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The Morning Risk Report: J&J Slammed by Concern Over Baby Powder Safety |
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J&J executives and lawyers have long insisted its signature baby powder is safe and asbestos-free. PHOTO: GETTY IMAGES
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Good day. Johnson & Johnson faced continued concerns on Wall Street about the threat posed by lawsuits over the safety of the company’s signature baby powder. Shares fell 2.9% Monday, after dropping 10% Friday following news reports saying J&J knew for years some of its talcum powder contained asbestos. The slide continued even though J&J mounted an aggressive counterattack, including taking out full-page newspaper ads.
The plunge, which has cut J&J’s market capitalization by $50.2 billion, illustrates the risk companies take fighting litigation tooth-and-nail, rather than settling. Companies sometimes calculate it is better to resolve sprawling litigation with one payout rather than face the expense and reputational damage of taking dozens of cases to trial. J&J executives and lawyers have long insisted the signature powder is safe and asbestos-free.
[Continued below…]
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Any acknowledgment that the powder isn’t safe could imperil not just sales but the entire company’s image, marketing experts say. Several analysts have minimized concerns about the lawsuits’ potential financial impact. But the downside to J&J’s steadfast defense has been repeated legal and public-relations hits.
“You’re taking a product you used to associate with good health or being clean, and all of a sudden, you associate it with cancer,” said Witold Henisz, a management professor at the University of Pennsylvania’s Wharton School.
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| From Risk & Compliance Journal |
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UBS Fined $15 Million Over Anti-Money Laundering Systems |
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David Solomon, the new chief executive officer of Goldman Sachs Group Inc., was formerly the co-head of Goldman's investment banking division. PHOTO: JUSTIN CHIN/BLOOMBERG NEWS
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Goldman Sachs Ignored 1MDB Warning Signs to Pursue
Business |
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A push for Asian business and lax oversight of partners led Goldman Sachs Group Inc. to speed past warning signs in its dealings with a corrupt Malaysian invsetment fund, documents and interviews show.
Goldman has blamed rogue employees over the allegations, and said Monday it would fight new allegations lodged in Malaysia. The bank said it was misled by officials at the fund, 1Malaysia Development Bhd., or 1MDB.
Gaps in Goldman's compliance systems and a postcrisis push into emerging markets put Goldman on a collision course with 1MDB, according to dozens of interviews and a review of government and internal Goldman documents.
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North Korea Squeezes Its Coal to Outlast Sanctions |
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Canada Says Glencore Unit Hid Congo Risks From
Investors |
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Canada’s main stock-market regulator said a Glencore PLC-controlled copper-mining company hid from investors the risks associated with its reliance on Israeli businessman Dan Gertler in the Democratic Republic of Congo.
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U.S., Ukraine Press Europe to Increase Russia
Sanctions |
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U.S. and Ukrainian officials called for tougher measures against Russia over its seizing of Ukrainian naval vessels in the Black Sea. The incident drew little more than condemnations from Western capitals.
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T-Mobile Takeover of Sprint Clears U.S. National Security
Panel |
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Possible Drone Collision Renews Focus on Safety Systems |
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U.S. government and industry efforts to prevent accidents between planes and drones are receiving heightened attention in the wake of a possible collision last week between an Aeromexico jetliner and an unmanned aircraft.
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Hitachi to Take On GE With $6.4 Billion Power Deal |
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Hitachi Ltd. agreed to acquire a power-grid unit from Switzerland-based ABB Ltd. for $6.4 billion, as the Japanese company beefs up its industrial portfolio against rivals such as General Electric Co.
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Jack in the Box Explores Selling Itself |
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RightHand Robotics Raises $23 Million for Warehouse Automation Expansion |
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Shell CIO to Begin Testing AI-Enabled Drones at Houston
Plant |
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Royal Dutch Shell PLC is testing how artificial intelligence-enabled drones could help prevent costly maintenance problems on expensive equipment while improving worker safety, said Jay Crotts, the oil company’s executive vice president and global chief information officer.
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Leslie Moonves, the former chairman and chief executive of CBS Corp., in Sun Valley, Idaho, on July 11. PHOTO: DREW ANGERER/GETTY IMAGES
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Ex-CBS CEO Leslie Moonves Won’t Receive Any Severance
Payment |
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Elon Musk’s Boring Co. Faced Questions Over SpaceX Financial Ties |
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Elon Musk’s tunnel-digging venture, the Boring Co., is being pulled into the billionaire entrepreneur’s controversial practice of spreading overlapping assets across his disparate technology firms.
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Nissan CEO Rebuffs Renault Request to Call Shareholder
Meeting |
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Netflix Hires Former ABC Entertainment Boss, Stepping Up
Rivalry |
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Netflix Inc. has tapped former ABC Entertainment President Channing Dungey as a vice president of original content, the latest sign of a growing rivalry between the streaming-video giant and ABC parent Walt Disney Co.
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