|
The Morning Risk Report: House to Vote on Booting Chinese Stocks From U.S. Over Audit Rules
|
|
|
|
|
|
|
Alibaba Group Holding’s headquarters in Hangzhou, China, earlier this month. PHOTO: QILAI SHEN/BLOOMBERG NEWS
|
|
|
Good morning. Lawmakers this week are likely to force Chinese companies with shares traded on American exchanges to finally comply with audit-oversight rules—or leave U.S. markets altogether.
House leaders plan to consider a measure Wednesday that would force Chinese firms such as Alibaba Group Holding either to make the transition to getting an annual audit that is reviewed by U.S. regulators, or remove the shares from trading in the U.S. The House plans to vote under rules that limit debate and require a two-thirds majority for passage, according to an online notice posted Friday.
[Continued below…]
|
|
|
The legislation, if it becomes law, would give Chinese companies and their auditors three years to comply with inspection requirements before they could be kicked off the New York Stock Exchange or Nasdaq Stock Market. Chinese officials have criticized the bill, saying that there are better ways to resolve differences between Washington and Beijing over audit inspections, and that delisting Chinese companies would harm U.S. capital markets.
The legislation has bipartisan support. It unanimously passed the Senate in May, meaning it would be eligible for President Trump’s signature if the House approves it. The measure is more punitive than a proposal under consideration at the Securities and Exchange Commission, which would require audit inspection as a condition of continued listing on a stock exchange, but would allow noncompliant companies to trade over the counter.
|
|
|
|
From Risk & Compliance Journal
|
|
|
|
Richard Chambers, chief executive of the Institute of Internal Auditors, spoke with Risk & Compliance Journal about that evolution, about how the coronavirus pandemic is creating new challenges and responsibilities for internal auditors, and what he sees as the biggest risks facing firms in 2021.
|
|
|
-
The U.S. imposed sanctions on a militia and its leader, alleging the group was responsible for torturing and murdering civilians in Libya. The sanctions, levied under the Global Magnitsky Human Rights Accountability Act, come as the U.S. increasingly uses sanctions as a tool to target corruption and alleged human rights abusers—a trend policy observers expect to continue under President-elect Joe Biden. Meanwhile, other countries or regions have been drafting or planning their own programs mirroring the U.S. Magnitsky program.
|
|
|
|
Iranian Supreme leader Ayatollah Ali Khamenei, right, and Iranian President Hassan Rouhani during a meeting with Iranian government Tuesday. PHOTO: SUPREME LEADER OFFICE HANDOUT/SHUTTERSTOCK
|
|
|
The killing of one of Iran’s most important nuclear scientists has dealt a setback to the country’s nuclear program, which had staged a partial rebound after the 2015 nuclear deal brokered under President Obama unraveled. But the U.S. and its allies still face major hurdles in trying to constrain Tehran’s nuclear ambitions, current and former officials said.
The challenge is likely to be particularly acute for President-elect Joe Biden, who is planning to engage Iran diplomatically in the hope of negotiating restoring and building on the 2015 deal. Mr. Biden will inherit considerable economic leverage in his dealings with Tehran: The sweeping sanctions the Trump administration has imposed on Iran after withdrawing from the agreement in 2018 have depleted Iran’s currency reserves and battered its economy.
European powers are looking to the incoming administration to swiftly reduce nuclear tensions with Tehran but won’t press Washington to re-enter the 2015 nuclear accord with Iran quickly, according to senior diplomats.
|
|
|
Australia is preparing to take action against China at the World Trade Organization over tariffs on barley imports, the latest salvo in a trade dispute that has disrupted the supply of commodities from coal to wine.
|
|
|
China imposed antidumping tariffs on Australian wine, escalating a monthslong trade dispute and forcing local vintners to seek other markets for millions of bottles during a pandemic.
|
|
|
-
Lawyers hired by Credit Suisse Group’s board in the aftermath of a spying scandal last year have found two earlier instances of employees being followed by private investigators, despite the bank’s assertions that it doesn’t condone physical surveillance.
-
Peruvian prosecutors allege that lawmakers use the country’s Congress to enrich themselves by pressing for the government budget to include projects in their home states in exchange for kickbacks, or by passing laws to benefit politically connected companies. They also claim that politicians see Congress as a shield from investigation as they have immunity while in the legislature. Many investigations stem from alleged crimes committed before lawmakers were elected to Congress; they can serve as legislators even though their cases remain open.
-
The National Rifle Association disclosed that current and former top executives received at least $1.4 million in improper or excessive benefits from the organization in violation of nonprofit rules, the first time the group has publicly admitted the lapses.
-
Trying to outflank each other, the U.S. is readying sanctions to quash the Nord Stream 2 pipeline while Russia prepares a ship to finish it.
-
Deutsche Bank executives want to expand in Russia despite a legacy of missteps and massive fines. Outside monitors who watch over the bank’s money-laundering controls said it should shut the business instead, according to a person familiar with the communications.
-
An investigation into a troubled Chinese state-owned coal miner was escalated to the country’s securities regulator, as authorities pile pressure on the company whose recent default rattled the bond market.
|
|
|
|
EY officials were set to appear before a parliamentary hearing Thursday. PHOTO: FRANK HOERMANN/SVEN SIMON/DPA/ZUMA PRESS
|
|
|
German prosecutors are examining Ernst & Young’s role in the collapse of disgraced payments operator Wirecard, ratcheting up pressure on the audit firm.
Munich prosecutors said they are evaluating a report by the country’s accounting watchdog into the company’s collapse this summer. The watchdog, known as Apas, launched an investigation into the work of the auditing firm’s local affiliate, EY GmbH, after Wirecard admitted that more than $2 billion of cash it had said was held in bank accounts on its behalf didn’t exist.
|
|
|
|
SignalFrame’s data-collection technology works only for phones running the Android operating system. PHOTO: ROSS D. FRANKLIN/ASSOCIATED PRESS
|
|
|
U.S. government agencies from the military to law enforcement have been buying up mobile-phone data from the private sector to use in gathering intelligence, monitoring adversaries and apprehending criminals. Now, the U.S. Air Force is experimenting with the next step.
The Air Force Research Laboratory is testing a commercial software platform that taps mobile phones as a window onto usage of hundreds of millions of computers, routers, fitness trackers, modern automobiles and other networked devices, known collectively as the “Internet of Things.”
|
|
|
-
A new survey found widespread concern among Americans about government tracking of their whereabouts through their digital devices, with an overwhelming majority saying that a warrant should be required to obtain such data.
-
Federal officials granted TikTok and its Chinese parent ByteDance a weeklong extension of a deadline for completing a divestiture deal, in another delay of the Trump administration’s effort to turn the social-media app into an American company.
|
|
|
|
A Potbelly sandwich shop in Chicago last summer. The company’s chief financial officer, Steven Cirulis, said its customers have largely become used to curbside pickup and drive-through following closures earlier this year. PHOTO: CHRISTOPHER DILTS/BLOOMBERG NEWS
|
|
|
-
Finance chiefs say they are wary of new lockdown measures aimed at curbing the spread of the coronavirus, but have contingency plans ready—in contrast to the spring, when restrictions caught many companies off guard.
-
Some restaurants are rejecting a new round of shutdown orders, saying that serving customers indoors is their only way to stay in business and that they can do so safely.
|
|
|
|
Facebook CEO Mark Zuckerberg testified remotely during a Senate hearing on Oct. 28. PHOTO: MICHAEL REYNOLDS/PRESS POOL
|
|
|
The law that enabled the rise of social media and other internet businesses is facing threats unlike anything in its 24-year history, with potentially significant consequences for websites that host user content.
Section 230 of the Communications Decency Act was instrumental to the success of Silicon Valley tech giants such as Facebook, Twitter and Alphabet Inc.’s Google and YouTube by giving them broad immunity for the content they publish from users on their sites. There is a growing consensus in Washington and elsewhere that Section 230 needs an overhaul, even as liberals and conservatives disagree on the reasons why.
|
|
|
|
Lauren Hobart, speaking in Washington, D.C., last year, was named the new chief executive of Dick’s Sporting Goods on Tuesday. PHOTO: SARAH SILBIGER/BLOOMBERG NEWS
|
|
|
-
The appointment of Lauren Hobart as the new chief executive of Dick’s Sporting Goods brings the number of women running the biggest U.S. corporations to a new—albeit still relatively small—high. The rising numbers partly reflect companies’ efforts in recent years to more systematically build a bench of senior female talent, particularly in the retail industry, executives and recruiters say.
-
Vista Equity Partners co-founder Brian Sheth departed the firm, confirming rumors about an impending split at the top of one of the most successful technology investment firms in private equity.
|
|
|
|
AstraZeneca has said its vaccine showed to be as much as 90% effective, but only among a subset of subjects who received a lower first dose of the two-shot regimen. PHOTO: JOHN CAIRNS/UNIVERSITY OF OXFORD/ASSOCIATED PRESS
|
|
|
The U.K. asked its medicines regulator to review AstraZeneca’s Covid-19 vaccine for emergency-use approval, while Europe’s equivalent of the FDA said it could be more flexible in how it reviews a handful of promising candidates.
The two moves accelerate a regulatory race on both sides of the Atlantic, triggered by the recent publication of positive clinical data for three different vaccine candidates. Two shots—one from Pfizer and Germany’s BioNTech, and another from Moderna—showed to be more than 90% effective at preventing symptomatic Covid-19 in large-scale human trials.
|
|
|
|
|
|