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The Morning Risk Report: Morgan Stanley to Pay $150 Million to Settle California Case
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California’s attorney general says Morgan Stanley will pay $150 million to settle a case stemming from financial crisis-era allegations that it misled investors. PHOTO: SHANNON STAPLETON/REUTERS
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Good morning. California’s attorney general said Morgan Stanley has agreed to pay $150 million to settle allegations that the company misled investors, including pension funds serving the state’s teachers and public employees.
Morgan Stanley was alleged to have misled investors by concealing the high risks involved with the mortgage-backed securities it sold. Both the California Public Employees’ Retirement System and the California State Teachers' Retirement System purchased these securities between 2003 and 2007.
[Continued below...]
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From Risk & Compliance Journal
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The U.S. Treasury Department Wednesday blacklisted two individuals and three companies that are alleged to have helped financiers of Hezbollah evade sanctions. PHOTO: MANDEL NGAN/AGENCE FRANCE-PRESSE/GETTY IMAGES
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The U.S. Treasury Department Wednesday blacklisted individuals and companies that are alleged to have helped financiers of Hezbollah evade sanctions. The designations come as the Trump administration continues to probe the financing network of the Iran-backed, Lebanon-based militia and political organization, which has been designated a terrorist group by the U.S.
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The Federal Reserve has ordered the New York branch of a large Japanese lender to bolster its compliance with anti-money-laundering and sanctions laws.
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Amgen agreed to pay about $25 million over its financial support to charities that offered patients its thyroid drug Sensipar and its multiple myeloma drug Kyprolis. PHOTO: ROBERT GALBRAITH/REUTERS
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Amgen Inc. and Astellas Pharma Inc.’s U.S. unit have agreed to pay a total of $125 million to resolve kickback allegations that they violated federal law by using charities to pay for Medicare patients’ out-of-pocket costs for the companies’ own drugs, federal prosecutors said.
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Freight trucking company Celadon Group Inc. has agreed to pay $42.2 million to settle fraud claims after filing false financial statements and lying to auditors in efforts to hide the losses from its aging trucking fleet. Indianapolis-based Celadon admitted to inflating the value of more than 1,000 used trucks through false transactions with a third party, the Justice Department and Securities and Exchange Commission said.
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A cryptocurrency exchange that claims real dollars back its popular digital coin Tether raided those reserves to cover up $850 million that went missing, the New York attorney general’s office said. The findings emerged from an investigation into cryptocurrency exchanges that launched in 2018 and is continuing. A report in September warned that many exchanges lacked basic safeguards and left consumers vulnerable to exploitation by market manipulators.
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Elon Musk and the Securities and Exchange Commission want more time to work out their dispute over whether the Tesla Inc. chief executive violated a court order restricting his use of social media. U.S. District Judge Alison Nathan already granted the two sides a one-week extension to continue negotiating, after she ordered them on April 4 to resolve the SEC’s request to have Mr. Musk held in contempt of court. In a court filing submitted late Thursday, Mr. Musk and the regulator sought a new deadline of April 30.
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U.S. trade officials acknowledged steps by Alibaba Group Holding Ltd. to curb the sale of counterfeit goods on the Chinese company’s Taobao.com platform but left the e-commerce site on the list of “notorious markets” that the U.S. deems deficient in preventing intellectual-property violations.
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The Defense Department Office of Inspector General concluded that acting Defense Secretary Pat Shanahan didn’t seek preferential treatment for his longtime former employer, Boeing Co., while serving in government, removing a hurdle to his formal nomination to the post.
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Facebook’s website is displayed on a laptop on April 22. PHOTO: GABBY JONES/BLOOMBERG NEWS
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Canada’s main privacy watchdog said Thursday a yearlong probe found Facebook Inc. broke the country’s privacy laws and failed to protect Canadians’ personal information, and will go to court to force the social-media company to fix the deficiencies it uncovered.
A report released by the privacy commissioner of Canada and privacy commissioner for the province of British Columbia said the company disputes the watchdog's findings and has refused to act on the report’s recommendations. A representative for Facebook wasn’t immediately available for comment.
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Glenn Booraem, Vanguard’s investment stewardship head. PHOTO: VANGUARD
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Money management giant Vanguard Group rose to become one of the most important shareholders in American corporations over the last decade. Now it is handing some of that voting power to outside stock pickers that oversee more than $470 billion of its holdings.
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Chinese tech giant Huawei Technologies Co. on Thursday laid out details of its ownership structure in an attempt to rebut critics who have cast doubt on the company’s claim that it is owned and run by its employees. The complex corporate structure described, however, is unlikely to vanquish concerns that the company isn’t completely independent of Beijing, and it confirms that key powers rest in the hands of its ex-military founder, Ren Zhengfei.
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Bayer AG’s shares rose 1.4% Thursday on better-than-expected results, giving the company a brief respite ahead of Friday’s potentially unruly shareholder meeting, as investors grow impatient with the company’s legal woes in the U.S.
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Digital First Media, the hedge fund-backed media company pushing Gannett Co. to sell itself, cut the number of seats it is seeking on Gannett’s board in half Thursday.
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Apple's Steve Jobs Theater at Apple Park in Cupertino, Calif. The company’s industrial design team is undergoing its most pronounced turnover in decades. PHOTO: NOAH BERGER/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Apple Inc.’s close-knit industrial design team is undergoing its most pronounced turnover in decades, marking a changing of the guard for the famed group that has defined the tech giant’s aesthetic and spearheaded the development of products including the iPhone.
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3M Co. said it would cut 2,000 jobs and restructure its sprawling business as it made fewer sales to car makers in China and electronics companies in Japan amid a broad slowdown in its business.
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United Parcel Service Inc. posted a lower profit in the first quarter as upgrades to its parcel delivery network proved no match for Mother Nature. The delivery giant said it incurred about $80 million in extra costs associated with dealing with severe winter weather in the U.S., causing operating profit to fall 12% in its main business unit.
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With the results of an FTC probe looming, Facebook has set aside $3 billion to pay for any potential settlement—and estimated the figure could go as high as $5 billion. PHOTO: ELISE AMENDOLA/ASSOCIATED PRESS
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The Federal Trade Commission’s coming resolution of its yearlong investigation of alleged privacy lapses at Facebook Inc. looms as a defining moment for U.S. policy on consumer data, one with lasting ramifications for companies that collect it.
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Southwest Airlines Co., the biggest customer for Boeing Co.’s 737 MAX, said the grounding of the plane after two fatal crashes has cut into its growth plans and driven up costs.
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Deutsche Bank AG cut its full-year revenue target to “essentially flat” from 2018 in quarterly results, a day after saying it ended merger talks with smaller rival Commerzbank AG. Meanwhile, the collapse of merger talks has opened the door to what the German government was trying to avoid in the first place: a foreign takeover of its banks.
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Intel Corp. lowered its financial expectations for the year and reported its first decline in sales of data-center chips in seven years, reflecting uncertainty in the business-computing market and slowing demand amid the U.S.-China trade battle.
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Mattel Inc.’s sales fell 3% in the first quarter as slumps at Fisher-Price, American Girl and other brands continued to offset gains by Barbie and Hot Wheels toys.
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Robots assemble Renault and Nissan automobiles at the Renault SA car factory in Flins, near Paris, in 2017. PHOTO: REUTERS/BENOIT TESSIER
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Renault SA plans to propose to partner Nissan Motor Co. that the companies merge under a new holding company, according to people familiar with the proposal. Under the proposal, Nissan shareholders and Renault shareholders would each receive a roughly 50% stake in the new company. Nissan has yet to hear details of the proposal, said the people.
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Uber Technologies Inc. ratcheted down its target valuation to a range of about $80 billion to $90 billion for its initial public offering, according to people familiar with the matter. Uber’s target is the latest calibration downward for the ride-hailing service as it careens toward its IPO, expected to be the second-largest U.S.-listed debut in history
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As the sedan has fallen out of favor with many U.S. car buyers, auto makers have rushed to introduce cheaper, more diminutive sport-utilities to their lineups. In some cases, auto makers are targeting younger consumers with smaller SUVs, only to find older drivers more enthusiastic about the models. Meanwhile, Ford Motor Co.’s first-quarter operating profit rose 12%, as the auto maker shored up overseas losses and notched sharp gains from the strength of its pickup-truck and sport-utility lineup in the U.S.
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Amazon.com Inc. notched a best-ever $3.56 billion quarterly profit as it continued to lean on higher margin businesses and put a lid on costs. Expenses, however, are expected to jump in the second quarter in part because Amazon said it would invest $800 million to make one-day free shipping the standard for Prime members, instead of two days.
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Telecommunications-equipment maker Avaya Holdings Corp. is in talks to combine with rival Mitel Networks Corp. in a stock deal worth more than $2 billion, people familiar with the matter said.
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Licensing company Authentic Brands Group LLC has emerged as a leading contender to buy Sports Illustrated from Meredith Corp., according to people familiar with the matter. The price is said to be about $110 million, the people said.
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