrative venues for scammers to hunt for targets, along with social-media platforms, the study found. Such scammers often run official-looking websites with fake consumer reviews, and try to lure targets with items including used cars, vacation rentals and tickets to popular concerts and sporting events.
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CVS has stopped selling Zantac products at its drugstores, citing a recent alert by the U.S. Food and Drug Administration that the popular heartburn drug could contain low levels of a probable human carcinogen.
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Concerns that planes could be targeted in cyberattacks are prompting U.S. officials to re-energize efforts to identify airliners’ vulnerability to hacking.
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PricewaterhouseCoopers LLP is planning to take a closer look at auditor partners’ pay and bonuses as part of a wider review of how its U.K. business is operating. PHOTO: GETTY IMAGES
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PricewaterhouseCoopers is considering changes to how its U.K. audit partners are being remunerated to avoid potential conflicts of interest. The potential changes to auditor partners’ pay and bonuses are part of a wider review of how its U.K. business is operating.
Karthik Ramanna, a professor of business and public policy at the University of Oxford’s Blavatnik School of Government, in a report published Friday called for audit firms to resort to independent, external remuneration committees to advise on audit partners’ pay.
His recommendations come amid increased scrutiny in Britain over the quality of the audits provided by PwC and the other Big Four accounting firms: Deloitte & Touche, Ernst & Young and KPMG.
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A Missouri lawmaker introduced a bill Friday in Congress requiring the Financial Accounting Standards Board to formally study the impact of new accounting standards before finalizing them.
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Charles Scharf takes over as Well Fargo’s chief executive six months after Timothy Sloan resigned. PHOTO: KYLE GRILLOT/BLOOMBERG NEWS
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Wells Fargo named Bank of New York Mellon Corp. Chief Executive Charles Scharf as its new CEO, ending a six-month search for a leader capable of restoring the bank’s battered reputation and improving its standing with regulators.
Wells Fargo said Mr. Scharf will join the bank as president and CEO on Oct. 21. He succeeds C. Allen Parker, Wells Fargo’s general counsel, who has been serving as interim chief since Timothy Sloan resigned in late March.
Mr. Scharf has a tough job ahead of him at Wells Fargo, which has been struggling to right itself since a fake-account scandal erupted at the bank three years ago. Atop his agenda is getting the bank back in the good graces of regulators unsatisfied with its response to problems exposed by the sales scandal. The bank’s operations also have suffered, and falling interest rates threaten to further cut into profit.
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A delivery person for DoorDash in San Francisco, Calif. The company said it suffered a data breach on May 4. PHOTO: JASON HENRY FOR THE WALL STREET JOURNAL
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Food-delivery startup DoorDash said an unauthorized third party accessed user data in May, affecting roughly 4.9 million consumers, merchants and delivery people on its platform.
The unauthorized third party could have accessed names, contact information, addresses, and the last four digits of consumer payment cards or bank accounts though DoorDash said full payment card details or bank-account information weren’t accessed in the breach. The driver’s license numbers of roughly 100,000 delivery people may have also been taken.
The data breach happened on May 4, the company said.
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After the Lion Air crash, Air Force officials were worried their tanker, the KC-46A Pegasus, shared the same problems as Boeing’s 737 MAX. PHOTO: LINDSEY WASSON/REUTERS
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Boeing engineers working on a flight-control system for the 737 MAX omitted key safeguards that had been included in an earlier version of the same system used on a military tanker jet, people familiar with the matter said.
Accident investigators have implicated the system, known as MCAS, in two deadly crashes of the jetliner that killed a total of 346 people.
The engineers who created MCAS more than a decade ago for the military refueling plane designed the system to rely on inputs from multiple sensors and with limited power to move the tanker’s nose—which one person familiar with the design described as deliberate checks against the system acting erroneously or causing a pilot to lose control.
“It was a choice,” this person said. “You don’t want the solution to be worse than the initial problem.”
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