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The Morning Risk Report: Trudeau Found to Have Broken Conflict-of-Interest Law
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Canadian Prime Minister Justin Trudeau speaking earlier this month in Surrey, British Columbia. PHOTO: DARRYL DYCK/THE CANADIAN PRESS/ASSOCIATED PRESS
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Good morning. Canada’s ethics watchdog ruled that Prime Minister Justin Trudeau broke conflict-of-interest laws by trying to steer the then-attorney general away from criminally prosecuting a Montreal company.
The findings from Canada’s Office of the Conflict of Interest and Ethics Commissioner represent a fresh blow to Mr. Trudeau, support for whom has tumbled in the wake of revelations in February that the Canadian leader and his senior officials had tried to persuade the attorney-general, Jody Wilson-Raybould, to let SNC-Lavalin Group Inc. avoid a criminal trial on bribery and fraud charges.
[Continued below…]
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The report found that actions by Mr. Trudeau and his aides were improper because they were contrary to the principles of prosecutorial independence. The ethics watchdog said Mr. Trudeau violated a section of Canada’s conflict-of-interests law that prohibits public-office holders from using their posts to improperly further someone else’s private interests. SNC-Lavalin had significant financial interests to avoid a trial, the ethics report found.
Mr. Trudeau faces no penalty as a result of the watchdog’s finding, according to a spokeswoman for Mario Dion, the ethics commissioner. Mr. Trudeau, speaking to reporters in Niagara-on-the-Lake, Ontario, said he disagreed with some of the ethics watchdog’s conclusions. “I can’t apologize for standing up for Canadian jobs,” he said. “We need to be able to talk about the impacts on Canadians of decisions being made.”
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U.S. Truck Manufacturer Settles Alleged Iranian Sanctions Violations
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A U.S. truck manufacturer has agreed to pay more than $1.7 million to settle allegations that it violated U.S. sanctions on Iran, the U.S. Treasury said.
The Treasury said a Paccar Inc. subsidiary in the Netherlands allegedly sold or supplied 63 trucks to customers in Europe that were intended for buyers in Iran, according to a statement from the Office of Foreign Assets Control. The Bellevue, Wash.-based company received credit for voluntarily disclosing the alleged violations and for cooperating with OFAC’s investigation.
Paccar didn’t immediately respond to a request for comment Wednesday.
U.S. sanctions compliance fines have reached a decade high this year. About $1.3 billion in total penalties, from at least 19 settlements, have been issued by OFAC so far this year, according to OFAC.
—Mengqi Sun
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Bubble Wrap maker Sealed Air, under federal investigation, has dismissed audit firm Ernst & Young and hired PricewaterhouseCoopers. PHOTO: LORETTA CHAO/THE WALL STREET JOURNAL
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Sealed Air Corp. dismissed audit firm Ernst & Young LLP and hired PricewaterhouseCoopers LLP, citing dissatisfaction over the audit-firm selection process and a possibility it could be forced by the government to change auditors, the company disclosed.
The replacement took effect Aug. 7 but was disclosed this week in a securities filing. It is the latest development related to federal investigations into the company’s financial practices and audit-firm selection process, starting in 2015, including the independence of the audit firm.
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Highway safety regulators are proposing changes to rules that limit truckers’ daily driving hours. PHOTO: SCOTT OLSON/GETTY IMAGES
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Highway safety regulators are proposing changes to rules that limit truckers’ daily driving hours, shifts they say would save millions of dollars. Under a plan released by the Federal Motor Carrier Safety Administration, commercial truck drivers could split their required 10-hour rest period into two separate breaks instead of having to take it all at once.
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Novartis AG has replaced two research executives at the unit that makes Zolgensma, the world’s most expensive drug, in the wake of a data-manipulation scandal that surfaced a week ago. The Swiss drug giant said that Brian and Allan Kaspar, brothers who led research at the company’s AveXis unit, hadn’t been involved in any operations since early May and are no longer with Novartis.
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Connecticut mortgage lender 1st Alliance Lending’s fortunes were rising in 2016 when it was awarded a multimillion-dollar package of state subsidies to help expand the company to 300 employees. Now, the firm says it is verging on ruin after a dispute with state regulators.
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The U.S. has made an application in Gibraltar’s Supreme Court to seize an Iranian tanker that the British overseas territory impounded in July, a move that complicates efforts to resolve a brewing crisis between the U.K. and Iran.
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A forklift moves steel pipes at the Borusan Mannesmann plant in Baytown, Texas, in April. PHOTO: LOREN ELLIOTT/ASSOCIATED PRESS
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Warning signs pointing to a deepening global economic slowdown—and the risk of recession—are flashing more brightly. The Dow Jones Industrial Average fell about 800 points, or some 3.1%, in its biggest loss of the year. Wall Street analysts have cut their third-quarter profit estimates in recent weeks.
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In a troubling sign heading into the key back-to-school and holiday seasons, department store chain Macy’s Inc. said inventories of unsold items swelled in the summer quarter. At the same time, the company and its rivals face the prospect of tariffs on some Chinese apparel imports starting next month. The results sent Macy’s shares tumbling, and darkened the outlook for the broader retail sector as it kicks off its earnings season.
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Concern is rising in Germany about the economic impact of the industry’s move to electric vehicles from gasoline-powered cars. Officials and executives in Germany fear the country’s big car companies and rich ecosystem of suppliers and service providers are insufficiently prepared for the transition, and that their leadership may not be assured in an electric-car world, threatening jobs, tax revenue and even growth.
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Capital One has said the data breach will cost it as much as $150 million. PHOTO: JEFF CHIU/ASSOCIATED PRESS
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The hacker charged with stealing millions of Capital One Financial Corp. records hit more than 30 other targets, federal prosecutors said, significantly expanding the scale of what was already considered one of the largest heists of data stored in the cloud. The accused hacker, Paige A. Thompson, a former Amazon.com Inc. employee, was arrested on July 29, and charged with the theft of 106 million Capital One records in one of the largest-ever bank-data thefts.
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As companies and municipalities struggle to deal with ransomware attacks that lock down computers and hold data hostage, many organizations are turning to artificial intelligence to quickly detect the malware and stop it from spreading. Michael Sherwood, the director of innovation and technology for the city of Las Vegas, has augmented the city’s cyber defenses with AI over the past three years to detect and respond to threats around the clock. Hackers, like casinos, never sleep.
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Technicians from Huawei Technologies Co., in at least two cases, personally helped African governments spy on their political opponents, including intercepting their encrypted communications and social media, and using cell data to track their whereabouts, according to senior security officials working directly with the Huawei employees in these countries.
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Viacom’s headquarters in New York PHOTO: RICHARD B. LEVINE/ZUMA PRESS
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The merger of CBS Corp. and Viacom Inc. creates a larger media company better positioned to pursue advanced advertising technology and ad-supported streaming video. The logic of the merger, which would create a company valued at $30 billion, is that greater scale will give Viacom and CBS a leg up in all areas of their business—more leverage in negotiations over carriage fees with cable- and satellite-TV distributors, for example, and more programming to sell into a competitive streaming marketplace.
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Real-estate firm Keller Williams is joining with home-sales platform Offerpad, expanding its reach into the fast-growing market of algorithm-driven home sales. The realty franchise entered the all-cash, online sales market known as iBuying in May. The new agreement will give Offerpad first dibs any time a Keller Williams customer wants to sell to an iBuyer instead of putting their home on the open market.
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