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The Morning Risk Report: Adidas Executive Sentenced in NCAA Bribery Case |
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Former Adidas executive Jim Gatto arriving at court in New York on Tuesday for sentencing. PHOTO: SETH WENIG/ASSOCIATED PRESS
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Hello. An Adidas AG executive was sentenced to nine months in federal prison for his role in a scheme to bribe families of top-ranked high-school basketball players to induce them to attend Adidas-sponsored universities, following a trial that detailed the corrupting role of money in college athletics.
Jim Gatto, who served as Adidas’s director of global sports marketing for basketball, was convicted in federal court in October on three counts: wire fraud and wire-fraud conspiracy in connection with the University of Louisville, and wire fraud in connection with the University of Kansas.
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The case grew out of a wide-ranging investigation into corruption in college sports. In September 2017, prosecutors unsealed charges related to three alleged schemes stemming from the yearslong probe, laying out allegations of backroom deals involving sports management, apparel companies and coaches that deeply rattled Division I basketball.
Former Adidas consultant Merl Code and aspiring sports agent Christian Dawkins were also convicted at the October trial on two counts related to Louisville. Mr. Code and Mr. Dawkins were each sentenced to six months in prison. Adidas wasn’t accused of wrongdoing in the matter.
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C-Suite Often Isn’t on the Hook for Inclusivity |
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Corporate culture is becoming an important point for investors and consumers. Most C-suite executives, though, aren’t held accountable for creating an inclusive workplace.
That is according to the recruiting and advisory firm Russell Reynolds & Associates. The firm recently surveyed 1,800 executives across industries on the topic of diversity. Only 40% of respondents—mostly senior vice presidents, vice presidents and other managers—said leaders at their companies were held accountable for creating an inclusive culture.
An even smaller portion, 35%, said their companies consider inclusive traits such as open-mindedness and self-reflection when considering promotions.
Anthony Abbatiello, head of the leadership and succession division at Russell Reynolds, said companies should consider coaching senior leaders on inclusion and tracking their progress. And on a more basic level, he said, companies should ask a simple question about their senior leaders: “Are they putting us at risk?”
—Kristin Broughton
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The Future of Corporate Compliance |
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Companies face a widening range of risks from third-party relationships at a time when many depend on complex networks of hundreds of sales agents, suppliers and business partners. Join The Wall Street Journal and Dow Jones on March 12 at 8 a.m. in New York for a discussion about third-party risk, including an interview with Stephanie Davis, chief ethics and compliance officer for Volkswagen Group of America. Just added to the program: an interview with Daniel Kahn, chief of the FCPA unit at the U.S. Justice Department. Register here.
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| From Risk & Compliance Journal |
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A Petróleo Brasileiro, or Petrobras, gas station in Rio de Janeiro. Petrobras settled corruption investigations with U.S. and Brazil authorities last year. PHOTO: DADO GALDIERI/BLOOMBERG NEWS
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Government authorities outside the U.S. are increasingly clamping down on foreign bribery, a new report indicates. There were 196 ongoing bribery investigations by non-U.S. government authorities at the end of 2018, up 29% from 2017, according to an annual enforcement report released Tuesday by anticorruption compliance group Trace International Inc. Also, the number of countries conducting investigations rose 21% to 35.
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Huawei said its new cybersecurity center in Brussels aims to improve communication with EU regulators. PHOTO: EMMANUEL DUNAND/AGENCE FRANCE-PRESSE/GETTY IMAGES
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China’s Huawei Technologies Co. on Tuesday opened a cybersecurity center in the European Union’s capital, seeking to restore credibility after the U.S. and other Western governments arrested executives from the telecommunications giant and accused it of espionage.
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Chinese hackers have targeted more than two dozen universities in the U.S. and around the globe as part of an elaborate scheme to steal research about maritime technology being developed for military use, cybersecurity experts and current and former U.S. officials said.
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China has banned canola imports from the largest Canadian-owned grain processor, Richardson International Ltd., at a time of escalating diplomatic tensions fueled by the arrest of Huawei’s chief financial officer.
- The French government on Wednesday introduced a new levy aimed at big tech giants, adding to momentum behind more than a dozen similar measures globally that could collectively cost Silicon Valley companies billions of dollars.
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Matt Zames made a name as a Wall Street fix-it man. He helped steer JPMorgan Chase & Co. through the “London Whale” trading debacle and was considered a possible successor to its chief, James Dimon. He now has another colossal mess to help clean up—saving Deutsche Bank AG.
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John Schnatter, right, had resigned as Papa John’s International CEO in December 2017 and then as chairman last year. PHOTO: DANNY MOLOSHOK/REUTERS
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Papa John is stepping away from Papa John’s International Inc. John Schnatter, the controversial founder of the world’s third-largest pizza delivery chain, agreed to leave the company’s board in exchange for having a say in naming his replacement.
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Carlos Ghosn, the former Nissan Motor Co. chairman, was freed Wednesday after what he called a “terrible ordeal” of 108 days behind bars.
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The chairman of Anheuser-Busch InBev SA is resigning to focus on his role at consumer-goods giant JAB Holding Co., opening up a vacancy at the top of the world’s biggest brewer as it grapples with a heavy debt load and falling beer volumes, particularly in the U.S.
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An activist investor plans to push Victoria’s Secret parent L Brands Inc. to break up. New York hedge fund Barington Capital Group LP has built a small stake in L Brands and is urging the company to consider splitting its booming Bath & Body Works operation from the struggling lingerie chain.
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Barrick Gold Corp.’s largest shareholder said it prefers a joint venture with Newmont Mining Corp. over a full-blown acquisition, throwing another hurdle in front of the Toronto-based miner’s ambitions to buy its closest rival.
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The office-space company WeWork Cos.’ new directions make for an eclectic mix of businesses. Some appear to be built around CEO Adam Neumann’s hobbies and personal interests.
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Harley-Davidson motorcycle sales declined in 2018 from a year earlier. PHOTO: NATI HARNIK/ASSOCIATED PRESS
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Harley-Davidson Inc. acquired StaCyc Inc., which makes electric-powered two-wheeled bikes designed for children. The acquisition expands Harley-Davidson’s electric portfolio, as the company has been facing pressure to find new riders outside of its core customer base. Harley-Davidson previously announced plans to launch LiveWire, an electric motorcycle, this fall and lightweight and middleweight electric motorcycles starting in 2021.
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Insurance brokerage Aon PLC is in early talks to acquire Willis Towers Watson in an all-stock deal, Aon said Tuesday.
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Chevron Corp. and Exxon Mobil Corp. plan to significantly ramp up production in the oil field at the heart of the American fracking boom, the latest sign that the next era of shale drilling is likely to be led by the major oil companies.
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Amazon is experimenting with different types of brick-and-mortar outlets, from book shops to pop-up stores. PHOTO: BRENDAN MCDERMID/REUTERS
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Shopping center owners have long blasted Amazon.com Inc. as a destroyer of their business. Now some are starting to view Amazon as a potential savior. At a time when Sears Holdings Corp. and Macy’s Inc. are shutting down stores, and many malls are struggling to attract high-profile tenants to fill empty spaces, the giant online retailer has been ramping up its presence in physical retail.
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Finance departments are betting that new technology will close efficiency gaps created by budget and staff cuts spurred by the next economic slowdown.
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With nearly a million shipping containers under its control, San Francisco-based CAI International Inc. is on the front lines of the global trading economy. Its marine boxes hold the consumer goods and industrial parts that move across oceans on massive container ships, and its tankers, hopper cars and other rail equipment carry the basic raw materials of the North American industrial economy.
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The relatively low operating cash flow might have been a tipoff to investors that Kraft Heinz was faltering. PHOTO: RICHARD B. LEVINE/ZUMA PRESS
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The problems Kraft Heinz Co. disclosed last month are shining a light on another concern: the company’s tailored financial metrics that help make its results look better.
Since the 2015 merger that created Kraft Heinz, the packaged-food company has reported adjusted operating earnings totaling more than $24 billion. But reported cash flow from operations under standard accounting rules for that same period was only about $6 billion.
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