|
The Morning Risk Report: U.S. Seeks to Heighten Scrutiny of Foreign Investment
|
|
|
|
|
|
|
“Today’s proposed regulations will provide clarity and certainty to investors” about the expanding scope of possible national-security reviews of foreign investment, Treasury Secretary Steven Mnuchin said. PHOTO: ERIK S LESSER/SHUTTERSTOCK
|
|
|
Good morning. Foreign investors who want to put money into U.S. businesses that rely on sensitive technology, infrastructure and data could face greater national-security scrutiny under proposed rules released Tuesday by the Trump administration.
Treasury Department officials provided a first glimpse of how they would implement Congress’s order last year to expand the scope of national-security reviews of foreign investment deals, including those involving satellites, oil refineries, financial-market systems and drinking water utilities.
[Continued below...]
|
|
|
The proposed regulations explain some of the mechanics of a 2018 law passed by lawmakers concerned that the acquisition of U.S. companies by Chinese interests could pose risks to national security. Under the rule, failing to disclose investments, in some cases, could trigger fines.
The law strengthens the investment scope of the Committee on Foreign Investment in the United States, or Cfius, a Treasury-led panel of government agencies that review foreign investments for national security.
Tuesday’s proposed rules explained what kind of sensitive data collected by U.S. businesses could trigger a national-security review if a foreign investor becomes involved, narrowing the panel’s review authority to companies with data on more than one million people or on populations that include U.S. military members.
|
|
|
|
From Risk & Compliance Journal
|
|
|
|
Swedbank named a permanent compliance chief and said its anti-money-laundering functions have shortcomings. PHOTO: INTS KALNINS/REUTERS
|
|
|
Swedbank AB said Tuesday that it appointed Ingrid Harbo as permanent chief compliance officer, as investigations into its anti-money-laundering work continue.
The bank came under scrutiny in February after a Swedish broadcaster reported that billions of dollars of illicit funds may have passed through its Estonian branch in a link to money laundering at Danske Bank AS.
Swedbank also said Tuesday that it submitted answers to questions it received from the Financial Supervisory Authorities in Sweden and Estonia, as a result of ongoing investigations of the bank. The bank’s board of directors also decided to waive a legal privilege protecting work done by a lawyer on behalf of the bank, Swedbank said.
|
|
|
|
Jelena McWilliams of the FDIC, which moved to ease a rule related to banks’ trading businesses. PHOTO: AARON BERNSTEIN/REUTERS
|
|
|
Banking agencies moved to ease a postcrisis rule that could free up nearly $40 billion for big global banks, the latest regulatory victory for Wall Street.
The Federal Deposit Insurance Corp. and the Office of the Comptroller of the Currency approved a proposal that would reduce the amount of cash large lenders, including JPMorgan Chase & Co. and Goldman Sachs Group Inc., must post to cover the risk of trades going bad in the swaps market.
Swaps are contracts in which two parties agree to exchange payments based on fluctuations in interest rates or other benchmarks. Financial regulators in 2015 required banks to put down a set amount of collateral, or initial margin, in swaps transactions between affiliates of the same firm.
|
|
|
-
Raymond James Financial Inc. has settled an order with the Securities and Exchange Commission over improperly charging fees and excess commissions and has agreed to pay the regulator $15 million.
-
The Trump administration told the Supreme Court Tuesday that the Consumer Financial Protection Bureau is unconstitutional because Congress limited the president’s power to remove the agency’s director before his or her five-year term expires.
|
|
|
|
A spokesman for Walmart said complaints are ‘not representative of the positive experiences millions of women have had working at Walmart.’ PHOTO: PATRICK T. FALLON/BLOOMBERG NEWS
|
|
|
Walmart Inc. likely discriminated against 178 female workers by paying less or denying promotions because of their gender, the Equal Employment Opportunity Commission said in memos viewed by The Wall Street Journal.
The EEOC documents ask Walmart and the women who filed complaints to come to a just resolution of the matter, which could include a settlement and changes to Walmart’s practices, say labor lawyers. If Walmart and the women don’t reach an agreement, the EEOC could file a lawsuit against the retailer.
The determination by the federal regulator marks a milestone in a nearly two-decade effort by current and former store workers to seek damages from the retail behemoth for discrimination.
|
|
|
-
Brazilian police are set to announce the first criminal charges against employees of mining giant Vale SA and German safety inspector TÜV SÜD as early as this week over the deadly collapse of a mine-waste dam in January, according to a person familiar with the probe. Police expect to formally accuse eight to 12 people from both companies for the crime of false representation in the first of a series of charges, alleging that certificates produced by TÜV SÜD to attest to the stability of Vale’s fateful dam were issued fraudulently, the person said, without naming the individuals.
-
U.S. prosecutors charged an additional mother in the college-admissions cheating case, alleging she paid $400,000 to get her son into UCLA and marking the 52nd person to face criminal prosecution in the sprawling scheme. The woman, a Chinese national named Xiaoning Sui, was arrested Monday night in Spain and is being held there as U.S. authorities seek her extradition to Boston. An indictment against her was unsealed Tuesday in Boston federal court.
-
The Securities and Exchange Commission charged the former chief executive of an oil-and-gas production company with fraud for allegedly falsifying the existence of its previous finance chief.
-
Amid a rash of pulmonary illnesses and several deaths in the U.S. linked to vaping and e-cigarette usage, New York state health officials on Tuesday passed an emergency regulation temporarily banning the sale of flavored e-cigarettes and nicotine e-liquids.
|
|
|
|
House Judiciary Committee Chairman Jerrold Nadler on Capitol Hill in July. PHOTO: SUSAN WALSH/ASSOCIATED PRESS
|
|
|
The House Judiciary Committee is seeking information from competitors to large technology firms as it probes whether they have abused their market power, according to people familiar with the matter. Letters sent to the competitors follow detailed document requests sent Friday to Amazon.com Inc., Facebook Inc., Apple Inc. and Google parent Alphabet Inc.
The additional letters went to dozens of companies, some of the people said. What information the letters seek hasn’t yet been made public. Information from companies that compete with the technology giants could be helpful to lawmakers in understanding the markets in which the tech giants operate, and the effect of the tech giants’ business practices.
|
|
|
Facebook Inc. will give an independent board the ability to review and potentially overturn content-moderation decisions, the social-network operator said Tuesday, giving authority to outsiders to oversee some of the thorniest issues the company has faced in recent years.
The new board, to be funded through an outside trust, will consist of 40 paid, part-time members who will “seek to consider cases that have the greatest potential to guide future decisions and policies,” the board’s charter states.
Acting functionally as an appellate court, board members will adjudicate controversies arising from Facebook’s in-house efforts to enforce its standards on hate speech, misinformation and other prohibited content. After hearing cases in five-person panels, the full board will make binding decisions on specific pieces of content as well as issue broader policy recommendations that the company must publicly address.
|
|
|
|
General Motors Co. factory workers went on strike Monday in the United Auto Workers’ largest work stoppage in more than a decade. PHOTO: NICK HAGEN FOR THE WALL STREET JOURNAL
|
|
|
The United Auto Workers strike against General Motors Co. could detract further from the U.S. economy at a time of mounting global uncertainty, but it would take a lengthy stoppage to inflict widespread pain, economists say.
Factory workers at General Motors went on a nationwide strike early Monday morning in the United Auto Workers’ largest work stoppage in more than a decade. The main outcome will be lower manufacturing production, economists say. That will also dent consumer spending, incomes and tax revenues in areas where assembly plants are located.
“Overall, we think a short-lived strike won’t have a major impact on the economy, although the magnitude of the strike’s impact should increase the longer that it lasts,” JPMorgan Chase economist Daniel Silver said in a note to clients.
|
|
|
Public Companies Consider New Controls to Prepare For Audit Rule
|
|
Companies preparing for a new auditing rule are unearthing knotty internal issues, and these revelations are prompting executives to strengthen internal controls.
The Public Company Accounting Oversight Board rule, which began taking effect in phases this summer, requires independent auditors to disclose what they found to be the most challenging in reviewing companies’ financial statements.
The auditor’s letter in a company’s annual report has long followed a pass/fail model and has been known to rely on boilerplate language. The pass/fail model remains, but the now-expanded auditor’s report is more tailored, giving investors a window into issues that may not have been previously apparent.
|
|
|
|
A Coast Guard vessel patrolling the Hudson River with the Staten Island Ferry behind it. PHOTO: JULIO CORTEZ/ASSOCIATED PRESS
|
|
|
The Coast Guard might be the smallest of the nation’s armed forces, but when it comes to cybersecurity, it believes it can punch above its weight. Because of its mandate to secure U.S. maritime borders and ports, it has powers as a warfighting force, law-enforcement agency, regulator and member of the intelligence community.
“We have the potential to become a true utility player in cyber,” Capt. Jason Tama, commander of the Guard’s Sector New York region and captain of the Port of New York and New Jersey, said in an interview. Capt. Tama, who has been with the Coast Guard for more than 20 years and in his current role since 2018, oversees the 6,000 square miles of water that constitute Sector New York.
|
|
|
-
The conviction of a former Goldman Sachs Group Inc. computer programmer should be tossed because he has been prosecuted twice for the same conduct, his lawyer told a New York state appeals court Tuesday, marking the latest chapter in a decade-long legal saga.
|
|
|
|
Trulioo founder and Chief Executive Stephen Ufford. PHOTO: TRULIOO INFORMATION SERVICES INC.
|
|
|
Several Wall Street banks and financial firms have invested 60 million Canadian dollars ($45.2 million) in identity verification startup Trulioo Information Services Inc.
Goldman Sachs Growth Equity led the company’s Series C financing round, with participation from Citi Ventures, Santander InnoVentures and American Express Ventures.
The Vancouver, British Columbia-based startup offers security software for financial-services providers, banks, payment providers, online gaming companies and other customers. Trulioo’s software helps companies comply with rules designed to prevent money laundering online and to mitigate the risk of fraud as they conduct cross-border transactions with new customers or new merchants.
|
|
|
|