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The Morning Risk Report: Mueller Report Sheds Light on Russia’s Concerns Over U.S. Sanctions
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Alfa-Bank Chairman Petr Aven. PHOTO: ANDREY RUDAKOV/BLOOMBERG NEWS
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Good morning. Russian President Vladimir Putin urged a Russian banking executive with ties to one of the country’s largest commercial banks to establish a line of communication with the incoming Trump administration following the 2016 U.S. presidential election, according to special counsel Robert Mueller’s report on Russian interference in the election. Mr. Putin’s chief concern, according to the report: U.S. sanctions.
Details of purported one-on-one conversations between Mr. Putin and Petr Aven, who has held a variety of executive and board positions with Alfa-Bank and related entities, appeared in the highly anticipated report. The report also described an “all-hands” meeting between Mr. Putin and Russia’s top businessmen during which the Russian president focused on the prospect of more U.S. sanctions.
[Continued below…]
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The encounters, described to the special counsel’s office by Mr. Aven and detailed in the report, shed light on Russian anxieties about crumbling relations with the U.S., although the Kremlin has said publicly that its increasing isolation and Western sanctions aren’t a worry. They also suggest that the interests of the Kremlin and Russian oligarchs such as Mr. Aven are closely intertwined.
Mr. Putin’s close relations to various oligarch groups, whom he meets with regularly, are well known. But details from the Mueller report could provide U.S. lawmakers with ammunition to levy more sanctions, Michael Dobson, a former sanctions policy adviser at the Treasury Department’s Office of Foreign Assets Control, tells Risk & Compliance Journal’s Mengqi Sun.
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From Risk & Compliance Journal
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FinCEN Issues Penalty for Peer-to-Peer Digital Currency Exchange
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The Treasury Department’s financial crimes unit fined a California man it accused of violating anti-money-laundering laws, saying he exchanged bitcoins hundreds of times on behalf of customers without a license. It is the Financial Crimes Enforcement Network’s first enforcement action against a peer-to-peer virtual currency exchanger, FinCEN said. It comes six years after FinCEN first issued guidance requiring individuals who buy and sell bitcoins or other virtual currency on behalf of others to register as money-services businesses, Risk & Compliance Journal’s Kristin Broughton reports.
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Former Airline Employee Pleads Guilty to Acting as Chinese Agent
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A former Air China Ltd. employee pleaded guilty to acting as an agent of the Chinese government by using her position to help military and other officials smuggle packages out of the U.S. Ying Lin’s case is part of a series of federal probes around China’s permanent mission to the United Nations that led to the conviction of Macau real-estate and casino mogul Ng Lap Seng on bribery charges and Dan Zhong, a former Chinese diplomat, on forced-labor and related charges.
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U.S. sanctions haven’t led Iran to pull back its military role in Syria in support of President Bashar al-Assad or scale back its paramilitary role in the region. PHOTO: RAHEB HOMAVANDI/REUTERS
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The State Department is expected to announce the end of waivers for countries to import Iranian oil, part of the Trump administration’s effort to drive Iran’s exports to zero, people familiar with the decision said. The U.S. had previously granted eight countries a 180-day waiver to continue to buy Iranian crude despite U.S. sanctions, provided that each took steps to reduce purchases and move toward ending imports. The deadline for renewing the waivers was set to fall on May 2.
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Carlos Ghosn was indicted Monday on charges that he misappropriated funds sent by Nissan Motor Co. to a distributor in the Middle East, clearing the way for him to seek release on bail. Tokyo prosecutors arrested the former Nissan and Renault SA chairman April 4—his fourth arrest since Nov. 19. In the latest set of charges, prosecutors allege that between 2017 and 2018 Mr. Ghosn arranged for a company he controlled to receive a portion of money sent by Nissan to its overseas distributor. Of a total $10 million sent by Nissan during this period, prosecutors allege Mr. Ghosn received $5 million.
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Alan García, the two-time former Peruvian president who killed himself to avoid arrest, led a criminal group that received millions of dollars in bribes from Brazilian engineering conglomerate Odebrecht SA, according to a top official in the attorney general’s office and an arrest order for Mr. García and his associates. Using offshore companies, his inner-circle received payments ranging from $10,000 to $860,000 and expensive TV sets in exchange for lucrative public-works contracts, prosecutors allege in the arrest order.
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Over the past decade about 1,200 people with criminal records have asked the government to let them work at a bank—with more than 40% of requests rejected or unresolved. Banks say restrictions against people convicted of a crime of dishonesty or breach of trust is too tight, keeping them from hiring a more diverse pool of candidates.
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A unit of online lender Prosper Marketplace Inc. agreed to pay $3 million to settle claims that it miscalculated returns of investors who funded its consumer loans. The settlement comes three years after the Securities and Exchange Commission’s former chairman, Mary Jo White, said regulators were closely monitoring the accuracy of information that online lenders provide to investors.
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Several states are rolling out stricter standards for investment-broker conduct, bucking industry warnings about an unwieldy patchwork of rules around the country. The state-level rule-making, primarily in states led by Democrats, comes as the SEC moves to finish its own national conduct requirements for brokers paid by commission for investment advice.
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Computer Attack Knocks Weather Channel Off the Air
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Federal authorities are investigating a computer attack knocked the Weather Channel off the air for more than an hour last week. After its broadcast was disrupted, the weather news service sent a tweet saying it had been the victim of “a malicious software attack,” adding that federal law-enforcement officials were investigating the matter. A spokesman for the Federal Bureau of Investigation said the incident was a ransomware attack, and the agency was conducting an investigation.
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The proposals outlined Friday would continue the gradual changes made by Tesla to bring more oversight to a board that has faced scrutiny from investors and advocates who say it lacks independence. PHOTO: WU HONG/EPA/SHUTTERSTOCK
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Tesla Inc. said it would shrink the size of its board to seven from 11 directors as part of a series of moves designed to improve corporate governance, with three of Chief Executive Elon Musk’s longtime allies aiming to step down. The shake-up, revealed in a proxy filing, would continue the gradual changes made by Tesla to bring more oversight to a board that has faced scrutiny from investors and advocates who say it lacks independence. The phaseout of four directors follows a settlement with the Securities and Exchange Commission last year that required that Mr. Musk step down as chairman for three years and that the company add two independent directors.
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The two top executives of Japanese bath and kitchen company Lixil Group Corp. said they planned to step down from the board after shareholder pressure, the latest sign of rising clout enjoyed by shareholders in Japan.
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Walmart is using virtual-reality training to prepare workers to better interact with customers. Here, employee Andrew Weyand tries out the VR goggles during a training session at a Walmart store in Natrona Heights, Pa., on a recent day. PHOTO: ROSS MANTLE FOR THE WALL STREET JOURNAL
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While executives bemoan the cost of hiring in a tight labor market to meet fast-changing business needs, there is a ready pool of talent they wouldn’t need to spend a dime recruiting: their own workers. But instead of teaching new skills to their current workers, employers often choose the disruption and high costs of layoffs or buyouts. Why? Sometimes the required skills aren’t easily taught to existing employees, experts say. It’s also often because companies have only a hazy sense of what their internal talent is capable of, and migrating large numbers of employees into new positions requires time, money and commitment.
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Samsung Electronics Co. abruptly canceled two prelaunch events for its new Galaxy Fold smartphone in Hong Kong and mainland China, following a product headache that began with tech reviewers reporting their test devices had malfunctioned.
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A rift between the U.S. and Canada is growing over how to ensure the safety of Boeing Co.’s grounded 737 MAX planes, as Ottawa’s focus on additional pilot training could lead to more delays in getting the jet back in the air.
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A SpaceX capsule presumed damaged during weekend engine tests on the ground in Florida created an extensive plume of smoke visible for miles, prompting some industry officials to say the problem could delay the company’s first crewed space flight by months.
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Stanley Brown, a security guard at the former Sanyo television plant in Forrest City, Ark., walks through the plant. PHOTO: ANDREA MORALES/WSJ
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The accord now being drawn up to resolve the trade fight between the world’s two largest economies promises better treatment of U.S. companies in China and more Chinese orders for U.S. crops and other products.
But rattled businesses on both sides of the Pacific are skittish about rushing back in to revive the once-booming investment activity between the two countries.
“There is no way any deal between China and the U.S. will cause everyone on both sides to say, ‘We were just kidding,’” said Dan Harris, managing partner at Harris Bricken, a law firm that specializes in investment with China. “The tariffs and the arrests and the threats and the heightened risk have impacted companies and that will not go away.”
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Kroger CEO Rodney McMullen says he believes the company has devised a plan to help it grow again. PHOTO: SANGSUK SYLVIA KANG/THE WALL STREET JOURNAL
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Kroger Co. is adjusting operations and investing in technology to try to hang on to customers who no longer like to buy their food in stores. ‘We’ve got to get our butts in gear,’ says Chief Executive Rodney McMullen.
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Venmo’s latest gambit to profit off its massive but still-not-lucrative user base involves a decidedly old-school idea: credit cards. Executives at the digital payments company have been meeting with banks since late last year to discuss issuing a Venmo-branded credit card, people familiar with the matter said.
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As Tesla Inc. faces questions about whether demand for the Model 3 compact car is slowing, Chief Executive Elon Musk wants investors to focus on the auto maker’s road much farther ahead: vehicles driving themselves in a robot-taxi fleet.
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ConocoPhillips is exiting the oil exploration and production market in the U.K. The company said it reached a deal to sell two subsidiaries that focus on production in the U.K.’s North Sea for about $2.68 billion in cash to Chrysaor E&P Ltd.
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