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The Morning Risk Report: Chinese Authorities Drop Case Against Former Alibaba Manager Accused of Sexual Assault
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Alibaba Group said it would take a recent incident involving sexual-assault accusations as a lesson. PHOTO: THOMAS PETER/REUTERS
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Good morning. Chinese authorities said the actions of a manager with e-commerce giant Alibaba Group Holding Ltd. accused of sexually assaulting a co-worker didn’t rise to the level of a crime, dropping a case that had drawn widespread public attention and sent Chinese tech companies scrambling to implement sexual-harassment policies.
District prosecutors in the eastern China province of Shandong said in a one-line statement late Monday that they wouldn’t pursue criminal charges against the accused man, Wang Chengwen, despite a determination by police that he had committed an act of “forcible indecency” against a co-worker while on a business trip. It offered no further details. In a separate statement issued the same night, local police handling the matter said they would subject Mr. Wang to 15 days of administrative detention.
[Continued below...]
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Prosecutors have wide discretion in deciding whether an act of forcible indecency constitutes a crime and according to Chinese law can impose a penalty of up to five years in prison depending on the severity of the sexual assault. Instead they punished Mr. Wang with the maximum penalty for common indecency.
A female Alibaba employee accused Mr. Wang of sexual assault in late July and later posted an 11-page account of the episode on an internal company discussion board. The account spread onto Chinese social media, where it triggered a flood of anger over Alibaba’s handling of the matter and widespread debate about the prevalence of sexual misconduct in Chinese workplaces.
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WSJ Risk & Compliance Forum
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Join us on Oct. 12 for the WSJ Risk & Compliance Forum. The virtual program includes sessions on anti-money laundering laws, emerging risks, compliance and cryptocurrencies, lessons from Wirecard and workshops on ESG reporting and responding to ransomware. You can register here.
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From Risk & Compliance Journal
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Denise Sanchez, former compliance officer in the U.S. for Marsh McLennan’s brokerage arm, became the group’s compliance chief on Tuesday. PHOTO: PAVLO GONCHAR/ZUMA PRESS
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Marsh & McLennan Appoints Dedicated Compliance Chief
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Marsh & McLennan Cos. has appointed a dedicated compliance chief following the promotion of the professional services company’s deputy general counsel, who had previously overseen the function.
Denise Sanchez, the former compliance officer in the U.S. for Marsh McLennan’s brokerage arm, began as the group’s chief compliance officer on Tuesday, the company said. In her new role, she will join with compliance chiefs in each of Marsh McLennan’s four businesses to manage compliance risks across the enterprise.
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Prosecutors allege that Theranos’s technology was unreliable, inaccurate and known to be so, despite founder Elizabeth Holmes’s public claims to the contrary. PHOTO: NICK OTTO/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Silicon Valley startups are often perceived to be walking a line between exaggeration and deception in promoting their products. Federal prosecutors trying Theranos Inc. founder Elizabeth Holmes in California must convince a jury that she didn’t believe her own hype.
Ms. Holmes’s trial is slated to begin Wednesday, when her lawyers and prosecutors for the U.S. attorney’s office for the Northern District of California make their opening statements, kicking off what is expected to be several weeks of witness testimony.
Ms. Holmes is the rare chief executive to personally go on trial, facing charges of defrauding patients and investors about the nature of her startup’s blood-testing technology.
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Tiny and impoverished El Salvador’s became the first country in the world to adopt bitcoin as legal tender. The administration of President Nayib Bukele has shrugged off warnings from creditors such as the International Monetary Fund, which advised against the adoption of privately issued tokens that bypass authorities and open doors to illicit transactions.
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Bitcoin Price Tumbles After El Salvador Makes It National Currency
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Secretary of State Antony Blinken said the U.S. is negotiating with the Taliban on resolving issues that are preventing American citizens and vulnerable Afghans from leaving Afghanistan through charter flights. U.S. officials say that allowing the exit of Americans and vulnerable Afghans is the primary requirement for the U.S. to consider rolling back sanctions on Taliban officials, restarting government aid, freeing up funds and potentially normalizing relations with a Taliban-led government someday. The Taliban also unveiled new Afghan government.
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Health-food provider JSC VkusVill and stock exchange PJSC SPB Exchange are preparing for initial public offerings in the U.S. this year or early next, according to people familiar with the companies, the latest in a string of Russian corporations joining the global IPO rush. This year is shaping up to be the one of the most active for share sales since Moscow was slapped with international sanctions in 2014.
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The Scottish Environmental Protection Agency was the victim of a ransomware attack last Christmas Eve and had stolen data published. PHOTO: ALAMY
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As if companies and organizations didn’t have enough to worry about with cybersecurity, add a new type of ransomware attack to the list: cybercriminals who steal sensitive data and threaten to publish it online unless the victim pays a large ransom, Catherine Stupp reports for The Wall Street Journal.
The potential damage goes well beyond the initial ransom payments. Victims face legal and reputational risks, in particular if sensitive or embarrassing information is leaked. What’s more, there’s no guarantee that the hackers won’t publish the stolen data after the ransom has been paid, cybersecurity experts say.
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The New York Stock Exchange closed for four trading days after 9/11, its longest shutdown since 1933. PHOTO: CHRIS HONDROS/GETTY IMAGES
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The nearly weeklong stock-market shutdown that followed the Sept. 11 attacks seems unimaginable in today’s world of round-the-clock trading.
During the past 20 years, advances in technology and broad efforts to bolster U.S. market infrastructure have made such outages rare.
Yet some investors and officials worry that financial markets could still be crippled by an attack—one using sophisticated hacking tools rather than physical force.
“As we have digitized our lives, which has generally been a great blessing, we have sown the seeds for even greater destruction in terms of the ability to hack into our systems,” says former Securities and Exchange Commission Chairman Harvey Pitt, who led the agency on Sept. 11, 2001. “That is today’s equivalent of a 9/11 attack. There is a potential ‘black swan’ event every single day.”
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Iran is refusing to allow inspectors access to nuclear-related sites and hindering a probe by the United Nations atomic agency while continuing to expand its nuclear activities, the International Atomic Energy Agency said in two confidential reports Tuesday, casting doubt on efforts to revive the 2015 nuclear deal.
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Tech-industry leaders are pushing the Pentagon to adopt commercially developed technologies on a grand scale to counter the rise of China, an initiative that could transform the military and the multibillion-dollar defense-contracting business.
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The U.S. economy is facing a slowdown in September, rather than the takeoff once hoped for.
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Intel is adding chip-manufacturing capacity in Europe. An Intel facility in Ireland. PHOTO: ARTUR WIDAK/NURPHOTO/ZUMA PRESS
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Intel Corp. plans to build new chip-making facilities in Europe valued at up to $95 billion, responding to a cross-border race to add manufacturing capacity at a time of a global chip-supply crunch.
Intel Chief Executive Officer Pat Gelsinger on Tuesday said the company was planning two chip factories at a new site in Europe and could potentially expand it further, with the increases raising the total investment over about a decade to the equivalent of as much as €80 billion. The facilities would cater to meteoric demand for semiconductors as computers, cars and gadgets become more chip-hungry.
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Mobile-app users in South Korea are set to have a choice of in-app payment systems once a new law targeting Apple and Google takes effect. PHOTO: KIM HONG-JI/REUTERS
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South Korea’s app developers can soon sidestep the digital tollway mandated by Apple Inc. and Alphabet Inc.’s Google, but changes for app companies and consumers may be hard to see initially.
Last week, South Korea passed the world’s first-ever law that blocks Apple and Google from only offering their own in-app payment system. The bill, pending presidential approval, could be enforced within weeks. Once enacted, South Korea’s app companies can avoid paying commissions of up to 30% to the tech giants if users opt to pay them via alternative payment platforms.
South Korea represents the first test over how similar regulatory efforts in motion around the world affect the market for apps.
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Activist hedge fund Elliott Management Corp. has a more than $1 billion stake in Citrix Systems Inc. and wants the software company to take action to boost its lagging stock price, according to people familiar with the matter.
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Raytheon Technologies Corp. is based in Waltham, Mass. A photo caption in yesterday's newsletter incorrectly said Raytheon was based in Woburn, Mass.
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