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The Morning Risk Report: Options Clearing Corp. to Pay $20 Million to SEC, CFTC
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The Commodity Futures Trading Commission and the SEC have reached a settlement with the Options Clearing Corp. PHOTO: STEPHEN VOSS FOR THE WALL STREET JOURNAL
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Good morning. The central clearinghouse serving as a backstop for trades in the options market has agreed to pay a $20 million fine and strengthen its compliance programs to settle U.S. regulatory investigations.
Options Clearing Corp. will pay the penalty to the Securities and Exchange Commission and the Commodity Futures Trading Commission, The Wall Street Journal reported earlier, citing people familiar with the matter. The settlement, which was confirmed by the regulators late Wednesday, will close one chapter in a period of turbulence at the financial-market utility, which has struggled for several years with compliance issues and the implementation of a new capital plan.
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OCC will be required to employ a compliance auditor to monitor its efforts and report on progress, according to the statement and the Journal’s reporting. The auditor will be hired within one month and must deliver a series of reports to the OCC's board of directors and the SEC assessing whether OCC fixed problems identified over the past couple years. The $20 million fine will include $15 million to the SEC and $5 million to the CFTC.
OCC has been criticized in recent years over how it has managed risk in derivatives. In 2013, the SEC cited OCC for a dozen compliance deficiencies related to inadequate risk-management systems, corporate governance and compliance.
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From Risk & Compliance Journal
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Construction conglomerate Odebrecht SA reached a settlement agreement with the Inter-American Development Bank over bribery charges. PHOTO: AMANDA PEROBELLI/REUTERS
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Brazilian construction conglomerate Odebrecht SA will pay $50 million in charitable contributions to resolve allegations of bribery under a deal reached with a Latin American development bank. The payments will go to charities and nonprofit organizations that operate in Latin America, the Inter-American Development Bank said Wednesday.
The IDB settlement is the latest in a long series of setbacks for Odebrecht, one of the most high-profile targets of a landmark corruption investigation into Brazil’s state-controlled oil company, Petróleo Brasileiro SA, also known as Petrobras.
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Universal Health Services to Negotiate Compliance Agreement
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Universal Health Services Inc. is preparing to negotiate a compliance agreement with the federal government as part of a proposal to settle allegations of faulty billing practices. “We have presented to the government what our compliance program entails, and we think it’s fairly robust and comprehensive,” Steve Filton, finance chief of the hospital-management company, said Wednesday during a health-care industry conference.
UHS disclosed in July that it had reached an agreement in principle with the U.S. Department of Justice and various state attorneys general over billing practices in its behavioral-health division.
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Iranian Revolutionary Guards patrol around the British-flagged tanker Stena Impero as it's anchored off the Iranian port city of Bandar Abbas. PHOTO: HASAN SHIRVANI/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The Trump administration cast new doubt Wednesday on efforts by France to ease tensions between the U.S. and Iran as Washington sanctioned placed sanctions on what it called an Iranian “oil-for-terror” exporting network.
In Tehran, the clerical government also cast doubt on a deal being reached on the French proposal by a Saturday deadline set by Iran. The country’s deputy foreign minister threatened Iran would further breach its commitments under the nuclear deal.
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Google’s YouTube agreed to provide new protections for children on its platform and pay a $170 million fine, in a settlement that sharpened government debate over how to rein in technology giants.
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A federal judge on Wednesday approved a Justice Department settlement that allowed CVS Health Corp.’s nearly $70 billion acquisition of health insurer Aetna Inc., removing a cloud of uncertainty for the merged company.
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Credit Suisse Group AG scored a legal victory in New York federal court against currency traders who claimed the bank and others helped rig foreign-exchange rates, in a case that rivals have already paid $2.3 billion to settle.
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Bayer AG’s efforts to fend off thousands of lawsuits against its Roundup herbicide were dealt a symbolic blow Wednesday when Germany, the company’s home country.
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A former top aide at the United Auto Workers union pleaded guilty to conspiracy charges, the latest development in a federal investigation into corruption within the leadership ranks that recently expanded to current and former UAW presidents.
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Facebook says it is clear that people should be able to transfer data such as the photos they upload to a social network, but unclear whether friends’ contact information should also be portable. PHOTO: THIBAULT CAMUS/ASSOCIATED PRESS
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Facebook Inc. has promised regulators that it will protect users’ privacy and give them the right to take their data where they choose. Now the company is trying to figure out how it can do both.
In a white paper issued Wednesday, the social-media giant outlines how those two big mandates are potentially in conflict. The company said it is seeking outside input on how to deliver on both objectives and get a consensus on how the industry will handle such matters going forward.
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Twitter Inc. said it was temporarily turning off a feature that allows users to send tweets via text message following a spate of hacks affecting several high-profile users, including the company’s Chief Executive Jack Dorsey.
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Target made clear its suppliers, not shoppers, should absorb cost increases stemming from new tariffs on Chinese products. PHOTO: JOE RAEDLE/GETTY IMAGES
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New tariffs on consumer goods from China are forcing retailers to find ways to minimize the impact on shoppers, including sourcing goods elsewhere and trimming costs. One strategy embraced by retail giant Target Corp.: Get someone else to foot the bill.
Days before new tariffs went into force Sept. 1, Target sent a letter to suppliers saying that it “will not accept any new cost increases related to tariffs on goods imported from China,” according to a memo signed by Mark Tritton, the retailer’s chief merchandising officer.
Target and other store chains had previously warned the U.S. government that consumers would be on the hook, with higher prices at checkout.
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‘A lot of the raw work in corporate tax work is around data and technology,’ said Carmine Di Sibio, Ernst & Young’s global chairman and CEO. PHOTO: MIKE BLAKE/REUTERS
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As technology is increasingly integrated into corporate accounting processes, companies’ expectations of accounting firms have changed. That is causing Ernst & Young to rethink its strategy.
The Big Four accounting firm, which is about halfway through a two-year plan to invest $1 billion in technology across its four main businesses, is planning to unveil a new strategy focused on heightened technological investment, said Carmine Di Sibio, EY’s global chairman and chief executive.
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John Slosar, chairman of Cathay Pacific Airways, on Aug. 7 in Hong Kong. PHOTO: PAUL YEUNG/BLOOMBERG NEWS
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The chairman for Cathay Pacific Airways Ltd. resigned, weeks after the chief executive quit when the Hong Kong airline came under fire from Beijing because some of its employees took part in antigovernment protests.
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Goldman Sachs Group Inc.’s partnership is shrinking under a new chief executive who wants to restore its exclusivity. As many as a dozen Goldman partners are negotiating their exits from the firm and likely to depart by year’s end, executives said.
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Tapestry Inc., the handbag company that combined the Coach and Kate Spade brands, ousted its chief executive a little over two years after a merger that was supposed to create a U.S. fashion powerhouse.
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Office-space startup WeWork is adding its first female board member and unwinding a transaction between the company and its chief executive, after criticism ahead of a planned initial public offering of stock.
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Luxury retailer Neiman Marcus Group Ltd. is on the hunt for a new finance chief as it struggles to boost revenue in a competitive retail landscape.
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