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The Morning Risk Report: Wells Fargo Ex-CEO Settles SEC Claims, Former Consumer-Unit Head Faces Fraud Case
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Former Wells Fargo CEO John Stumpf earlier paid $17.5 million to settle claims from the Office of the Comptroller of the Currency. PHOTO: GARY CAMERON/REUTERS
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Good morning. Former Wells Fargo chief executive John Stumpf agreed to pay $2.5 million to settle civil claims over his role in the bank’s fake accounts scandal, while regulators sued another departed Wells executive over fraud allegations.
Mr. Stumpf, who stepped down from his top post in 2016, neither admitted nor denied the Securities and Exchange Commission’s claims, which accused him of misleading investors about the success of Wells Fargo’s community banking business. Mr. Stumpf was earlier barred from the banking industry and paid $17.5 million to settle claims from the Office of the Comptroller of the Currency. An attorney for Mr. Stumpf declined to comment.
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Separately, the SEC sued former consumer-bank head Carrie L. Tolstedt, filing a civil fraud case against her in San Francisco federal court. The regulators said Ms. Tolstedt publicly described and endorsed a key measure of Wells Fargo’s business, the “cross-sell metric”—or the number of products the bank sold to its customers—without disclosing that it was inflated by unused and unauthorized accounts and services.
The SEC’s lawsuit seeks a court judgment ordering Ms. Tolstedt to pay fines and barring her from serving as an officer or director of a public company. The OCC, another of the bank’s regulators, separately charged Ms. Tolstedt earlier this year, seeking $25 million and a lifetime ban from the banking industry. Enu Mainigi, an attorney for Ms. Tolstedt, said the former Wells executive acted appropriately and would fight to clear her name.
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Mitigating Ransomware Sanctions Risks
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Join us Wednesday for a discussion on the U.S. Treasury Department’s stance related to companies paying ransoms to those on money laundering and sanctions blacklists. We’ll talk with Ryan Fayhee of law firm Hughes Hubbard and Katherine Keefe of insurer Marsh about how companies can stay on the right side of the law. Sign up here.
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Jovita Carranza, Small Business Administration administrator, attended a White House event in August. News organizations are seeking detailed information from the SBA on Paycheck Protection Program borrowers. PHOTO: ALEXANDER DRAGO/REUTERS
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The Small Business Administration won a temporary stay of a federal judge’s ruling that required the agency to release detailed information on Paycheck Protection Program borrowers, including names and specific loan amounts. The temporary stay means the agency won’t have to release the information on PPP borrowers by Thursday, as originally ordered by U.S. District Judge James Boasberg in Washington.
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Federal officials have granted TikTok and its Chinese parent ByteDance an extension of a deadline for completing a divestiture deal, in another delay of the Trump administration’s efforts to turn the social-media app into an American company. The deadline extension to Nov. 27 was granted by the Committee on Foreign Investment in the U.S., a U.S. panel that monitors cross-border mergers and acquisitions, according to a filing by TikTok in U.S. District Court in Washington, D.C.
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Microsoft says most of the seven recent cyberattack targets it identified are vaccine makers that have Covid-19 vaccines in clinical trials. PHOTO: ANDREY RUDAKOV/BLOOMBERG NEWS
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Cyberattacks originating in Russia and North Korea in recent months have targeted online accounts at seven companies researching Covid-19 drugs and vaccines, according to Microsoft in some cases successfully. Microsoft declined to name the targets or say what information may have been gleaned, but said the seven are leading pharmaceutical companies and vaccine researchers operating in the U.S., Canada, France, India and South Korea.
In addition to the espionage risk, cyberattacks could undermine the integrity of research or even delay clinical trials, said Dapo Akande, a professor of international law at the University of Oxford, who has called for protections in international law against cyberattacks on health-care institutions.
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Schools around the U.S. are fighting a wave of increasingly aggressive ransomware attacks by hackers. The U.S. Treasury Department warned last month that ransomware attacks in general have increased during the coronavirus pandemic—and districts make an especially tempting target due to their often thinly staffed technology departments and networks full of personal data. It’s a significant new source of stress in what’s already been a difficult year, with the pandemic forcing closures, a chaotic implementation of remote learning and complicated schedules.
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An HSBC branch in Hong Kong in September. The London-based bank earns more money in Asia than it does in the rest of the world and has scaled back operations in Europe and the U.S. PHOTO: CHAN LONG HEI/BLOOMBERG NEWS
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Global banking giant HSBC Holdings has made clear that its business destiny is in China. Its board, however, remains an Anglo-American affair. The London-based, Asia-focused bank appointed three board members along with a chief legal officer and a chief operating officer in the past 12 months. All are American. Just two out of 14 board members are Chinese.
HSBC exemplifies the difficulties multinational companies face navigating tensions between the U.S. and China. The bank has received competing demands for pledges of loyalty from Washington and Beijing after China imposed a national-security law on Hong Kong. The U.S., the U.K. and other Western governments opposed extending the law to Hong Kong. The high-level appointments come even as the bank is scaling back its already modest U.S. operations and shutting branches there.
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The chief executive of mortgage-finance company Freddie Mac plans to step down in January, a move that comes as prospects dim for an exit from government control for the firm and its larger sister, Fannie Mae.
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Pedestrians walk over a reminder to wear face masks sprayed on the sidewalk at Karl-Marx-Strasse in Berlin. PHOTO: MARKUS SCHREIBER/ASSOCIATED PRESS
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Western nations face a big challenge in fighting the Covid-19 pandemic: Ten months into the health crisis, they still know little about where people are catching the virus. The problem is becoming more acute as new cases are breaking records in the U.S. and Europe and pressure grows on authorities to impose targeted restrictions on places that are spreading the virus, rather than broad confinement measures that are wreaking havoc on the economy.
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General Motors is recalling its Chevrolet Bolt electric vehicles to limit the battery’s charging capacity, becoming the latest auto maker to fix its plug-in models because of fires related to the lithium-ion batteries.
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Tyson in July began a program that tests a number of employees for Covid-19 at each plant weekly. PHOTO: CHARLIE NEIBERGALL/ASSOCIATED PRESS
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Tyson Foods is using infection-tracking algorithms and ongoing employee testing to shield workers at the biggest U.S. meatpacker from a fresh surge in coronavirus cases and keep grocery stores stocked, its chief executive said.
The Arkansas-based company, like other meatpackers, is spending heavily on protective gear and planning longer-term defenses against Covid-19. Tyson Chief Executive Dean Banks said the company is adding more space for workers at existing plants and designing new ones to include workstation dividers and other safeguards.
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Simon originally intended to pay $52.50 a share to acquire Taubman. PHOTO: DARRON CUMMINGS/ASSOCIATED PRESS
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High-end mall developer Taubman Centers Inc. has agreed to accept a price cut in its takeover by Simon Property Group, in a move that will allow the companies to avoid a drawn-out legal battle that was set to start Monday.
The companies have agreed that Simon will pay $43 a share for Taubman under the new deal, they said Sunday. That is down from the original price of $52.50.
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