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The Morning Risk Report: Antitrust Policy Revamps All-or-Nothing Approach to Corporate Leniency
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The U.S. Justice Department said it would begin offering deferred prosecution agreements to companies that fail to secure the coveted first spot in line for reporting antitrust violations but have a strong compliance programs in place. PHOTO: JONATHAN ERNST/REUTERS
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Good morning. Companies looking to catch a break from federal prosecutors for violating antitrust laws have long been forced to run a winner-takes-all race: Those that were first in line to report wrongdoing were let off the hook while co-conspirators faced criminal charges.
That approach changed last week under a new compliance policy unveiled by the U.S. Justice Department. Among the most significant revisions: Prosecutors will begin offering deferred prosecution agreements to companies that fail to secure the coveted first spot in line but have a strong antitrust compliance program in place.
[Continued below…]
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The new policy offers a consolation prize of sorts to violators in the form of potentially lighter penalties, according to lawyers and former Justice Department officials. But in tweaking its approach, the department has raised questions about whether it has weakened incentives for companies to rush to report violations, Risk & Compliance Journal’s Kristin Broughton and Dylan Tokar report.
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From Risk & Compliance Journal
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U.K. Lays Out Plans to Fight Economic Crime
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The U.K. laid out a new three-year plan for tackling economic crime. The plan released by the U.K. government sets out seven priority areas, including assessing threats of fraud, money-laundering and other such economic crime facing the country and improving the transparency of ownership, Risk & Compliance Journal’s Mengqi Sun reports.
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The Federal Trade Commission approved a $5 billion settlement with Facebook; the matter has moved to the Justice Department for review. PHOTO: THIBAULT CAMUS/ASSOCIATED PRESS
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The Federal Trade Commission has endorsed a roughly $5 billion settlement with Facebook Inc. over a long-running probe into the tech giant’s privacy missteps, according to people familiar with the matter. The matter has been moved to the Justice Department’s civil division and it is unclear how long it will take to finalize, one of the people said. A settlement is expected to tighten government restrictions on how Facebook treats user privacy.
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President Trump at a White House social-media summit Thursday, before lobbing a few tweets at cryptocurrencies, including Facebook’s coming Libra. PHOTO: RON SACHS/ZUMA PRESS
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Facebook Inc.’s Libra cryptocurrency gained a pair of powerful skeptics ahead of a congressional hearing on the social-media giant’s ambitious plan to create a world-wide payments network. President Donald Trump said Libra “will have little standing or dependability,” in a series of tweets slamming bitcoin and other cryptocurrencies. Earlier in the day, Federal Reserve Chairman Jerome Powell told the Senate Banking Committee that Libra “raises a lot of serious concerns, and those would include around privacy, money laundering, consumer protection, financial
stability.”
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A federal judge declined to throw a roadblock in front of a massive Pentagon cloud-computing contract, granting a legal victory to Amazon.com Inc. in its bid to secure the deal and a loss to competitor Oracle Corp. In a three-paragraph order, Senior Judge Eric Bruggink of the U.S. Court of Federal Claims rejected Oracle’s allegations that potential conflicts of interest weren’t properly investigated. He backed the government’s findings that the procurement process was in accordance with the law.
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Daimler AG cut its earnings outlook for the second time in a month, as the legal fallout from the continuing diesel-emissions scandal continues to hamper the luxury auto firm.
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Turkey began receiving a sophisticated new air-defense missile system from Russia that Washington regards as a security threat, potentially exposing Ankara to U.S. sanctions and testing its position in NATO.
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Huawei Technologies Co. is planning extensive layoffs at its U.S. operations, according to people familiar with the matter, as the Chinese technology giant continues to struggle with its American blacklisting.
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Court Questions Trump Effort to Block Subpoena for Records
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A federal appeals court voiced doubts about President Trump’s bid to block a House subpoena seeking financial records from his long-time accounting firm, but judges also questioned whether House Democrats were pushing legal boundaries. At issue during a lively two-hour argument was a subpoena that House Oversight Committee Chairman Elijah Cummings (D., Md.) issued in April to Mazars USA LLP for eight years of financial statements and other records related to Mr. Trump, his real-estate company, his foundation and other entities belonging to the president.
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Rather than take members of its Chairman’s Club to Hawaii next spring, Charles Schwab will pay $5,000 after taxes and give them a paid week off. PHOTO: CHRISTOPHER DILTS/BLOOMBERG NEWS
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Charles Schwab Corp. is scaling back a sales-incentive program designed to reward top employees with all-expenses-paid trips. In an email to its staff Friday, the discount brokerage and investment firm said that rather than take members of its Chairman’s Club to Hawaii next spring, Schwab will pay $5,000 after taxes and give them a paid week off. In the email, the firm said there are “significant reputational risks” associated with award programs.
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Employees look into facial-recognition devices to enter the assembly-line area at a Pegatron factory in Shanghai, part of Apple’s supply chain. PHOTO: QILAI SHEN/BLOOMBERG NEWS
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American trade policies aimed in part at returning factory work to the U.S. appear instead to be accelerating a shift in production from China to Vietnam and other low-cost nations.
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Boeing Co.’s 737 MAX planes are unlikely to be ready to carry passengers again until 2020 because of the time it will take to fix flight-control software and complete other steps, an increasing number of government and industry officials say, even as the company strives to get its jet back into service this year.
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Mexico is slipping toward a recession as the U.S. economy continues to grow, the first time in 25 years that the neighbors’ economic cycles have fallen sharply out of sync. Mexican industrial production posted its sharpest decline in a decade in May.
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Business groups expect the new acting leader of the Labor Department to move more quickly on deregulatory efforts than Labor Secretary Alexander Acosta, who resigned Friday.
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A test vehicle from Argo AI, Ford’s autonomous vehicle partner, in which VW plans to invest $2.6 billion, valuing the Pittsburgh startup at $7 billion. PHOTO: KEITH SRAKOCIC/ASSOCIATED PRESS
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Ford Motor Co.’s expanded alliance with Volkswagen AG will give the U.S. auto maker an important corporate ally in Europe, where tougher emissions rules are raising costs significantly for the auto industry. The two global car-manufacturing giants agreed Friday to jointly develop an electric car for the European market, using VW’s existing technology for battery-powered vehicles. Ford said it would build about 100,000 vehicles a year with VW’s electric-car tool kit, starting in 2023.
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Anheuser-Busch InBev SA called off the nearly $10 billion listing of its Asian business, citing market conditions, scrapping what would have been the largest initial public offering of the year and dealing a setback to the brewer’s efforts to pay down debt.
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Oil giant Royal Dutch Shell PLC aims to become the world’s largest electricity company without necessarily generating very much power. The Anglo-Dutch company last month detailed its plans to transform into a cleaner business centered on selling electricity. Hoping to capture the most profitable part of the business, Shell’s power strategy will be light on assets and focus on trading electricity generated by others.
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