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The Morning Risk Report: Regulator to Rehear Disciplinary Case Due to Potential Conflict
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The Financial Industry Regulatory Authority says it is rehearing a case ‘out of an abundance of caution’ to ensure all participants have confidence in the impartiality of its hearing process. PHOTO: BRENDAN MCDERMID/REUTERS
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Good morning. A Wall Street regulator, in a highly unusual step, is rehearing a case barring a former brokerage executive from the business because of an undisclosed conflict involving the case’s hearing officer.
At issue is a decision in March by the Financial Industry Regulatory Authority to bar Devin Wicker, the former executive. The ruling came after a disciplinary hearing before a three-member Finra hearing panel, the organization’s usual practice when deciding allegations of securities violations.
[Continued below…]
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What Mr. Wicker didn’t know at the time was that the hearing officer presiding over his case was in talks to take a job in Finra’s enforcement division—the same unit that initially brought the case against the former executive—according to a person briefed on the matter.
The possibility that a Finra hearing officer could have favored the regulator’s enforcement unit in a case against an individual raises questions about fairness in Finra’s disciplinary process, some securities lawyers said. The circumstances surrounding the case haven’t been previously reported.
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Regulatory Compliance in a Disrupted World
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Join The Wall Street Journal on Dec. 10 in London for a discussion about regulatory risk and geopolitics with Anna Bradshaw, a partner on the business crime team at Peters & Peters Solicitors; Neil Donovan, a senior associate at Freshfields Bruckhaus Deringer; and Sophie Harding, global geopolitics lead at KPMG International. To register, click here.
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From Risk & Compliance Journal
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The sanctions on Mohammad Javad Azari Jahromi are the latest move in a U.S. pressure campaign. PHOTO: VAHID SALEMI/ASSOCIATED PRESS
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The U.S. blacklisted Iran’s minister of information and communications technology for an alleged role in internet censorship in the wake of antiregime protests in the country, the U.S. Treasury Department said.
The decision to place sanctions on Mohammad Javad Azari Jahromi is the latest move by the U.S. in a continuing pressure campaign against Iran. The U.S. last month declared Iran a “jurisdiction of primary money laundering concern,” seeking to further isolate the country from the global financial system.
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The former president of a Maryland transportation company was found guilty of participating in a scheme to bribe a unit of a Russian nuclear energy company, the Justice Department said Friday. Mark Lambert, 56 years old, was convicted by a Maryland jury of various counts of violating the Foreign Corrupt Practices Act, as well as wire fraud and conspiracy charges, according to the department.
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Bayer’s Monsanto has agreed to pay $10.2 million in fines and plead guilty to spraying a banned pesticide in Hawaii, the U.S. Department of Justice said. The Justice Department said that Monsanto sprayed the banned pesticide, Penncap-M, on research crops in Maui, Hawaii, despite the 2013 ban by the Environmental Protection Agency.
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Huawei has said U.S. fears it could potentially facilitate spying on Americans are unfounded. PHOTO: WU HONG/SHUTTERSTOCK
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U.S. regulators labeled two large Chinese telecommunications firms a “national security threat” and voted to ban them from a federal subsidy program, the latest move in a broader push to close them off from U.S. customers.
The Federal Communications Commission’s action is another blow to Huawei Technologies and ZTE Corp., targeting one of the firms’ success stories in the U.S. market: Sales of telecommunications equipment to small wireless and broadband providers. Many of those companies rely on federal subsidies, and the FCC is banning federal funds from being spent on buying—or even maintaining—Huawei and ZTE products.
The FCC also Friday began a regulatory process that would eventually force U.S. firms to replace Huawei and ZTE equipment they have already bought and installed. That could cost as much as $1.89 billion within two years, the FCC estimated.
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Two associates of Rudy Giuliani tried to recruit a top Ukrainian energy official in March in a proposed takeover of the state oil-and-gas company, describing the company’s chief executive and the then-U.S. Ambassador Marie Yovanovitch as part of “this Soros cartel” working against President Trump.
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President Trump suggested he is softening his stance on a proposal to pull sweet and fruity e-cigarettes off the market, saying that prohibition can have dangerous consequences. The administration had been expected to release details on the ban earlier this month, but that announcement was delayed amid pushback from conservative interest groups and vaping industry advocates and e-cigarette users.
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A former CIA officer was sentenced to 19 years in prison Friday for conspiring to provide classified information to China, the latest U.S. intelligence officer to be sentenced for efforts to give secrets to China. Jerry Chun Shing Lee, who worked as a case officer at the Central Intelligence Agency for more than a decade, admitted in court earlier this year that between 2010 and 2018 he communicated with agents from China’s spy service and prepared documents in response to requests from them.
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London’s main transport regulator, Transport for London, said Monday it wouldn’t renew Uber’s license to operate because of a “pattern of failures” that placed the safety and security of users at risk. It said Uber could continue to operate in the city pending an appeal.
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Also...
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U.S. Bill Splits Hong Kong Activists and Business Groups
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Trump Calls Hong Kong Protests ‘Complicating Factor’ in Trade Talks
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Toys ‘R’ Us was liquidated after failing to repay loans from its leveraged buyout by private-equity firms. PHOTO: ANDREW HARRER/BLOOMBERG NEWS
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The default risk of companies owned by private-equity firms is 2.5 times that of their public counterparts, according to data collected from banks, insurers and asset managers by analytics firm Credit Benchmark. Private-equity firms use leveraged loans, rated below investment grade, for the financing of buyouts of target companies.
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A large share of the dangerous-goods shipments on international cargo ships were mislabeled, improperly handled and carried other safety risks, according to an industry study undertaken after a spate of fires on big, oceangoing vessels.
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President Trump called antigovernment protests in Hong Kong a “complicating factor” in his bid for an elusive trade deal with China and didn’t say whether he would sign a bill passed by Congress supporting the protesters.
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Investors are demanding more compensation to hold the lowest-rated tier of U.S. corporate bonds than at any time in more than three years, highlighting a selloff that some have taken as a warning signal for other riskier assets.
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—Some of the biggest names in finance are warning that the government’s plan to return Fannie Mae and Freddie Mac to private ownership risks disrupting a market critical to the U.S. housing system.
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Brian Cornell has steered a comeback at Target. PHOTO: ANGELA OWENS/THE WALL STREET JOURNAL
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Target CEO Brian Cornell knows how brutal it can be to run a bricks-and-mortar chain in the online age.
Since taking the helm in 2014, the 60-year-old Mr. Cornell has led the retailer through the aftermath of a massive data breach, an exit from Canada, and a customer backlash to a policy allowing transgender shoppers to use whichever restroom corresponds with their gender identity.
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Airbnb Chief Operating Officer Belinda Johnson has decided to step down as the company prepares to go public. Ms. Johnson will join the Airbnb board of directors after she exits the operating-chief role, Airbnb said. She joined the company in 2011 as the first executive to be hired by the company’s co-founder and Chief Executive Brian Chesky.
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Black female founders have received far less than 1% of the total technology venture funding raised over the last decade. But the fundraising process is made even more challenging when investors are unwilling to communicate rejection clearly.
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British Airways’ pilots union has recommended its members settle a long-running dispute over pay. PHOTO: MATT DUNHAM/ASSOCIATED PRESS
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British Airways’ pilots union has recommended its members settle a long-running dispute over pay, potentially averting further industrial action that has cost the airline millions of dollars and led to the cancellation of hundreds of flights.
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Latina women earn 46% less than white men and 31% less than white women, the worst gender wage gap for any group of minority women, according to 2019 data. That gap is greater than for black women, who earn 39% less than white men, according to an analysis of U.S. Census Bureau data, and greater than for Native American women, who earn 42% less than white men.
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Mr. Musk launched the triangular, steel-body truck late Thursday. PHOTO: TESLA/REUTERS
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Elon Musk embraced unorthodox designs for Tesla’s all-electric pickup to wow truck buyers and help differentiate it from popular gasoline-powered models that he knocked as boring look-alikes.
But the features he is promising could dent the commercial prospects of the vehicle Mr. Musk has dubbed Cybertruck.
Mr. Musk unveiled the triangular, stainless-steel truck that evoked a science-fiction future. But when it came to demonstrating the Cybertruck’s toughness, things went ominously off script. Mr. Musk asked his head of design to throw a small metal ball at the vehicle’s side window. The resulting crack of the window surprised the audience, including Mr. Musk.
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European luxury conglomerate LVMH is taking over Tiffany & Co. in a more than $16 billion gamble that it can restore shine to the famed jeweler.
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