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The Morning Risk Report: State Street Subsidiary Violated Iranian Sanctions, Treasury Says
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State Street Bank & Trust processed pension payments for a U.S. citizen living in Tehran, Iran, shown above, in violation of U.S. sanctions regulations, according to the U.S. Treasury Department. PHOTO: ROUZBEH FOULADI/NURPHOTO/ZUMA PRESS
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Good morning. A subsidiary of State Street Corp. violated Iranian transactions and sanctions regulations, the Treasury Department said Tuesday, but the government stopped short of issuing a monetary penalty. The Treasury’s Office of Foreign Assets Control said custodian bank State Street Bank & Trust Co. violated U.S. Iranian sanctions regulations by processing payments on behalf of a person in Iran.
The bank disclosed the violations and subsequently improved its compliance program, OFAC said in explaining its decision to not impose a monetary penalty.
[Continued below...]
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“We take our [anti-money-laundering] and sanctions responsibilities seriously and we have cooperated fully with OFAC throughout the process,” State Street said in a statement. “In the four years since we reported this issue, we have made a number of enhancements to our global sanctions compliance program.”
The enforcement comes weeks after the regulator issued guidance on expectations for sanctions compliance programs. The guidance is part of a Treasury effort aimed at improving transparency around the department’s evaluation and resolution process.
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Think Tank Launches Group on Post-Brexit U.K. Sanctions Policy
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The Royal United Services Institute for Defence and Security Studies, a London think tank, has gathered a team to examine what the U.K.’s sanctions policy would look like after the country exits the European Union.
The 30-member group plans to discuss how the U.K. would draw its sanctions strategy independently to promote its foreign policy objectives, as the country seeks to establish itself as a global leader, Tom Keatinge, director of RUSI’s Centre for Financial Crime and Security Studies, told Risk & Compliance Journal on Tuesday.
The majority of the non-U.N. sanctions implemented by the U.K. have been regulations imposed by the EU, and the team will look into whether the U.K. might align its policy with that of the U.S. or the EU, or design sanctions that are better tailored to the U.K.’s foreign policy objectives, said Mr. Keatinge, who chairs the group, which includes former government officials, sanctions policy scholars and executives. The group plans to publish its findings and recommendations in early 2020.
–Mengqi Sun
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SEC Goes In-House for Top Role in Silicon Valley
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Erin Schneider, a senior enforcement official in the Securities and Exchange Commission’s San Francisco office, will take over the agency’s top job in that region. Ms. Schneider has overseen enforcement investigations of Tesla Inc. CEO Elon Musk and blood-testing company Theranos during her 14 years working for the SEC.
The SEC’s San Francisco office is the agency’s highest-profile regional office after its New York outpost and has become the de facto regulator of the private capital markets that fund many technology startups. Schneider replaces Jina Choi, who led the San Francisco office from 2013 to 2018.
—Dave Michaels
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Attorney Michael Avenatti walking out of a New York court house Tuesday after pleading not guilty to charges related to allegations that he stole $300,000 from adult-film actress Stormy Daniels, a former client. PHOTO: SPENCER PLATT/GETTY IMAGES
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Celebrity lawyer Michael Avenatti pleaded not guilty in federal court here to two separate indictments, telling a judge he was “100% not guilty” as prosecutors said they were ready to turn over evidence in both cases.
In March, federal prosecutors in New York charged Mr. Avenatti with extortion for what they said was his effort to threaten Nike Inc. into paying him $20 million.
Last week, in a separate indictment, federal prosecutors in New York alleged Mr. Avenatti embezzled nearly $300,000 from his former client and former adult-film actress Stormy Daniels, saying he forged her signature to direct payments from her book publisher into his own bank account. He has been charged with wire fraud and aggravated identity theft in that case.
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Mexican investigators have filed charges with federal prosecutors against the former head of state-run oil company Petróleos Mexicanos in connection with a corruption probe, officials said on Monday. The case stems from the first high-profile anticorruption investigation launched by the new administration of President Andrés Manuel López Obrador. Mr. López Obrador campaigned to end the rampant corruption that he has said plagued previous governments.
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Wynn Resorts Ltd. said it would not appeal a decision from Massachusetts regulators after a review of how the company handled sexual-misconduct allegations against its founder and former chief executive Steve Wynn.
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Connecticut Gov. Ned Lamont signed legislation Tuesday that will raise the state’s minimum wage to $15, joining six other states and Washington, D.C. The minimum wage will increase incrementally until it hits $15 in 2023. It then will be linked to the employment-cost index, a federal measurement of the changes in the cost of labor. Connecticut’s current minimum wage is $10.10.
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Avis Budget, which now calls itself a ‘provider of mobility solutions,’ is looking for a new CEO. PHOTO: PATRICK T. FALLON/BLOOMBERG NEWS
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Avis Budget Group Inc. has launched an effort to find a new leader after its chief executive said he would leave the rental-car company.
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CSX Corp. has started a search for its next finance chief after the railroad operator’s CFO left the role.
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Intelsat SA appointed a new finance chief as the satellite operator seeks to shore up its finances and evolve technologically amid waning demand across the sector.
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Cast members Skylar Gaertner, Julia Garner, Jason Bateman and Sofia Hublitz of ‘Ozark,’ one of a number of series Netflix films in Georgia. PHOTO: CHRIS DELMAS/AGENCE FRANCE-PRESSE/GETTY IMAGES
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Netflix Inc., which shoots major series in Georgia including “Stranger Things” and “Ozark,” said it would work to oppose a new state law restricting abortions but would continue to film in the state for now. Should the law take effect in 2020 as scheduled, “we’d rethink our entire investment in Georgia,” Ted Sarandos, the company’s chief content officer, said in a statement. Netflix is the first studio with current productions in Georgia to take a public position on the new law.
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China-based Huawei is the world’s biggest telecom-equipment company and holds more patents for 5G standards than any other company. PHOTO: QILAI SHEN/BLOOMBERG NEWS
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The addition of Switzerland-based Mediterranean Shipping and France’s CMA CGM to the effort called TradeLens means the three carriers that control nearly half of all seaborne containerized cargo will be part of a new blockchain party. PHOTO: TIM RUE/BLOOMBERG NEWS
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Two major European ship operators have joined a blockchain platform formed by A.P. Moller-Maersk A/S and International Business Machines Corp., in a significant boost for the adoption of the technology across the logistics industry. Meanwhile, Honeywell International Inc. is using blockchain to shake up the market for used aircraft components, making it easier to check the certification and origin of a part and speeding up transactions.
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Altice USA has bolstered its Wi-Fi network in advance of its new mobile-phone service and aims to push some mobile traffic onto those hot spots when consumers are away from home, reducing the amount of cellular data they use. PHOTO: MICHAEL NAGLE/BLOOMBERG NEWS
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Altice USA Inc., a cable-television company, is about to enter the crowded U.S. wireless market, pitching monthly unlimited data that costs half as much as rivals. This summer it will join rivals Comcast Corp. and Charter Communications Inc. in trying to persuade Americans to get their wireless service from their cable providers by promising lower prices.
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Walmart Inc. is hiring a former executive from Amazon.com Inc. and Alphabet Inc.’s Google to lead global technology, creating a new role as the world’s biggest retailer boosts efforts to take on Amazon.
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Global Payments Inc. and Total System Services Inc. agreed to combine in an all-stock transaction valued at roughly $21.5 billion, the latest in a string of deals involving large financial technology firms.
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