|
The Morning Risk Report: Lithuanian Man Pleads Guilty in $100 Million Fraud Against Google, Facebook
|
|
|
|
|
|
|
Evaldas Rimasauskas in district court in Vilnius, Lithuania, in May 2017. PHOTO: PETRAS MALUKAS/AGENCE FRANCE-PRESSE/GETTY IMAGES
|
|
|
Good morning. A Lithuanian man pleaded guilty to his role in a complex wire fraud scheme that resulted in the theft of over $100 million from Alphabet Inc.’s Google and Facebook Inc., prosecutors said Wednesday.
Evaldas Rimasauskas, 50, pleaded guilty to one count of wire fraud in connection with a scheme that duped the two tech giants into wiring millions of dollars into foreign bank accounts between 2013 and 2015, according to prosecutors in the Southern District of New York. He also agreed to forfeit about $49.7 million he obtained in relation to the wire fraud charge, according to court records.
[Continued below...]
|
|
|
|
Mr. Rimasauskas orchestrated the scheme by creating a company in Latvia with the same name as a hardware manufacturer with which Google and Facebook regularly did millions of dollars in business, prosecutors said. He then sent email messages to employees at the two companies, directing them to wire payments for bills Facebook and Google legitimately owed into bank accounts Mr. Rimasauskas controlled in Latvia and Cyprus, prosecutors said.
A Google spokesman said Wednesday that the company alerted authorities to the fraud after the company detected it and has recouped the funds. Facebook recovered most of the funds and has been cooperating with the investigation, a company spokeswoman said in a statement.
|
|
|
|
From Risk & Compliance Journal
|
|
|
Two South Korean Firms Plead Guilty in Fuel Price-Fixing Case
|
|
Two South Korean companies have agreed to plead guilty and pay $127 million in criminal and civil penalties for conspiring to fix prices on fuel supplied to U.S. military bases in their country, U.S. authorities said.
Hyundai Oilbank Co. Ltd. and S-Oil Corp. agreed to plead guilty to criminal charges of bid-rigging and fraud, and pay a total of roughly $75 million in penalties, the Justice Department said. The two companies also agreed to plead guilty to a civil antitrust charge and pay a total of $52 million, prosecutors said.
Previously, three other South Korean companies, SK Energy Co., GS Caltex Corp. and Hanjin Transportation Co. agreed to plead guilty and pay $236 million in criminal and civil penalties for their participation in the scheme.
|
|
|
Regulators, Investors Call for More Detailed Risk Disclosures
|
|
Companies are trending toward a “boilerplate,” one-size-fits-all approach when disclosing strategic risks, Robert Jackson, a Democratic commissioner of the U.S. Securities and Exchange Commission, said Wednesday.
Companies instead need to give investors more detailed information that reflects their strategic thinking on the subject of sustainability, he said. “We need, as a nation, as a society, to do better than boilerplate responses to the sustainability questions,” Mr. Jackson said at a corporate governance conference at the University of Delaware.
How boards oversee the setting of corporate strategy and disclosure of risks to investors is also a growing focus for large institutional investors, according to executives who participated in a panel discussion at the conference. One of the top issues Vanguard Group considers when engaging with companies in its funds is how they oversee and articulate company-specific risks, according to Glenn Booraem, Vanguard’s investment stewardship officer.
“We’re really trying to make sure that there is a broad range of material decisions or risk disclosure that is consistent and comparable so that those of us on the investor side can evaluate it over time,” Mr. Booraem said during the panel.
—Mengqi Sun
|
|
|
|
The decision continues a run of heavy antitrust enforcement from the European Union against Google, led by Margrethe Vestager, the commissioner of competition. PHOTO: JOHN THYS/AGENCE FRANCE-PRESSE/GETTY IMAGES
|
|
|
-
Google was penalized yet again by European antitrust regulators, this time with a €1.49 billion ($1.7 billion) fine for limiting how some websites could display ads sold by its rivals. Wednesday’s decision, which adds to a total of €6.76 billion ($7.67 billion) levied against Google in two other decisions since 2017, caps the last of the formal charges the European Union has filed so far against the tech giant in a nearly decadelong investigation into its practices.
-
Ethiopian air accident investigators are taking the unusual step of fast-tracking their probe into last week’s crash of a Boeing 737 MAX airliner amid global safety concerns around the jet and could issue a preliminary report on the accident as early as next week, the head of Ethiopia’s civil-aviation authority said.
-
The Defense Department Office of Inspector General said it had begun an investigation into whether acting Defense Secretary Pat Shanahan sought preferential treatment for his longtime former employer, Boeing Co., while serving in government. In a statement, the inspector general’s office said it would look into complaints that Mr. Shanahan “allegedly took actions to promote his former employer, Boeing, and disparage its competitors, allegedly in violation of ethics rules.”
-
India’s onetime jeweler to the stars, Nirav Modi, has been arrested in London and faces extradition to India to face allegations that he defrauded lenders of nearly $2 billion, in what Indian authorities say could be their country’s biggest-ever banking scam. Mr. Modi built a global jewelry empire selling high-end diamond bracelets, necklaces, earrings and rings in outlets from Mumbai to Manhattan. Indian authorities say it was built on a web of illegal trade-financing loans guaranteed by India’s state-owned Punjab National Bank.
|
|
|
|
Late Wednesday, Facebook said the video of the New Zealand mosque shootings revealed gaps in its handling of live broadcasts. PHOTO: PAUL SAKUMA/ASSOCIATED PRESS
|
|
|
-
Facebook Inc. said the gruesome video of the New Zealand mosque shootings revealed gaps in its handling of live broadcasts by users, but pushed back against the idea of setting up a time delay.
Guy Rosen, Facebook’s vice president for integrity, said in comments posted late Wednesday that the company’s artificial intelligence tools failed to catch a video of the terrorist attack in Christchurch last week that was aired live on the social media platform by the shooter. In an attack on two mosques, 50 people died.
-
UBS Group AG Chief Executive Sergio Ermotti warned of a weak start to the year for the bank’s investment-banking and wealth-management units, citing “one of the worst first quarter environments in recent history.” The comments, prepared for a banking conference in London, sent UBS shares down, and underscored the challenges facing Switzerland’s biggest bank as it also confronts legal entanglements in France and the U.S. In his speech, Mr. Ermotti also outlined an extra $300 million in cost savings.
-
A Chinese education company backed by U.S. investors including Kobe Bryant is cracking down on how its Western teachers cover politically fraught topics. VIPKid, one of China’s most valuable online education startups, has put hundreds of its mostly American teachers on notice for using certain maps in their classes with Chinese students, and has severed two teachers’ contracts for discussing Taiwan and Tiananmen Square in ways at odds with Chinese government preferences, people familiar with the company say.
|
|
|
|
A worker assembling a Ford Mustang at a Ford plant in Flat Rock, Mich. Ford plans to overhaul the Flat Rock facility to build electric vehicles. PHOTO: REBECCA COOK/REUTERS
|
|
|
-
Ford Motor Co. is increasing its bet on electric cars, saying it will convert a second North American plant to build plug-in models even as demand for the technology remains weak in the U.S. Ford plans to overhaul its assembly plant near Detroit in Flat Rock, Mich., to start production in 2023, part of a four-year, $11 billion plan to expand its lineup of electric cars globally. The company also plans to build electric cars in Mexico for the U.S. market, starting with a sporty sport-utility vehicle scheduled to go on sale next year.
-
Levi Strauss & Co. is set to go public for the second time as the jeans maker jumps on an IPO wave being ridden most notably by big tech startups such as Lyft Inc. and Uber Technologies Inc. The denim company is selling shares at $17 apiece, it said, for a valuation of roughly $6.6 billion. That is above its proposed range of $14 to $16 a share and shows brisk investor demand for one of the largest retail and consumer-products IPOs of the past decade. The stock will begin trading on the New York Stock Exchange Thursday under the ticker LEVI.
-
Digital First Media took a step forward in its hostile bid for Gannett Co., with a debt specialist indicating Digital First could raise the funds needed to pay for the $1.4 billion takeover. Oaktree Capital Management LP, a credit-investment firm with $120 billion of assets as of December, told Digital First it is “highly confident” in Digital First’s ability to attain a debt financing package of at least $1.725 billion in connection with the offer for the USA Today publisher, according to people familiar with the matter.
-
Pfizer Inc. has agreed to pay as much as €560 million ($636 million) for the rights to gene therapies under development at French company Vivet Therapeutics, as it seeks to build its pipeline in this cutting-edge treatment. The U.S. drugmaker said it had paid €45 million upfront for a 15% stake in Vivet. Further payments, which include the potential acquisition of Vivet, are dependent on the progress of the French company’s experimental therapies.
|
|
|
|
Jonathan Slone, who was named CLSA chief executive in 2008, joined the Asian securities house for the first time in 1988. PHOTO: KIYOSHI OTA/BLOOMBERG NEWS
|
|
|
The veteran chief executive of CLSA Ltd. has quit, people familiar with the matter said, signaling tighter Chinese control of the Asian securities house known for its research and for investor forums featuring keynote speakers such as Steve Bannon, Mike Tyson and Edward Snowden.
Chief Executive Jonathan Slone’s resignation follows last month’s departure of CLSA Chairman Tang Zhenyi, who was succeeded by Zhang Youjun, the chairman of parent company Citic Securities Co. Mr. Slone, who was named CEO in 2008, joined CLSA for the first time in 1988.
|
|
|
|