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The Morning Risk Report: Credit Suisse Expected to Publish Details of Archegos Failures
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Credit Suisse amassed more than $20 billion of exposure to investments related to Archegos, equivalent to half the bank’s equity cushion against potential losses.
PHOTO: CARLO ALLEGRI/REUTERS
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Good morning. Credit Suisse Group AG is likely to publish an investigation as soon as Thursday into the breakdown that led to massive losses from family office Archegos Capital Management, people familiar with the matter said.
The detailed report could become public around the time Credit Suisse reports second-quarter earnings, the people said. The report focuses on problems in the bank’s risk management unit, human errors in judgment and unheeded risk in concentrated positions, some of the people said.
[Continued below...]
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It is expected to detail the bank’s failures, similar to lengthy reviews around other major bank losses, such as JPMorgan Chase & Co.’s $6 billion trading loss, known as the “London Whale,” and Wells Fargo & Co.’s sales practices scandal. The collapse of Archegos, piled on top of the insolvency of another key Credit Suisse client, Greensill Capital, plunged the storied Swiss lender into crisis earlier this year. Credit Suisse took the biggest hit on Wall Street from Archegos—more than $5.5 billion.
Also, Credit Suisse hired a top executive from Goldman Sachs Group Inc. as its chief risk officer, part of an effort to get a better grip on risks.
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From Risk & Compliance Journal
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Glencore Probe Yields Charges Against Another Former Trader
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A former Glencore PLC trader pleaded guilty Monday to what prosecutors described as a conspiracy to pay millions of dollars in bribes to officials in Nigeria and elsewhere in exchange for favorable contracts with a state-owned oil company.
Anthony Stimler, a U.K. citizen who worked for a Glencore subsidiary on the commodity trading company’s West Africa desk, pleaded guilty to conspiring to violate the U.S. Foreign Corrupt Practices Act and conspiring to commit money laundering, court filings show.
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Only one physical copy exists of the Wu-Tang Clan album, titled ‘Once Upon a Time in Shaolin.’ PHOTO: UNITED STATES MARSHALS SERVICE
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The U.S. government on Tuesday said it had sold a unique Wu-Tang Clan album previously owned by former pharmaceutical executive Martin Shkreli, who was convicted of securities fraud in 2017.
The sale of the album, titled “Once Upon a Time in Shaolin,” will cover the balance of the $7.4 million in forfeiture that a judge ordered Mr. Shkreli to pay at a 2018 sentencing where he was also given a seven-year prison term, federal prosecutors said. The sale contract includes a confidentiality provision that protects information about the price and buyer, according to federal prosecutors in Brooklyn, N.Y., where Mr. Shkreli was tried.
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Cardinal Giovanni Becciu, once one of the most powerful men in the Vatican, went on trial Tuesday for embezzlement and other alleged crimes, as a scandal that has posed one of the biggest tests of Pope Francis’s pontificate spilled out into the open. It is the first time that a cardinal has gone on trial in Vatican City’s criminal court.
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President Biden is advancing a series of regulatory changes aimed at increasing workers’ pay and gaining them other benefits, moves that opponents say could burden businesses amid an uneven economic recovery.
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A former intelligence analyst was sentenced Tuesday to nearly four years in prison after pleading guilty to giving classified information about the U.S. drone program to a reporter.
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Facebook Inc.’s Instagram will steer teenagers toward private accounts and limit how ads are shown to them, amid rising concerns from federal lawmakers and state attorneys general about social media’s effects on children’s mental health.
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Saudi Arabia is set to impose one of the world’s most sweeping vaccine mandates in an attempt to combat hesitancy toward the Covid-19 shots in the kingdom, as governments globally try to confront a new surge in cases of the Delta variant.
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Videogame publisher Activision Blizzard is fighting a gender-bias lawsuit filed by California regulators.
PHOTO: TROY HARVEY/BLOOMBERG NEWS
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Activision Blizzard Inc. late Tuesday said it had hired a law firm to investigate complaints of sexual harassment in the workplace, hours before a planned employee walkout over the company’s reaction to allegations made in a recent lawsuit.
“Our initial responses to the issues we face together, and to your concerns, were, quite frankly, tone deaf,” Chief Executive Officer Bobby Kotick said in a statement. “It is imperative that we acknowledge all perspectives and experiences and respect the feelings of those who have been mistreated in any way. I am sorry that we did not provide the right empathy and understanding.”
The suit, which was filed by California’s Department of Fair Employment and Housing last week, accuses the largest U.S. videogame publisher by market value of paying female employees less than their male counterparts and providing them with fewer opportunities to advance. It also alleges that Activision ignored complaints by female employees of blatant harassment, discrimination and retaliation.
Activision is fighting the charges. It previously said the lawsuit includes distorted, and in many cases false, descriptions of its past. The company said it strives to pay all employees fairly.
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President-elect Ebrahim Raisi is set to be inaugurated next week.
PHOTO: EBRAHIM NOROOZI/ASSOCIATED PRESS
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Weekslong Iranian protests over water scarcity present an early test for incoming president Ebrahim Raisi, who takes office next week amid mounting challenges including a grinding economic crisis and stalled nuclear negotiations with the West.
The protests, which began nearly two weeks ago in the oil-rich southwestern province of Khuzestan, center on accusations that the Iranian government is diverting water to drill for oil, service other provinces and drive the area’s ethnic Arabs off the land. Protesters have shouted “We are thirsty,” while some chanted against Supreme Leader Ayatollah Ali Khamenei and the Islamic Republic.
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Satellite imagery appeared to show China building a new network of silos for launching nuclear missiles, a U.S. think tank said, the second such project that American analysts have accused Beijing of advancing in recent weeks.
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Houston restaurant employees waited to be vaccinated in the spring.
PHOTO: JEFF LAUTENBERGER FOR THE WALL STREET JOURNAL
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Companies are encouraging their workers to get vaccinated as Covid-19 cases climb again. Yet relatively few workplaces are making shots required. On Monday, the U.S. Department of Veterans Affairs became the first federal agency to require employee vaccinations, and California became the first state to do so for its public workers. In New York City, Mayor Bill de Blasio said that all municipal employees will be required to be vaccinated by Sept. 13, or get tested weekly, and urged the city’s private employers to push similar measures.
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Airlines are grappling with shortages of jet fuel at some smaller airports in the western U.S., where a travel boom is coinciding with high demand for that fuel to fight wildfires.
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Some of the biggest names in tech aren’t just allowing existing workers to relocate out of the San Francisco Bay Area, they are also starting to hire in places they hadn’t often recruited from before. The result is the most geographically distributed tech labor market to date. That’s leading to above-market rates for workers in smaller hubs, forcing local companies to raise wages to keep up with the cost of living and fend off deeper-pocketed rivals from California, Seattle and New York.
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