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The Morning Risk Report: Walmart to Pay $282 Million to Settle Claims of Corrupt Payments Abroad
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A Walmart store in Mexico City. PHOTO: EDGARD GARRIDO/REUTERS
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Good morning. Walmart Inc. agreed to pay $282 million to resolve yearslong criminal and regulatory investigations into whether it paid bribes around the world, agreeing that it had lax policies in place to catch potential corruption. The resolution comes after more than six years of settlement talks between Walmart and the U.S. government.
The deal requires Walmart to return $144 million in gains to the Securities and Exchange Commission and pay a $138 million penalty to the Justice Department. The SEC said the company’s actions violated the Foreign Corrupt Practices Act, which effectively forbids U.S.-listed companies from paying bribes to win business abroad.
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The SEC’s civil order alleged that Walmart targeted global growth during the 1990s without immediately ramping up its systems to account for corruption risks. Walmart has spent more than $900 million since 2012 on an internal investigation of the allegations and related compliance improvements, the company said.
Walmart’s Brazilian subsidiary pleaded guilty to one count of violating the foreign-corruption law. The Justice Department agreed not to prosecute Walmart as long as it pays its penalty, maintains its anticorruption compliance program and retains an outside compliance monitor for two years. “We’re pleased to resolve this matter,” Walmart Chief Executive Doug McMillon said in a written statement. “We’ve enhanced our policies, procedures and systems and invested tremendous resources globally into ethics and compliance.”
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From Risk & Compliance Journal
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Trivago signage was displayed at the Nasdaq Market Site in New York during its 2016 trading debut. PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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Two U.S. citizens sued hotel-search company Trivago NV, a subsidiary of Expedia Group Inc., under a newly revived provision of a U.S. law that permits legal action by U.S. citizens or entities against companies doing business on property that was confiscated by the Cuban government.
The lawsuit is the latest filed under the provisions of the Helms-Burton Act. Two other U.S. citizens filed lawsuits last month against Carnival Corp., alleging that the cruise operator was doing business on seized Cuban property to which they have claims.
Carnival, the world’s biggest cruise operator, cut its full-year earnings outlook, citing a hit from voyage cancellations, the abrupt Cuba travel ban and weakening demand in Europe.
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Russian President Vladimir Putin on the annual nationwide televised phone-in show in Moscow on Thursday. PHOTO: SPUTNIK/REUTERS
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Russian President Vladimir Putin blamed international sanctions and falling energy prices for declining incomes that have led to a drop in living standards for average Russians and caused mounting social discontent. The decline in quality of life has contributed to a battering in Mr. Putin’s domestic approval ratings and the negative sentiment threatens to overshadow his almost two decades in power.
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The Senate passed a series of resolutions aimed at blocking 22 arms sales to Saudi Arabia and the United Arab Emirates, dealing another symbolic blow to the Trump administration’s close ties to the Middle East allies.
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President Trump plans to issue an executive order Monday to compel the disclosure of prices in health care, according to people familiar with the matter. The order will direct federal agencies to initiate regulations and guidance that could require insurers, doctors, hospitals and others in the industry to provide information about the negotiated and often discounted cost of care, sources said.
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Facebook Inc.’s Libra project should be carefully vetted by regulators, Bank of England Gov. Mark Carney was expected to say, according to prepared remarks, offering insight into how the U.K. central bank will approach the new cryptocurrency.
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European Union leaders threatened sanctions against Turkey as a fight escalated over offshore energy reserves in the eastern Mediterranean. The unprecedented EU move Thursday came as Turkish President Recep Tayyip Erdogan already faced the imminent threat of U.S. sanctions over Ankara’s planned purchase of a Russian missile-defense system.
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WeWork Cos. is being sued by two former executives who are accusing the shared-office company of gender and age discrimination as it gears up for an initial public offering.
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A senior Chinese police official who once headed Interpol admitted to receiving more than $2 million worth of bribes, a trial court said, in a case that symbolized a pitfall in China’s growing global reach.
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Federal regulators want to block the combination of two, large U.S. magazine-and-catalog printers on concerns the deal could raise costs for publishers, retailers and consumers. The Justice Department filed a civil antitrust lawsuit Thursday that alleges Quad/Graphics Inc.’s proposed takeover of LSC Communications Inc. would hinder competition and allow the combined company to dominate the printing market.
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The court-appointed monitor for bankrupt QuadrigaCX said the Canadian cryptocurrency exchange’s late founder took most of the money entrusted to him by clients and spent much of it on himself and his wife.
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Sen. Marco Rubio says the Chinese government ‘has already shown its willingness to steal intellectual property and trade secrets from American companies.’ PHOTO: STEFANI REYNOLDS/GETTY IMAGES
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Pentagon funding helped San Francisco startup Twist Bioscience Corp. get off the ground. Then the maker of synthetic DNA got a partner in China, where it now plans to expand manufacturing and set up a subsidiary with the money from its recent initial public offering. In effect, the Defense Department’s nearly $5 million in funding for Twist served as a small boost to China’s rising biotech industry, which will benefit from the firm’s presence and the manufacturing jobs it creates.
That has prompted Sen. Marco Rubio (R., Fla.) to introduce an amendment to Congress’s annual defense policy bill to ensure grant recipients of the Pentagon’s Defense Advanced Research Projects Agency give preference to American manufacturers and to prohibit Darpa from partnering with entities subject to foreign company or government control.
Meanwhile, Apple Inc. is asking suppliers to study shifting final assembly of some products out of China, people familiar with the matter said, as trade tensions prompt the company to consider diversifying its supply chain. While any major changes would be difficult and could take months to years to implement, Apple is looking into the feasibility of shifting up to about a third of the production for some devices, some of the people said. Destinations under consideration include Southeast Asia, the people said.
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UBS is still dealing with the fallout about a comment made by one of its economists. PHOTO: FABRICE COFFRINI/AGENCE FRANCE-PRESSE/GETTY IMAGES
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A week after a UBS Group AG economist’s offhand comment about pigs in China morphed into an online scandal, the bank is still feeling the pain in one of its most important markets. At least one Chinese client dropped UBS from a bond deal, traders at some asset managers stopped dealing with the bank and some corporate executives have put off meetings with UBS’s investor clients, according to people familiar with the matter.
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Boeing Co. arrived at the world’s largest aerospace extravaganza battling the biggest crisis in its history. It departs having secured a crucial vote of confidence in its beleaguered 737 MAX jetliner and the prospect of further orders on the horizon. Boeing executives spent the week seeking to restore the company’s battered reputation, shunning the customary fanfare of trumpeting billions of dollars of orders. Its focus, executives said daily, was on safely returning the MAX to service.
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A customer uses voice-activated equipment to place an order at a McDonald’s restaurant outside Chicago. PHOTO: MCDONALD’S
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McDonald’s Corp. is designing voice-activated drive-throughs and robotic deep-fryers as the burger giant works to streamline its menu and operations to speed up service.
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Kroger Co. executives are seeking patience from investors as they continue to oversee efforts to transform the business while facing heightened competition from a range of food retailers and shifting shopping patterns.
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Renault SA and its alliance partner Nissan Motor Co. have signed a deal with Alphabet Inc.’s self-driving technology unit Waymo to explore driverless car options in France and Japan.
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Slack Technologies Inc.’s highflying trading debut Thursday reflects the rapid growth of cloud-enabled workplace collaboration tools, which are driving a shift from individual to group productivity, according to chief information officers, tech-firm executives and analysts.
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