|
The Morning Risk Report: PG&E to Plead Guilty to Involuntary Manslaughter Charges
|
|
|
|
|
|
|
A wildfire devastated Paradise, Calif., in 2018. PHOTO: NOAH BERGER/ASSOCIATED PRESS
|
|
|
Good morning. PG&E said it would accept criminal responsibility for starting the deadliest wildfire in California’s history, becoming one of a small number of U.S. corporations to plead guilty to felony charges of involuntary manslaughter. The indictment by a grand jury and PG&E’s decision to plead guilty put to rest significant questions about the extent of the company’s culpability in starting the Camp Fire in Butte County in 2018.
PG&E, which supplies electricity and natural gas to 16 million people, admitted its failure to maintain its equipment was criminally negligent and caused the deaths of more than 80 people. However, the indictment doesn’t charge any PG&E employees or executives.
[Continued below...]
|
|
|
Butte County District Attorney Mike Ramsey said evidence showed PG&E’s maintenance problems stemmed from decisions made by many people over many years, and he decided not to charge any single person.
On Monday, the San Francisco-based utility disclosed it would plead guilty to an indictment in Butte County. The indictment charges the company with 84 counts of manslaughter and one count of unlawfully causing a fire. The company has agreed to pay a $3.48 million penalty, the statutory maximum.
|
|
|
|
Senate Democrats’ Letter to the EU Indicates Policy Differences
|
|
A letter sent this month by a group of Democratic U.S. senators to the European Union calling for more sanctions on a Russian businessman over election-meddling concerns demonstrates the differences in sanctions policies on Russia between the EU and the U.S., sanctions experts say.
The letter signed by five U.S. senators urged the EU to step up economic isolation of Yevgeny Prigozhin—a Russian oligarch with alleged ties to Russian President Vladimir Putin and the Wagner Group, a Russian security company the senators say is tied to Mr. Prigozhin—over concerns of potential interference as the U.S. presidential election nears.
The Kremlin and Mr. Prigozhin have previously denied the allegations. A spokesman for Mr. Prigozhin has previously said Mr. Prigozhin has no relationship to the Wagner Group.
“There’s a sense in Europe that Russians are going to meddle in the elections, and one way to respond is to harden your defenses rather than punishing the Russians for this,” said Peter Harrell, an adjunct senior fellow in the energy, economics and security program at the Center for a New American Security, a Washington-based think tank.
Europe’s deep economic ties with Russia, from natural resources to investments, also make it more complicated for the EU to take a tougher stance on Russia, according to Mr. Harrell.
For the EU to adopt sanctions, all 27 member states need to make a unanimous decision. “In reality, if you have a single EU member state that is particularly concerned over the collateral costs of Russia sanctions, that member state is able to block actions,” Mr. Harrell said.
The specific target on Mr. Prigozhin is a smart decision for the senators who wrote the letter, as they pointed out his alleged activities in Syria, which is of more interest to the EU, Mr. Harrel said: “Prigozhin is an area where the EU and the U.S. should be able to coordinate on in terms of Russia sanctions.”
—Mengqi Sun
|
|
|
From Risk & Compliance Journal
|
|
|
|
Jens Henriksson, CEO of Swedbank, comments on a report that found a number of shortcomings in the lender’s anti-money laundering work in the Baltics. PHOTO: PONTUS LUNDAHL/SHUTTERSTOCK
|
|
|
The law firm hired by Swedbank AB to investigate past exposure to money laundering said Monday it found the Swedish lender had inadequate systems to manage risk but didn’t conclude it engaged in money laundering.
The law firm found payments to customer accounts worth 17.8 billion euros ($19.03 billion) and payments from customer accounts worth €18.9 billion in the bank’s Baltic subsidiaries between 2014 and 2019 that represented a high risk for money laundering. However, the firm said it cannot conclude money laundering actually took place.
|
|
|
|
‘There’s some discombobulation, but part of what we’re trying to do is keep up the mission,’ Attorney General William Barr said. PHOTO: SUSAN WALSH/ASSOCIATED PRESS
|
|
|
As with every aspect of American life, the coronavirus has upended the Justice Department and the way its more than 113,000 employees across the country work, including the attorney general.
More federal courts are drastically reducing operations, prisons are grappling with how to handle infections among inmates and criminal cases have stalled. Many prosecutors are working from home, unable to travel for investigations and trials, a large number of which have been suspended for weeks or longer.
“There’s some discombobulation, but part of what we’re trying to do is keep up the mission,” Attorney General William Barr said during an interview on the fifth floor of the Justice Department before returning to the Virginia suburbs, where he is spending more time working from the leather chair in his home office. He makes the drive to headquarters for national security meetings and others that are too sensitive to be done via phone. He still meets with White House officials at least once a day, he said, but now those meetings are sometimes done remotely.
|
|
|
-
Major U.S. airlines are drafting plans for a potential voluntary shutdown of virtually all passenger flights across the U.S., according to industry and federal officials, as government agencies also consider ordering such a move and the nation’s air-traffic control system continues to be ravaged by the coronavirus contagion.
-
The Food and Drug Administration is warning people to avoid any at-home tests for coronavirus, saying it hasn’t authorized any tests to be self-administered by consumers. The agency said it has begun to see “unauthorized fraudulent test kits that are being marketed to test for Covid-19 in the home,” and that fraudulent tests pose serious health risks.
-
Bankruptcy protections should be broadened for consumers and businesses to help ease the financial damage stemming from the coronavirus, an influential group of bankruptcy professionals said.
-
Financially strapped apartment landlords with government-backed mortgages can avoid foreclosure if they don’t evict tenants, the Federal Housing Finance Agency said Monday. The order applies to the Fannie Mae and Freddie Mac mortgage companies, which will extend mortgage forbearance to any landlord “negatively affected by the coronavirus national emergency,” according to the agency.
-
Federal regulators said they plan to temporarily halt routine inspections of nursing homes to focus on the most dangerous situations, as coronavirus cases mount in the facilities across the U.S. and serious infractions were found at the hardest-hit location.
-
Residents in the border city of Mexicali voted against the completion of a $1.4 billion brewery owned by Constellation Brands Inc. on grounds that its intensive water consumption was detrimental for the community, a move that risks undermining foreign investment in Mexico as the country faces a deep economic contraction.
-
Former field organizers for Michael Bloomberg’s campaign have filed two proposed class-action lawsuits in federal court in New York City, arguing the staffers were terminated after being promised jobs and benefits through November.
|
|
|
|
European Union Minister for Foreign Affairs Josep Borrell walking to a meeting in Brussels on Monday. PHOTO: OLIVIER HOSLET/SHUTTERSTOCK
|
|
|
-
Europeans became much gloomier about their economic prospects in early March as governments across the continent announced increasingly stringent restrictions on movement and social interaction, suffering the largest loss of confidence in a single month on record.
-
Goldman Sachs intervened to shore up two of its money-market mutual funds after the Federal Reserve created a backstop to stem a wave of investor redemptions from the products.
-
U.S. cotton growers were just clawing back from a tough year in which the U.S.-China trade war sent prices plummeting. Now the coronavirus pandemic has set them back again.
|
|
|
PCAOB Grants Audit Firms Up to 45 Days of Relief From Inspections
|
|
The Public Company Accounting Oversight Board said the relief from inspections amid the coronavirus pandemic is intended to give audit firms more time to work through issues with clients and give PCAOB staff the flexibility to review documents remotely and time to prepare for inspections.
The organization, which regulates public-company audits, said firms that want to exercise the option for all or part of the 45 days should reach out to their designated contact on the inspections staff. Audit firms would still have to provide the PCAOB with access to audit documentation for certain engagements, the regulator said Monday.
The PCAOB plans to resume inspections May 11. The organization said last week it had suspended international travel for non-U.S. firm inspections and other purposes until at least the end of April.
|
|
|
|
Discovery Inc. chief David Zaslav could potentially lose as much as $47 million on the value of stock options set to expire in January 2021. PHOTO: PATRICK T. FALLON/BLOOMBERG NEWS
|
|
|
Chief executives of large U.S. companies rode a more than decadelong bull market to a string of record pay days. Now, the stock market’s coronavirus-fueled swoon could wipe out hundreds of millions of dollars from executive pay packages and prompt a recalibration of how CEO compensation is set.
The potential losses highlight the flip side of stock-based compensation, experts say. The rout, which has destroyed trillions of dollars in market value for millions of retirees and investors, also is taking a chunk out of the equity awards that lifted many CEOs’ pay to all-time highs in recent years.
For 143 CEOs of S&P 500 companies, the median compensation in 2019 was $13 million, up from $11.2 million for the same group in 2018 and on pace to set a record if the pattern holds for the 2019 data, according to a Wall Street Journal analysis.
|
|
|
-
Amazon's Jeff Bezos and other top executives at U.S.-traded companies sold a total of roughly $9.2 billion in shares of their own companies between the start of February and the end of last week, a Wall Street Journal analysis shows.
-
A San Francisco pension fund is calling on major corporations to lend their resources, manufacturing capabilities and distribution networks to help fight the coronavirus, and to publicly report the actions they take.
-
Tupperware Brands said Mauro Schnaidman, the former chief executive of beauty company Jafra Cosmetics International, has joined the company's board. The direct-selling company has been adding new executives to its board as it looks to generate better financial results, attract more sellers for its food containers and beauty products, and reach consumers in new ways.
|
|
|
|
People walking past a Papa John's Pizza in Manhattan last month. The company is one of many seeking to hire workers amid the coronavirus pandemic. PHOTO: BESS ADLER FOR THE WALL STREET JOURNAL
|
|
|
Walmart, Amazon and CVS Health are among about a dozen large companies looking to hire nearly 500,000 Americans soon, a spree that would mark a major shift of the U.S. workforce from smaller businesses and others cutting staff to survive the coronavirus.
The hiring push comes as the companies are managing a surge in demand for food and other household products that have taxed their stores and warehouses. At the same time, they are seeking to lure hourly workers to front-line or logistics jobs where they face risks of being near co-workers or consumers who could have been exposed to the deadly respiratory virus.
|
|
|
-
Boeing said it would suspend airliner production in the Seattle area and General Electric said it would lay off workers making jet engines for customers including the aerospace giant, as the coronavirus pandemic places a heavy drag on U.S. industry. Many manufacturers have kept factories running even as confirmed cases of the virus have multiplied in the U.S. But more companies are closing at least some of their plants as demand plummets and some of their workers test positive for coronavirus.
-
Hospitals and states overwhelmed by the coronavirus pandemic say the nation’s safety net of medical-equipment supplies, the Strategic National Stockpile, is falling far short of need and are calling for federal officials to invoke national-defense powers to spur more manufacturing.
-
International car carrier Wallenius Wilhelmsen will cut its fleet by 14 vessels as automobile production and demand nosedive around the world amid the coronavirus pandemic.
-
Food sellers in the U.S. spent years making their supply chains efficient. Then a pandemic hit and the strategy backfired. In the past two decades, producers and grocery stores such as Kroger have gone from keeping months of inventory on hand to holding only a four to six weeks’ supply. For many items this month, though, that amount sold out in days. The run has exposed the downside of the food industry’s push to hold less stock in warehouses and operate fewer, fuller trucks to increase profit margins.
-
The coronavirus crisis has crushed the finances of Amtrak just as the company approached profitability, and the national railroad is now banking on a $1 billion bailout from Congress to stay afloat.
|
|
|
|
The plan marks a remarkable comedown for SoftBank Chief Executive Masayoshi Son. PHOTO: KIYOSHI OTA/BLOOMBERG NEWS
|
|
|
Japan’s SoftBank Group, which poured nearly $100 billion into pricey, cash-burning startups in the last years of the bull market, said Monday it would sell billions of dollars in assets to prop up its plunging stock price and shore up its debt-laden balance sheet following the threat of a ratings downgrade.
The plan marks a remarkable comedown for SoftBank Chief Executive Masayoshi Son and his company, which until recently was one of the boldest providers of capital to the world’s billion-dollar unicorns.
|
|
|
|
|
|