|
The Morning Risk Report: Whistleblower Alleges Actor, Cosmetics-Empire Heir Evaded Taxes
|
|
|
|
|
|
|
Actor Kevin Costner is accused of hiding money in a numbered Swiss bank account to evade taxes, an accusation he denies. PHOTO: SAMUEL DE ROMAN/GETTY IMAGES
|
|
|
Good morning. A convicted banker who collected the largest-ever whistleblower payout for reporting tax cheats accused actor Kevin Costner and an heir to a cosmetics empire of tax evasion.
In a lawsuit filed Thursday, Bradley Birkenfeld, who worked for UBS Group AG in Switzerland, alleges that Mr. Costner, an Academy Award-winning actor and director, and Leonard Lauder, chairman emeritus of the Estée Lauder Cos., were among thousands of Americans who held secret, numbered Swiss bank accounts for the purpose of evading U.S. taxes.
[Continued below...]
|
|
|
|
Mr. Birkenfeld had referenced these tax-evasion allegations in a planned book, but said the assertions were removed when lawyers for Mr. Costner and Mr. Lauder told Mr. Birkenfeld’s publishing house that they were false. In the suit, Mr. Birkenfeld claims the “censorship” prompted by the lawyers’ actions diminished the market for the book and delayed its publication. He seeks at least $75,000 in damages.
The allegations demonstrate the lingering reverberations of Mr. Birkenfeld’s revelations made more than a decade ago, which resulted in one of the largest tax-evasion investigations in U.S. history. Mr. Birkenfeld in 2012 was awarded a record $104 million whistleblower payout. He earlier agreed to plead guilty to one count of conspiring with UBS clients to evade taxes and served 31 months in federal prison.
|
|
|
|
From Risk & Compliance Journal
|
|
|
Anti-Money-Laundering Controls Play Bigger Role in Credit Ratings
|
|
Lapses in anti-money-laundering and financial-crimes controls are more likely to affect a banks’ credit rating than almost any other nonfinancial factor, according to Fitch Group Inc., Risk & Compliance’s Kristin Broughton reports.
The findings from the credit-ratings firm were part broader analysis of the impact that environmental, social and governance factors have on issuer credit scores. The evaluation categories include energy management, labor relations, management strategy, among other metrics.
“Financial crimes compliance lapses can be serious, material and can drive credit ratings,” Monsur Hussain, senior director in the financial institutions group at Fitch, said in an interview.
|
|
|
Loomis Probes Possible Money Laundering After AGM Allegations
|
|
Swedish cash-handling company Loomis AB said it has launched an investigation into possible money laundering after allegations against the company were made at its annual general meeting.
“During [Wednesday’s] AGM, a Danish journalist put forward allegations that Loomis had been providing cash to an exchange office in Denmark, which was used in an advanced money-laundering scheme,” the company said. “Loomis take any allegations on money laundering very seriously and Loomis has therefore immediately decided to launch an internal as well as an external investigation into the matter.”
—Dominic Chopping
|
|
|
|
The North Korean cargo ship Wise Honest, which the U.S. on May 9 said it seized, alleging it had been used to illicitly transport coal from the country in violation of U.S. international sanctions. PHOTO: U.S. DEPARTMENT OF JUSTICE/ASSOCIATED PRESS
|
|
|
-
U.S. authorities seized a North Korean shipping vessel, alleging it had been used to illicitly transport coal from the country in violation of U.S. and international sanctions, the Justice Department said, in another escalation of tensions between the U.S. and North Korea, as the U.S. tries to block Pyongyang’s ability to circumvent sanctions and access the international financial system.
-
The French government plans to give regulators here sweeping power to audit and fine large social-media companies like Facebook Inc. if they don’t adequately remove hateful content—ratcheting up global oversight of Silicon Valley.
-
Money laundering pushed house prices up roughly 5% in the Canadian province of British Columbia last year, according to government reports, highlighting the influence of a growing tide of dirty money on one of North America’s hottest real-estate markets and Canada’s economy.
-
The Federal Housing Administration is seeking to clarify rules and compliance standards for its mortgage program in an effort to get banks to start making more loans to the lower-income and first-time home buyers it serves.
-
In an effort to combat misinformation online, Singapore has passed a law requiring Facebook Inc., Alphabet Inc.’s Google, Twitter Inc. and other social-media companies with regional headquarters in the country to rapidly issue corrections when users post items the government deems false.
-
Online child-care marketplace Care.com Inc. said Thursday it planned to overhaul its business model to include in-depth background checks and other screening procedures for caregivers following heightened scrutiny of its vetting practices.
|
|
|
|
SEC Chairman Jay Clayton has made it a priority to make it more attractive for companies to go public. PHOTO: MARK WILSON/GETTY IMAGES
|
|
|
The Securities and Exchange Commission voted to advance a proposal that would exempt public companies with less than $100 million in annual revenue from regular outside audits, part of a broader effort to entice more companies to go public.
Under the plan, smaller public companies would get a pass from outside audits of their systems for preventing accounting errors and fraud, easing rules put in place nearly two decades ago in response to the Enron Corp. and WorldCom accounting frauds.
|
|
|
|
Facebook last year spent nearly $20 million to protect Mark Zuckerberg and his family, based on publicly disclosed numbers. PHOTO: STEPHEN LAM/REUTERS
|
|
|
-
Tech companies are spending more to protect executives, as so-called swatting attacks point to growing animosity and vulnerability in Silicon Valley. Tech companies have become targets in part because they have become more active in removing hate speech and disinformation from their platforms—moves that have triggered accusations of bias from those affected by their policies. The industry also is increasingly blamed on a range of issues, from privacy abuses to income inequality.
-
Chris Hughes, who helped Mark Zuckerberg create the company that eventually became Facebook Inc., is calling for the social-media giant to be broken up. In a nearly 6,000 word opinion essay published online Thursday in the New York Times, Mr. Hughes said the Facebook chief executive has gained power that is both “unprecedented and un-American.” Facebook said accountability comes with success but that the right way to enforce it isn’t through a corporate breakup but by crafting new rules for the internet.
-
Uber Technologies Inc. priced its initial public offering at $45 a share, near the low end of its expected range as the ride-hailing giant grapples with choppy markets and the disappointing debut of its chief rival.At that price, Uber, which had been targeting a range of $44 to $50 a share, would raise $8.1 billion and command a valuation of about $82 billion. That valuation makes it the largest U.S.-listed IPO since Alibaba Group Holding Ltd. went public in 2014. Still, it is less than the $90 billion to $100 billion the ride-hailing giant had earlier targeted.
-
From the world’s biggest miners to German car makers and Japanese manufacturers of iridescent powder for cosmetics, producers around the world are bracing for collateral damage as the U.S. escalates its tariff fight with China. The Trump administration raised tariffs Friday on $200 billion of Chinese goods, sending tremors beyond the world’s two leading economies through Asia and Europe. The increase from 10% hits thousands of Chinese products in categories as disparate as seafood, metals and machinery. Consumer products being hit are as varied as laptops, handbags and cosmetics.
-
Many big U.S. companies say they are prepared for the U.S. to impose higher tariffs on $200 billion of Chinese imports, with some saying their annual financial forecasts had anticipated the trade friction. Executives at Illinois Tool Works Inc., Dollar Tree Inc. and Honeywell International Inc. are among those who say they have planned for the worst and already factored the increase in tariffs—which are set to rise to 25% from 10%—into earnings guidance for the year.
|
|
|
|
An executive discussed the Amazon Echo Dot smart speaker during its unveiling in September. A version for children offers parental controls and family-focused features. PHOTO: ANDREW BURTON/BLOOMBERG NEWS
|
|
|
-
Amazon.com Inc. is improperly recording and preserving conversations of young users through its Echo Dot Kids devices, according to a complaint expected to be filed with regulators by a coalition of privacy and child-advocacy groups. The complaint alleges Amazon stores the data even after parents actively try to delete it.
-
The Federal Communications Commission voted to deny an application by China Mobile Ltd.’s U.S. arm to provide international calls and other services. U.S. officials cited law enforcement and national security risks, saying the company is owned by the Chinese government and vulnerable to exploitation, influence and control.
-
A Chinese national and an unnamed co-defendant were indicted on Thursday on computer hacking charges related to a campaign to breach large U.S. businesses, including the 2015 theft of data from health insurer Anthem Inc., the Justice Department said.
-
As companies struggle to fill open cybersecurity jobs around the U.S. they are casting a wider net to find and develop experts, pursuing workers without traditional four-year degrees or formal experience to help them protect computer networks and customer data.
|
|
|
|
Jessica Richman, along with co-CEO Zac Apte, is on leave from uBiome Inc. after the suspension of two of its tests. PHOTO: NIKKI RITCHER FOR THE WALL STREET JOURNAL
|
|
|
UBiome Inc. sent a letter to investors seeking to reassure them that the company is taking steps to restore its credibility, including introducing a new code of ethics in the next few days, after the health-care startup’s offices were searched last month by state and federal authorities.
The San Francisco-based lab testing company announced last week that a special committee of the board is conducting an independent investigation into uBiome’s billing practices, which have come under scrutiny by the Federal Bureau of Investigation, the California Department of Insurance, and health insurers.
|
|
|
|
Year-over-year growth in average hourly earnings has been above 3% every month since August after lagging that pace for nine straight years. PHOTO: LUKE SHARRETT/BLOOMBERG NEWS
|
|
|
U.S. wage growth is set to pick up over the next year, as economists expect a tight labor market will continue to push up workers’ pay.
“We continue to hear from manufacturers about how difficult it is to attract talent in the tight labor market, a challenge that we do not see changing in the near future,” said Chad Moutray, chief economist at the National Association of Manufacturers.
|
|
|
|
Harry’s focuses on personal-care products for men, such as razors and shaving cream, but also makes Flamingo razors for women. PHOTO: BEBETO MATTHEWS/ASSOCIATED PRESS
|
|
|
-
The struggling maker of Schick razors is buying Harry’s Inc., an upstart rival that started selling razors online and has recently expanded into traditional retail stores. Edgewell Personal Care Co. said it would pay $1.37 billion for the six-year-old company, which, along with Dollar Shave Club, has shaken up the U.S. razor market.
-
McDonald’s Corp. has bought out a partner in India, bringing an end to an ugly battle that saw the local licensee using the burger behemoth’s trademarked branding and menu for more than a year after it was told to stop. The battle has weighed on McDonald’s expansion in India, which as a fast-growing economy of 1.3 billion people offers a huge opportunity.
-
Chevron Corp. is bowing out of the bidding to buy Anadarko Petroleum Corp., setting the stage for Occidental Petroleum Corp. to win one of the most high-stakes energy-deal dramas in years.
-
When Viacom Inc. struck a distribution deal with DirecTV owner AT&T Inc. this spring, it did something that would have been unthinkable for a major media company not long ago: It accepted a substantial decrease in payments for carriage of its channels.
|
|
|
|