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The Morning Risk Report: Overseas Traders Charged With Hacking SEC’s Public Filings Site |
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The Securities and Exchange Commission building in Washington. PHOTO: ZACH GIBSON/BLOOMBERG NEWS
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Good day. U.S. authorities said a Ukrainian man named Oleksandr Ieremenko and an associate posed as a company as part of an effort to break into the government computer system containing the filings of publicly traded companies. They profited from their efforts by trading on the information before it was made available to the public, authorities said.
They worked with traders in Ukraine, Russia and Los Angeles, authorities said. When the group traded legitimately, they lost money; after hacking the database, they made $4.1 million, the government alleged. Mr. Ieremenko and another Ukrainian man, Artem Radchenko, were charged in a 16-count indictment. The Securities and Exchange Commission filed a separate civil complaint that named several others. None could be reached for comment.
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The SEC disclosed the hack in September 2017. Some SEC officials were aware of the breach in 2016 but had initially failed to connect it to potential illicit trading. The hackers had gone undetected in the system for months. After the incident, the SEC stopped taking in some types of vulnerable data.
SEC Chairman Jay Clayton said the case shows how the agency is vulnerable to the same cyber threats that bedevil banks, companies and exchanges. "We recognize that we must continuously use the resources available to us efficiently and effectively to bolster our cybersecurity defenses and reduce our cyber risk profile," he said.
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| From Risk & Compliance Journal |
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Former U.S. Attorney General William Barr testifies before the Senate Judiciary Committee during his confirmation hearing on Capitol Hill. PHOTO: SHAWN THEW/SHUTTERSTOCK
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Attorney general nominee William Barr reversed his position on the False Claims Act, a law used to fight fraud against the government that serves as a key tool for whistleblowers, Risk & Compliance Journal’s Samuel Rubenfeld reports.
The law, which dates back to the Civil War, also allows citizens to file private claims on behalf of the government and share in any penalty collected. The Justice Department said late last year it had collected more than $2.8 billion in cases from False Claims Act actions during fiscal year 2018.
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Customers leave the Apple store in Berlin last month. PHOTO: ALEXANDER BECHER/SHUTTERSTOCK
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A German court dismissed a patent lawsuit from Qualcomm Inc. against Apple Inc., the first setback in the country for the chip maker in a dispute that resulted last month in the ban of some iPhone sales in China and Germany. The decision is the first win for Apple in a series of global patent disputes launched against it by Qualcomm.
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The U.S. is casting a global dragnet in a Mozambique corruption probe. Recent arrests on three continents—planned weeks ahead to occur in countries that have extradition treaties with the U.S.—are part of a widening effort by U.S. authorities to police what bond investors say is a growing intersection of high finance and corruption in emerging markets.
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Bayer AG’s fight to prove its recently-acquired weedkillers are safe faced a setback in Europe Tuesday. A French court revoked approval for one of its glyphosate-based products because it might cause cancer. The ruling effectively bans Bayer from selling the weedkiller in France. The company said it was considering its legal options.
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Employees of German car manufacturer Porsche work on a sports car at the auto maker’s factory in Stuttgart-Zuffenhausen, Germany. PHOTO: RALPH ORLOWSKI/REUTERS
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The economic outlook for Europe and the world darkened after growth in Germany slowed sharply last year, hit by weaker exports to China and elsewhere, and softer demand at home. European Central Bank President Mario Draghi warned Tuesday that the eurozone economy has weakened unexpectedly.
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The threat of a full-blown global trade war and rising political tensions between world powers are the dominant global risks, according to a report by the World Economic Forum ahead of its annual gathering in Davos, Switzerland, next week.
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A Canadian citizen sentenced to death in China for drug smuggling plans to appeal the verdict, which Chinese state media and officials are touting as a just display of judicial power. Monday’s verdict against Robert Schellenberg has sparked concern in Canada, where officials believe China is using the case to pressure Ottawa about the arrest of a well-connected Chinese telecommunications executive.
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PG&E Corp.’s plan to file for bankruptcy protection has enormous repercussions for everyone from the homeowners suing the utility for California wildfire damages to the companies that furnish it with green energy.
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WhatsApp and Reliance Jio Infocomm wireless team up to try to draw customers in Pune, India. WhatsApp has more than 200 million users in India. PHOTO: DHIRAJ SINGH/BLOOMBERG NEWS
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Facebook Inc.’s WhatsApp is facing pressure in India to let authorities trace and read the encrypted messages of its more than 200 million Indian users in a new attempt at constraining global tech giants.
India’s telecommunications regulator has asked for feedback on new rules that—in the name of national security—could force “over the top” services such as WhatsApp, which use mobile operators’ infrastructure, to allow the government access to users’ messages.
At the same time India’s Information Technology Ministry has proposed new intermediary guidelines that would force WhatsApp and others to trace messages and remove objectionable content within 24 hours.
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Under a new alliance with Volkswagen, Ford will engineer and produce pickup trucks for both companies. PHOTO: CARLOS OSORIO/ASSOCIATED PRESS
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Ford Motor Co. and Volkswagen AG agreed to build a global manufacturing alliance that the auto makers said could create nearly $1 billion in annual savings after 2023.
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Billionaire Edward Lampert won a bankruptcy auction for Sears Holdings Corp., keeping the struggling department store chain from shutting all its remaining stores, according to a person familiar with the matter.
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Netflix Inc. raised prices for all of its subscription plans, a move that could help the streaming-video giant maintain its aggressive spending on content in the face of stepped-up competition.
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Gannett Inc. has been pursuing a purchase of digital publisher Gizmodo Media Group, according to people familiar with the matter, an effort that could be complicated by the takeover approach the USA Today owner received this week from a hedge fund-backed rival.
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Developers of a glitzy new Manhattan shopping center think they have found a way to cash in on the surge in e-commerce: stock a floor with companies that began as online-only retailers. That is the grand experiment going on at Hudson Yards, a massive new commercial and residential development of 18 million square feet on the West Side.
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Take-Two Interactive Software Inc. will pay the National Basketball Association and its players’ union as much as $1.1 billion over seven years, a person familiar with the matter said, a window into the steep costs videogame makers can face in securing star power for their sports games.
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The FAA is calling back safety workers who had been sidelined during the partial government shutdown. PHOTO: ANDREW HARNIK/ASSOCIATED PRESS
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The Federal Aviation Administration has ordered nearly 3,000 inspectors and other employees in safety-critical jobs back to work, as the Transportation Security Administration said Tuesday that more than 99% of passengers waited less than 30 minutes to get through security Monday amid absences of workers during the partial government shutdown.
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Delta Air Lines Inc. forecast sluggish revenue growth for early this year in part because of business lost to the federal government shutdown.
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Shippers and freight-handlers say U.S. agencies that oversee the flow of goods are starting to cut back services and working hours, raising concerns that delays will spread across supply chains if the partial government shutdown continues much longer.
Auto makers are planning to ramp up the use of artificial intelligence across the production process as they seek ways to eke out efficiencies and cut costs.
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The reflection of the Spanish flag hits the window of a Banco Santander branch in Madrid. PHOTO: ANGEL NAVARRETE/BLOOMBERG NEWS
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Banco Santander SA said it has withdrawn a job offer to former UBS AG executive Andrea Orcel to be its next chief executive after concluding that the high-profile investment banker was too expensive.
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Publicly traded companies could have to put to a shareholder vote thorny proposals that they oppose if the government shutdown doesn’t end soon, since the Securities and Exchange Commission, which is operating with a skeleton staff, must sign off on requests by companies to exclude proposals from a vote at annual shareholder meetings.
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The former chief executive of PepsiCo Inc. and a Treasury Department official are among the candidates the Trump administration is considering to head the World Bank, an administration official said Tuesday.
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Former Nissan Motor Co. chairman Carlos Ghosn faces many more months in jail after losing a request for release on bail Tuesday, compounding concerns about the 64-year-old’s health and a Japanese legal system geared toward pressuring suspects into confessions.
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