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The Morning Risk Report: Alleged Fraud Surprises Investors in Shipping Firm |
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A dock for oil supertankers at the oil terminal in Fujairah, the United Arab Emirates. PHOTO: KARIM SAHIB/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Good day. Months after an activist-investor group forced its way onto the board of a Greek shipping-fuel company, the firm is bankrupt and the new board is alleging that the company had been systematically plundered. The assets that had drawn the activists' attention were largely fake, they said.
An internal investigation run by the audit committee of the board of Aegean Marine Petroleum Network found that more than $300 million was stolen by founder Dimitris Melissanidis, people familiar with the matter told The Wall Street Journal. Neither Mr. Melissanidis nor a lawyer responded to calls and texts seeking comment.
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A set of shell companies, fake receipts and documents covered up the alleged theft, the investigation found. Some of the money went to Mr. Melissanidis, who is a billionare, and to his family businesses, which include a professional soccer team and yacht rentals, the probe found.
The company is cooperating with U.S. Justice Department subpoenas, it said. Aegean filed for bankruptcy Tuesday morning in New York. Its downfall offers an example of the kinds of risks activists take on when trying to transform what, from the outside, appears to be a struggling business.
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| From Risk & Compliance Journal |
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U.K. Drops Prosecution of Mining Executive |
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U.K. authorities dropped the prosecution of Benedikt Sobotka, CEO of Eurasian Resources Group, the parent company of ENRC Ltd. The U.K. has been investigating ENRC since 2013.
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ECB Withdraws Banking Licenses from Troubled Maltese
Lender |
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The European Central Bank formally withdrew the license of Malta’s Pilatus Bank, following recommendations by Maltese regulators in the wake of an indictment of the bank’s chairman.
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Qualcomm Suffers Setback in Antitrust Battle |
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A federal judge dealt a setback Tuesday to Qualcomm Inc.’s defense against an antitrust lawsuit brought by the Federal Trade Commission, ruling that the chip maker must license some of its industry-essential patents to rival chip suppliers.
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No Significant Foreign Interference Seen on Midterm
Vote |
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U.S. security officials and social media firms said Tuesday they spotted a limited amount of deliberate disinformation targeting the midterm election, but that they hadn’t observed any significant efforts to directly breach election infrastructure with cyberattacks.
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Banks Push for Regulators to Ease Up on Them |
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Two banking industry groups believe the pace of deregulation under the Trump administration isn’t moving fast enough. They filed a petition demanding a new rule limiting the use of informal guidance by bank examiners.
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After Iran Sanctions, U.S. Faces a Huge Task:
Compliance |
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Most Western companies and banks pulled out of Iran ahead of new U.S. sanctions, but those based elsewhere across the globe may be more difficult for officials to convince. So they’re pledging to punish those that don’t comply.
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SEC Asset Management Co-Chief to Leave Agency |
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A Securities and Exchange Commission official who has helped head fee and expense issues related to private funds is leaving the agency’s enforcement division after more than 18 years. Anthony S. Kelly, co-chief of the division’s asset-management unit, is stepping down from his role this month, the SEC said.
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Huawei, Still Big in Britain, Faces New Scrutiny |
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The U.K. government is reviewing the makeup of its telecommunications-equipment market—a move that executives say ratchets up scrutiny of China’s Huawei Technologies Co.
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BMW Hit by New Emissions Rules, U.S.-China Trade Dispute |
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BMW AG’s earnings from its core automotive business plunged 40% in the three months to Sept. 30 due to fierce price competition, new emissions rules in Europe, the high costs of product recalls and the U.S.-China trade dispute, the company said Wednesday.
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Foxconn Considers Bringing Chinese Workers to
Wisconsin |
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Foxconn Technology Group may bring in personnel from China to help staff a facility being built in Wisconsin, The Wall Street Journal reports. The firm has struggled to lure workers in a tight U.S. labor market.
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Papa John’s Sales Fall for Fourth Consecutive Quarter |
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Papa John’s International Inc. reported a fourth consecutive quarter of declining sales. The pizza chain has struggled since late last year, when founder John Schnatter made comments that many customers construed as racist.
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Boeing Issues Safety Alert Following Lion Air Crash |
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Boeing Co. has responded to the Lion Air jetliner crash that killed 189 people in Indonesia last week, issuing a safety warning about potentially suspect flight-control software that can confuse pilots and lead to a steep descent of the affected aircraft model.
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Cloudy Skies in China for Small U.S. Aircraft Makers |
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Wells Fargo’s Private Bank Head to Retire |
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Wells Fargo & Co. private bank head Jay Welker will retire at the end of March, according to in internal memo. Mr. Welker was a focal point of a gender-bias investigation in the bank’s wealth and investment management unit.
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Dell Technologies Inc. has been contacting large shareholders of an affiliate—Dell Technologies Inc. Class V, known as DVMT—about sweetening a roughly $22 billion bid to buy them out before the unpopular deal goes to a vote next month.
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One Aviation Corp. averted an open-court showdown with creditors Tuesday, agreeing to file required reports that will detail how the taxpayer-backed company spent its funds in the year before filing for bankruptcy.
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CVS Lays Out Vision for Future as Aetna Merger Looms |
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Executives of CVS Health Corp. gave investors a window into their strategy after closing the acquisition of insurer Aetna Inc., seeking to become a one-stop shop for patients.
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Toyota Reshapes U.S. Lineup in Response to SUV Boom |
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Toyota Motor Corp. may drop some of its more fuel-efficient models in the U.S., according to the head of its North American operations. These vehicles are underperforming amid a boom in sports-utility vehicle sales, he said.
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Insys Looks to Sell Opioid-Related Assets, Including
Subsys |
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Insys Therapeutics Inc. is looking to sell its opioid-related assets, including Subsys, the fentanyl painkiller that fueled its success and later landed it in legal trouble for aggressive sales practices.
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U.S. Olympic Committee Moves to Revoke USA Gymnastics’ Status |
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The U.S. Olympic Committee began proceedings to revoke USA Gymnastics as a national governing body in the wake of a sexual-abuse scandal. Top Olympic officials think the federation faces an insurmountable crisis.
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Chief Executive Departs Troubled GAM |
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The chief executive of Swiss money manager GAM Holding AG chief executive left the firm after the share price plummeted and investors yanked billions following the suspension of a bond manager amid a probe into his conduct.
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Key Executive to Leave Microsoft |
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Microsoft Corp. is losing one of the key advocates for the company's move away from a Windows-first approach, a strategy that led the company’s industry standing and financial fortunes to soar. Javier Soltero will exit the giant, according to an email to employees.
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Subscribe to The Morning Risk Report here.
Follow the WSJ Risk & Compliance team on Twitter: @WSJRisk.
Send comments to the Risk & Compliance editor, Jack Hagel, at jack.hagel@wsj.com.
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